SE design is usually 50% mixing and 50% authoring. This means they literally do their own sound in a studio (they have equipament for that) or they record on the public (if that's the objective). There are exceptions like procedurally generated sounds, but there's only so much you can do in that front, unless your game is based on sine, square or saw waves.... 

Take a look on how some professional games SEs are done, in some classic fighting games they do things like hit a table with a spoon, lower the pitch, add reverb, distort a bit and you have a "punch" sound.