Security Clearance Impacts Engineer Salaries
Updated: December 3, 2013 by EngineerSalary Staff

A Secret or Top Secret clearance can provide a significant salary increase for an engineer when compared with their counterparts working in the commercial sector.

With spending increases for defense, particularly in areas such as Cyber Security, engineer salary growth has been fueled by the demand for qualified engineers, scientists and technical managers who are cleared or "clearance eligible". A security clearance for employees is required by most companies working on federal government contracts, including military and homeland security — and on CIA or NSA intelligence initiatives, such as: SIGINT, COMINT, ELINT, C4ISR, IMINT, MASINT, cryptanalysis, information assurance, cybersecurity and database software.

Additionally, firms that have employees working with the Department of Energy (DOE), and many other federal departments, normally require that authority's specific clearance for sensitive projects.

New requests for clearance investigations have inundated the government's Defense Security Service staff, resulting in a greater than 225,000-person backlog waiting for their clearance to be processed and granted.

Depending on the level (Secret, Top Secret, above Top Secret), investigations range from a verification of professional, personal, financial and educational references with a criminal background check, and an explanation of travel outside the U.S. for Secret... to a lengthy and in-depth lifestyle investigation, including polygraph testing for Top Secret.

The candidate under consideration must be a U.S. citizen. The DSS evaluates a candidate's loyalty, character, trustworthiness and reliability, based on personal field interviews with references, and other sources (including state and local criminal record checks).

There are about 4.4 million cleared U.S. citizens: 1.2 million civilians working for private industry and the government, and over three million active military personnel (all branches).

DSS investigates and clears industry personnel under the direction of the National Industrial Security Program — for the Department of Defense and 21 other government agencies. The NISP was established to ensure that industry (and universities), while working on government contracts or conducting research, diligently protect classified material in their possession. DSS has oversight for nearly 11,000 cleared facilities.

CLEARANCE ELIGIBILITY GUIDELINES TIGHTENED

What is involved in obtaining a clearance once I am hired?

There are three parts to a clearance:

Application
Completion of the SF-86 (worksheet version EPSQ SF-86).

Investigation Handled by the Defense Security Service (DSS). Usually completed in about 6 months for Secret, up to 18 months for Top Secret.

Adjudication Results are reviewed, based on factors including allegiance to the United States, personal conduct, and any discovery of substance abuse, mental disorder, or a criminal record. Clearance is adjudicated (granted) following a final evaluation that passes all criteria.

What will cause denial of a clearance?

(1) Conviction in any U.S. court - and sentenced to imprisonment over one year.

(2) Unlawful user of a controlled substance.

(3) Mentally incompetent, determined by a doctor approved by the DSS.

(4) Discharged from the military under dishonorable conditions.

How long are clearances valid?

A reinvestigation is required every 5 years for a Top Secret clearance, 10 years for a Secret. A cleared person can be randomly reinvestigated before they are scheduled.

Are polygraph exams always required?

A polygraph exam is mandatory for employment by the NSA and CIA, and for defense industry Top Secret SCI and SAP access programs.

It is also used to resolve credible derogatory information. No action may be taken solely on the basis of a deceptive result, except by the direction of the Under Secretary of Defense, if the classified information is of such extreme sensitivity that access poses a risk to the national security.


What is the difference between an interim and a full security clearance?

Interim clearances are granted in exceptional circumstances where official functions must be performed before completion of the investigative and adjudicative processes.

T
here is no difference between an interim and a full security clearance (as it relates to access to classified material). However, when such rare access is granted, the background investigation must be expedited.

In a December, 2005 revision of the Adjudicative Guidelines for Determining Eligibility for Access to Classified Information, it was modified from the 1997 version to reflect a shift in policy for granting security clearances. In another 2005 White House memo, guidelines were also changed for individuals with an existing clearance. Both documents are available for download in pdf format: Adjudcative Security Clearance Guidelines and Existing Security Clearance Policy.

Additional documents Suitability Factors for Obtaining a Security Clearance (June, 2007), DOD Management Report 06-02 (March, 2006), DOD Security Clearance Process (April, 2006) can also be downloaded.



WHERE WILL SALARIES GO FOR CLEARED ENGINEERS

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For 2009 EngineerSalary shows an up tick of 11.6% (down slightly from 2008) for a cleared engineer on the East Coast (using 10 years of design experience, B.S. engineering degree and Secret clearance) compared to their counterparts working in the commercial sector. Add Top Secret or higher and this differential jumps to over 15% on average (all engineering disciplines surveyed). The West Coast lags slightly behind at 11.4% and 14%. 2010 is projected to follow current data.

Some surveys indicate a 25% (or larger) across-the-board increase in salary when working in a job that requires clearance. These numbers are misleading, because they are applicable to small regional areas. Users of these surveys, when applying these multipliers to salary calculations in other areas, may preclude receiving an offer - or decline an offer based on inaccurate data. Providing questionable information (and encouraging unreasonable salary expectations for job seekers) is counterproductive.

