What is the dollar value of "qualifying experience" in an entry-level US engineering job?

Question

Motivation

Imagine that you are a recent graduate of an ABET-accredited engineering program in the United States. You have taken and passed the Fundamentals of Engineering exam and you are hunting for your first job as an engineer. You send out applications, sit for interviews and have the good fortune to receive two offers of employment. Both positions are interesting and offer reasonable compensation, benefits and responsibilities at established companies; however, only one of the two positions represents qualifying experience for the purpose of becoming a licensed Professional Engineer (PE).

Problem:

What is the dollar value of that qualifying experience?

In other words, how can the applicant calculate the value of progress toward PE licensure as part of the "total compensation" the job offers, as is commonly done for benefits such as employer-subsidized health insurance, relocation assistance or gym memberships, so as to make a more informed decision about which offer to accept?

Discussion

For a position to represent "qualifying engineering experience," The National Society of Professional Engineers specifies that it must involve:

1. A major branch of engineering
2. Supervision by one or more qualified engineers
3. The development of "technical skill and initiative in the application of engineering principles and sound judgment in reviewing such applications by others"
4. A reasonably well-rounded experience in that branch of engineering
5. Work of increasing complexity and responsibility

I myself interviewed for two positions at the same organization, with the same title, shortly after finishing my undergraduate degree. One of the positions was supervised directly by a PE and the other was not, nor did it involve work that would be reviewed at some point by a PE—it was made very clear during the interviews whether or not each job represented qualifying experience toward a PE.

In other cases, a recent graduate may entertain offers from both traditional engineering firms and companies that operate in related, but not strictly engineering, fields. For example, Accenture recruits engineering graduates at my alma mater for non-engineering positions. Some engineering graduates have a background that qualifies them for software development positions. Others may have the option of pursuing positions in R&D or pure research.

The best answers will thoroughly justify their analysis and cite references for any statistics used. I wouldn't discount a novel "back of the napkin" approach, though.

Answer 1

From what I was able to find (see reference 1 and reference 2), it appears that a licensed PE is paid on average approximately $5,000 per year more than a non-licensed engineer. Note that the amount holds up even with different organizations performing the salary survey.

From reference 2:

Based on 2010 survey findings from the National Society of Professional Engineers (NSPE), licensed engineers make an annual median salary of \$99,000, while those with no license or professional certification earn \$94,000 a year. More recently, according to a 2012 report from the American Society of Civil Engineers and the American Society of Mechanical Engineers, engineers with a PE license earn a median income of \$100,000, compared with the \$95,500 for unlicensed engineering professionals.

Plugging those numbers into a present value spreadsheet, I came up with a present value of approximately \$33k in favor of taking the role leading towards a PE. _{See assumptions below}

Also note that your question pertains to a recent college graduate. The present value would be less for someone who earns their PE license later on in their career.

Money obviously isn't the only reason to become a Professional Engineer (see other reasons 1 and other reasons 2). But the economics of earning your PE are certainly attractive.

Those additional references cite career development and enhanced job security in the sense of it being easier to find another job should you become unemployed. It's pretty difficult to assign a readily agreed upon value to those intangibles, but most would agree that they have some amount of value to them. Even if you're having a hard time seeing how a PE license would lead to a greater salary, one of the references points out that having a PE may lead towards a role with greater responsibility. More job responsibility often correlates with an increase in salary.

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<sub>My assumptions:
* Work for 40 years (eg. N = 40)
* No additional income for first 4 years (recognizing typical 4 years of work experience requirements)
* Assumed an average of \$5000 additional per year of employment and that the salary differential remains consistent across all of the years of employment
* Discount rate of 10% (conservative given historical market rate of 6 or 7%)
* A 7% discount rate would yield ~\$49.5k and a 5% rate would yield \$68k</sub>

Answer 2

Trying to put a dollar value on something like that is missing the point.

The first question you should be asking yourself is whether you want to, and you think it's appropriate for your career objectives, to become a PE. If you're a civil or structural engineer, then that is pretty much mandatory. In other engineering fields it may be irrelevant. For example, I've been a electrical engineer for 35 years and don't have a PE license. It just not something the that matters for the kind of things I do and who I do them for.

So forget about monetary value. Do you want to be a PE or not? If so, then you can consider activities that get you there as part of your education. Did you get your engineering degree in the first place because you did the monetary analysis and decided you'd make more money that way as apposed to being, say, an auto mechanic? No, of course not. Or at least I hope not. If you did, bail out now, you'll never be more than a mediocre engineer.

Becoming a PE is part of your overall engineering education. If you decide that's the direction you want to go in, because you have an aptitude, interest, and passion in the field, then take the job that fulfills that goal. If you don't intend to become a PE, then take either job based on other criteria, like which one you have the best chance of learning from or being mentored by someone that you get along with and likes doing such things. Money should NOT be much of a consideration this early in your career.