The pandemic has nipped many a wish for more money in the bud. Instead, “old” virtues in the employment relationship are experiencing a revival.
In 2020, engineers were once again among the top jobs, alongside doctors, lawyers and bankers. Especially in Germany, they continue to be well regarded, standing for innovation and “Made in Germany” quality. Of course, this is reflected in salaries. According to the Salary Report 2021 of the StepStone job market, engineers earn €62,564 on average.
Among them, the salaries of workers in South Germany are higher than average. Companies in Hessen pay best, with salaries averaging €60,936, followed by Baden-Württemberg (€60,182) and Bavaria (€60,013). This distribution also conforms with the top three large cities: Frankfurt am Main (€66,529) in first place ahead of Stuttgart (€66,174) and Munich (€65,164).
With almost all areas of life and work being digitalized and made “smart,” there is a particular increase in demand for electrical and IT engineers. The Association of German Engineers (VDI) reports that, although demand suffered a significant setback due to the coronavirus crisis, it will regain lost ground in the future. More than 62,000 STEM academics leave the job market every year due to age, and dropout rates of 40 percent in this area reduce the supply further.
According to this year’s salary report by the personnel and management consultancy firm Interconsult, increases in income were lower in all sectors than in previous years. The areas that recorded the largest increases in wages last year were those of network technology with over three percent, followed by IT / MIS (management information system), EDA (electronic design automation) and medical electronics. Reduced bonuses and short-time work play a role here. Some companies also reduced working hours in general in order to keep jobs. The impact of the coronavirus pandemic is felt everywhere, but it does not affect everyone equally. For example, several companies were able to benefit somewhat from the boost to digitalization, while others such as the automotive supplier industry were hit particularly badly.
In many companies, salary discussions will therefore be postponed across all industries this year, as a reliable sales development is almost impossible at this point in time. Economic forecasts see a catastrophic first quarter of 2021, while the second quarter could see a slight improvement heading into summer. The signs then indicate a recovery in Q3, and the fourth quarter should even turn out very well.
Now it’s time to master the crisis together and avoid changes that could turn out to be painful in hindsight. For that reason people will probably come out of annual appraisals – if they take place – without any major salary increases. Excessive demands in this precarious situation are also likely to have a negative impact in the future. At this point in time it is better to signal loyalty and postpone salary demands until better times. And they will come, with the typical catch-up effects in terms of salary and recruiting. That will be the right time for talks.
Interconsult Salary Comparison 2021 for Germany’s High-Tech Industry
Stepstone: Salary Report 2021
VDI/IW Engineer Monitor Third Quarter 2020
VDI: Engineer Income 2002-2019