The highest paid cleared engineers and managers are located in Washington, DC, followed closely by Virginia and Maryland.

Massachusetts, New Jersey, Arizona, Colorado, Texas, California and New York scored in the top 10, due to a concentration of defense sector companies in those states. In DC and Virginia salaries were, in some cases, nearly 22% higher than for the same position and level of responsibility in a non-cleared environment (attributed to a combination of clearance and cost of living).

The current demand in the defense sector is high for experienced software, electrical and RF engineers and technical managers. Many of these in-demand professionals have used their technical skills and clearance to leverage higher income when moving to a new company, or negotiating increased compensation with their current employer.

Engineers and technical managers with a Secret or Top Secret clearance earn the highest salaries relative to other occupations.

Non-technical employees (finance, sales, administration, clerical, manufacturing) with a Secret clearance can expect to be paid slightly above prevailing local compensation (typically 3-8%), but the differential for engineers and engineering managers is the most significant of any profession... due strictly to increasing scarcity of qualified candidates. The demand for technical professionals is currently well ahead of supply.

The quantity of engineers graduating from American colleges and universities that are U.S. citizens who are "clearance eligible" is decreasing, which shrinks the overall pool.

Defense companies nationwide will continue to aggressively compete for U.S. citizens with an engineering degree. Don't expect offers to go off the scale, but these numbers are destined to crawl slightly higher every year (>0.67%/yr increase from 2000-2010).

The market and urgency sets the value, using basic supply and demand principles.

EngineerSalary estimates (using the current salary data adjusted for inflation) a national differential average of 14% or higher will exist until 2014 (using compensation data from all states except AK and HI to determine percent of average). This number would move downward only if defense spending decreases significantly under the new administration.

Engineers can't apply for a security clearance as a way to enhance their marketability. Instead, they must be hired by a company with a government contract — for a position that requires specific access to classified material to do their job — before the DSS will begin the time consuming and expensive clearance process (initiated by the company's security officer). As a result, the market for engineers with an active clearance is so tight that they can see a hefty bump in salary when moving to a new employer. For Top Secret, TS/SCI, TS SI/TK, TS/EBI (and other TS clearances) these numbers move even higher.

Security clearances have become a negotiable commodity, helping astute engineers and managers leverage higher salaries.

The process, however, for cashing in on a clearance usually requires accepting an offer from a new employer and changing jobs.

In a recent survey, it was found that long time employees with various levels of clearance were not receiving compensation equal to less experienced engineers that opted to change their employer. This applied to employers hiring engineers at levels, in some cases, 15% higher than existing long time employees (with more applicable experience). It is not uncommon to see salaries increase by $7K to as high as $25K by moving to a new employer.

Some companies, to retain valuable human capital, have remained industry competitive. Many others haven't.

This has created increased interviewing by many engineers, to evaluate what they are worth on the open market. They are taking these offers back to their employees for adjustment (in some cases), but most are changing jobs more frequently to maximize their income. A defense company's profitability can be linked directly to the retention rate of their cleared technical employees, causing many to rethink their salary structures frequently, particularly for engineering staff.

Employers lure experienced and cleared engineers away from their competitors with more interesting work, and increased responsibilty — usually at a better salary. Many defense technology companies are offering incentives to a new hire in the form of a starting bonus (in addition to base salary), or a year end performance bonus — or both. Sign-on bonuses are ranging from $2,000 at the low end to over $20,000 at the high end (depending on urgency, previous experience and skills).

Other incentives include offering additional vacation, more personal time off, professional training (with funding for advanced degrees), along with flexible work hours. Child care is one of the most highly valued perks. A few companies even report that they are leasing cars for senior managers. Benefits packages are being individually designed, in some cases, to fit the employee's specific needs... to incentivize moving.

Some employers offer financial planners to assist the employee with tax preparation, paid for by the company. Some offer free cafeteria service. Perks aren't limited to the defense industry giants... even the smallest employers are getting more creative... and aggressive... in designing packages to compete for and attract the best engineers. The understand that they can compete with larger companies when they have better talent.

Relocation funded by the company is common — minus a house buy. Most employers are also providing a company-funded allowance for temporary living expenses, ranging from a couple of months to six months (in a few cases even longer). Many include a house hunting trip for the spouse (after acceptance of the offer). In fact, since mid-2007, some companies are now offering to fly both husband and wife in for the initial interview, so that the spouse can meet with a realtor (and survey the area) while the husband or wife interviews.

Companies are using specialized job fairs to meet experienced engineers with "a ticket".

The latest iteration is the job fair exclusively for cleared professionals, allowing the candidate to meet and evaluate many defense companies in a single day. Participating companies bring members of their engineering staff to discuss the products, technology, culture and environment. If mutual interest is established, the company schedules a on site interview. Candidates and employees report great success in attending these hiring events.

