"The second type of "contractor" is where a services business is established that has numerous clients and/or may hire employees or engage subcontractors, accepts risk for work completed, carries a variety of insurances, manages more complex finances, performs a significant degree of business development to find more clients, etc."
Yeah so in private small/medium general engineering (eg electrical, mechanical, safety, controls etc) it's hard for the organisation to be profitable on any less than AUD200 per hour, paying out 60-70% of that to their best people and less for less experienced, but also slightly lower chargeout.
Larger public companies I am hearing maybe $50 more, but they have really been screwing contractor rates down, while seemingly putting little effort towards overheads.
Genuine talent is getting hard to find, people who can develop design from first principals rather than just what they have seen before (if that) is getting tougher and tougher, mainly because it is a specialised skill but EPC management views all engineers as fungible and hate to pay extra for even obvious talent, fearing a tsunami of rate increase claims from the donkeys.
Page 54 of a Professionals Australia report [1] despite the low sampling size and less reliable methodology mirrors your comment that engineering contractor rates are much lower than ICT contracting rates in Australia.
I'm a qualified engineer in Australia and amongst those who graduated at the same time as me, almost all of them are working in the ICT field. That is where the demand for workers is, and probably the main reasons driving ICT salaries and contract rates higher.
Defence sector engineers also seem to have high rates on par with the ICT field for various reasons including high barriers of entry (Australian citizenship for starters), high levels of federal government investment and little effort expended in training people to join the sector. There are Civil Engineering degrees offered everywhere, but not widespread "Design some ships for the Navy" degrees.
For the mining boom starting about 2010, engineering was highly sought after but was mostly conducted by engineering firms in Europe, America, etc due to the lack of experienced workers in Australia (partly resulting from a massive lull in investment in preceding years). Given that exploration investment is currently at record highs, perhaps engineers with mining industry experience could again be in high demand soon. Engineering related to the renewable energy sector I assume would also be starting a boom cycle too.
The cooling effect on engineering as a profession though I think is the use of standards and resulting cookie-cutter approach of clients being able to almost get the point of saying "Give me an AS/ISO 1234 bridge" or "Give me an AS/ISO 5678 substation". Hence there is not a significant amount of original nor complex engineering performed for most projects, rather, it is performing minor tweaks to existing standard designs. Then there is seemingly more supply for engineering services than there is demand for the services, and qualified engineers end up performing non-engineering roles such as project management and sales within the engineering sectors.
I think the cost of professional indemnity for the more tangible branches of engineering really cuts into revenue in a way software production does not.
You need to insure for life of design, in practical terms it means you pay a premium for 7 years for a design delivered today, dropping off in premium/coverage each year as it is viewed the owners ops and maintenance acquire responsibility over time.
It can get expensive when you might consider an event of, say, blocking Pt Hedland harbour at cost of up to ten billion dollars a month.
I am an EE in the West consulting on electrical, controls, safety, integration etc and holding my own for rates vs IT for all but the most extreme IT rates I have seen or heard of, but only just after the recent run - my wife just changed jobs (in IT field) for an extra 100k, I am on the same rate as 12 years ago, but it was an awesome rate 12 years ago...
Yeah so in private small/medium general engineering (eg electrical, mechanical, safety, controls etc) it's hard for the organisation to be profitable on any less than AUD200 per hour, paying out 60-70% of that to their best people and less for less experienced, but also slightly lower chargeout.
Larger public companies I am hearing maybe $50 more, but they have really been screwing contractor rates down, while seemingly putting little effort towards overheads.
Genuine talent is getting hard to find, people who can develop design from first principals rather than just what they have seen before (if that) is getting tougher and tougher, mainly because it is a specialised skill but EPC management views all engineers as fungible and hate to pay extra for even obvious talent, fearing a tsunami of rate increase claims from the donkeys.