SoloPoint Insights

The demand for highly skilled electrical engineers is on the rise as investments surge into the thriving semiconductor and energy industries. However, there’s a critical shortage of these engineers in the job market, which threatens to disrupt production and escalate expenses. What’s the cause of this talent shortage and how do we address it effectively?

Cause of Shortage: Currently, there are about 295,000 electrical and electronics engineers in the U.S. but in the next few years, there will be 1,100 fewer talents in the workforce. This is due to the high number of retiring and transitioning workers, which will lead to 17,800 job openings, but only around 16,700 incoming workers are expected to join the labor market. Here’s what’s causing this shortage:

1. Boomers are Leaving:

With older workers retiring at a faster rate, competition for electrical engineers has intensified. Studies reveal that there might not be enough new engineering talents to replace the retiring baby boomers, who hold critical legacy knowledge and have been responsible for many advancements. This presents a challenge in terms of knowledge transfer, replacements, and filling workforce gaps.

2. Fewer Young Engineers:

A survey shows that 76% of employers struggled to find engineers because there weren’t enough students studying electrical engineering. The number of engineering graduates in the U.S. has become stagnant and this shortage is blamed on the lack of undergraduate education, inadequate funding, and declining interest.

With only about 20,000 to 30,000 new electrical engineers graduating each year, the supply of workforce is falling short due to many college students choosing other careers like Wall Street, consulting, or higher pay and prestige companies like Google and Amazon.

Declining Student Interest

In the past 50 years, more students have been choosing computer science (CS) over electrical engineering (EE) as their major, with a 90% increase in CS majors and a 90% drop in EE majors. Here are the reasons behind the decline in student interest:

• Less requirement: Software engineers only often need to complete certifications to specialize in their field, while many electrical engineers typically require a graduate degree in order to obtain specialized or higher roles.
• More opportunities: The demand for software engineers is anticipated to grow faster than usual, with a 22% expected growth rate compared to 5% to 7% for electrical engineers from 2019 to 2029. 
• Higher salary: Software jobs typically offer higher starting salaries than hardware jobs, with computer scientists making a median salary of $136,620 compared to electrical engineers’ median salary of $103,320, according to BLS data.

Why are skilled electrical engineers hard to find? In addition to the reasons for the shortage of talent, there are also factors that make it difficult to find skilled electrical engineers. Here’s what’s causing the high demand:

1. Industry Demand
   • The global semiconductor industry is projected to grow over one trillion dollars by 2030, driven by increasing demands in renewable energy, electric vehicles, semiconductors, and electronics, all of which require more electrical engineers skilled in designing complex systems and components.
   • The U.S. semiconductor industry alone will need around 250,000 new workers, including 50,000 engineers, and 200,000 technicians, to manage equipment maintenance and fab operations.
   • Examples:
     • Samsung is investing a massive $230 billion in expanding semiconductor manufacturing, while Deloitte predicts a need for over one million additional skilled workers by 2030.
2. Government’s Push 
   • A recent federal law, the CHIPS Act of 2022, will spend $280 billion to boost domestic production of microchips, which could boost demand for electrical engineers and require tens of thousands of electrical engineering graduates over the next decade.
   • Moreover, companies are planning to construct manufacturing facilities using subsidies from the Chip and Science Act, a number that greatly surpasses the country’s current electrical engineering graduation rates.

How to address the shortage of electrical engineers?

1. Need for More Funding
   • More funding is required to create projects and programs aimed to boost the interest of young students in pursuing electrical engineering. This investment could help companies secure a pipeline of skilled talent for the future. Here are a few examples:
     • IEEE’s ISEC Annual Conference promotes cutting-edge research on integrated STEM education to engage new generations of engineers.
     • Manufacturing Institute’s MFG opens factory doors to students to ignite early interest in manufacturing careers.
     • First Lego League hosts robotics programs and competitions worldwide to encourage STEM learning to children.
2. Need for Education and Training Investments: 
   • Currently, colleges in the U.S. aren’t producing enough talent, and many foreign students, who do not have permanent resident status, are the ones who are earning degrees in this field. The U.S. must produce more college graduates with electrical engineering degrees by investing more in education and training. Besides the U.S. Department of Education’s initiatives to strengthen STEM education, here are a few examples of what companies are doing to contribute:
     • IEEE’s Student Scholarships offers various scholarships, grants, and fellowships, many of which support electrical engineering graduates and undergraduates.
     • NASA’s STEM Projects include student educational resources, college grants, research programs, and competitions to inspire the future generations of STEM workforce.
     • Johnson & Johnson’s STEM²D hosts youth, university, and professional programs partnered with nonprofit organizations to spark the interest of children to pursue higher education and careers in STEM²D.
3. Increased Contract and Immigration Recruiting: 
   • To meet the high market demands, companies are changing their strategies by hiring more contract engineers. BLS states that most job opportunities for electrical engineers will come from engineering services firms as companies turn to contracting to save costs.
   • Immigration rules may also need to change to encourage more graduates to stay and work in the U.S. However, this is a challenge due to its contentious issue.

If you’re facing recruiting challenges, production disruptions, and rising expenses due to engineering shortages, connect with the talent experts at Solopoint Solutions today for targeted solutions to source hard-to-find electrical, manufacturing, and mechanical engineers.