This waiting period (six months or more from hire date for a new Secret, up to 18 months for a Top Secret) has forced companies to look for other innovative ways to add cleared engineers to their workforce — by hiring individuals who already have an active (or even recently expired clearance).

Some are buying companies whose engineers already have clearances.

The need for employees with clearances played a role in several defense industry mergers, including General Dynamics $1.2 billion acquisition of Veridian. When SRA International bought Orion Scientific, the acquisition of the software company included 85% of its employees with security clearances.

GD expanded its payroll by 7,300 workers when it bought Veridian (about 70% of them with clearances) and also acquired Creative Technology Inc., which was working on intelligence contracts. More than 75% of that company's employees held various levels of clearances.

Other companies are focusing their recruiting efforts on military personnel separating from the service.

For this article, nine Fortune 500 defense companies were contacted by EngineerSalary, and all said that they hire very few ex-military engineers, because most were users of technology, rather than designers. Five employers did say they are hiring technicians direct from the military. This adds another layer of difficulty in finding cleared engineers to fill design and development roles.

A non-salary benefit of a clearance: the requirement locks out foreign nationals, and prevents the position from being offshored. Even dual citizenship will disqualify an individual from consideration, according to the DSS.

The most common security clearances (defense companies seek engineers with clearances highlighted in red) are:

    • DOE-L (Energy, Secret)
    • DOE-Q (Top Secret)
    • DOJ-NACI (Justice)
    • DOJ-Sensitive
    • DOJ-Secret
    • IRS - MBI (Treasury)
    • NATO - Cosmic (NATO, Classified Material)
    • NATO - Secret
    • NATO - ATOMAL (Atomic Secrets)
    • Secret (Department of Defense)
    • Top Secret
    • Top Secret SBI - TS/SBI
    • Top Secret SI - TS/SI (Special Intelligence)
    • Top Secret CISP - TS/CISP
    • Top Secret ISSA - TS/ISSA
    • Top Secret SAP - TS/SAP
    • Top Secret SCI - CI Polygraph - TS/SCI/CI Poly
    • Top Secret SCI Full/Scope Lifestyle - TS/SCI Lifestyle Poly
    • Top Secret SCI - TS/SCI (Sensitive Compartmented Information)
    • Top Secret SSBI - TS/SSBI (Single Scope Background Investigation)

ENGINEERS IN FEDERAL GOVERNMENT SERVICE

The federal government has had difficulty, in the past, recruiting and retaining its engineering employees because its salary classification system was not competitive with the private sector.

To rectify this, the federal government established a special wage rate system for certain professional or technical occupations, including engineering. "Specialty Pay," (as the system is known), intended to close the gap in salary levels between federal and private sector professionals. Doing so assists the federal government in overcoming compensation barriers to the recruitment of engineers and scientists.

The federal government has also adopted a "Locality Pay" system. Federal workers in high cost-of-living areas are compensated at higher rates, in order to bring employees' salaries in line with private sector salaries in the same area. For example, over the last two years federal employees living in Washington, D.C. area received locality pay increases, which totaled 5.65%.

Competition is expected for many Federal positions, especially during times of economic uncertainty, when technical professionals seek the stability of Federal employment.

In 2009, the Federal Government (excluding the U.S. Postal Service) employed roughly two million civilian workers, making it the nation's single largest employer. Because data on employment for certain agencies is not released for national security reasons, this total does not include employment for the Central Intelligence Agency, National Security Agency, Defense Intelligence Agency, and National Imagery and Mapping Agency.

FEDERAL GOVERNMENT CONTRACTORS IN ENGINEERING

According to statistics compiled by GSA, Army technical "contractors" earned an average of $108,000 in FY 2006, while Army civilian engineers made an average of $65,800 and military personnel earned an average $67,900 (source: Army Cost and Economic Analysis Center).

The contractor figure reflects wages alone, while the civilian and military figures represent wages plus benefits, meaning the gap between average salaries in the public and private sector is even larger than these figures indicate.


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Some companies require engineers to have DOD security clearances: Secret, Top Secret, Top Secret SCI, Top Secret EBI, Top Secret Poly, Top Secret Full Scope, TS/EBI, TS/SBI, TS/SCI, SCI accesses, ISSA Lifestyle Poly, Top Secret SSBI, Top Secret CISP, Top Secret SAP, TS/SSBI, Top Secret SCI full scope polygraph, Top Secret STN TS/STN, DOE Q, DOE L, DOJ-NACI. The engineering salary calculator tracks wage differentials for engineers and engineering managers with active Department of Defense Secret and Top Secret clearance at all experience levels. Top Secret clearance is reported collectively as one category, because EngineerSalary.com records do not detail accesses above Top Secret. Engineers and Engineering Managers with security clearances exceeding Top Secret should add a small percentage to the salary amount returned by the salary calculator.

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