Designing and implementing an effective compensation and benefits plan can be challenging, especially as the war for talent heats up in 2020. Yet, by understanding the overall financial position of the architecture and engineering industry you can use that knowledge as you consider your firm’s compensation and growth strategy.
PSMJ's HR surveys present many different facets of bonus and benefits, as well as staff and management compensation occurring in the design profession. Interpretation of the 2018 survey results underscores the critical need for architecture and engineering firms to pay close attention to the state of the overall economy, the local market conditions, and their impact on benefits and compensation strategies.
Consequently, all firms should perform compensation evaluations with specific goals in mind. Assessing how your management and staff compensation compare to the market is a key step in your review process. This review should include:
Comparison of staff salary levels against your benchmark groups (e.g., size, region, clients, and market sectors).
Comparison of these same salary levels for internal consistency within your firm (e.g., relative percentage of each staff member’s compensation to the CEO’s compensation benchmarked against your respective peer groups).
Detailed evaluation of your bonus plan to validate that potential rewards are in line with opportunities at other firms.
Reviewing your firm’s individual compensation goals and philosophy is essential to structuring your compensation program. Some firms believe in lower base salaries and higher incentive bonuses, others the opposite. These goals and strategies should be clear, and the firm should periodically evaluate whether or not these goals are aligned with market conditions and if they’re effective in attracting and retaining talent. Now more than ever, a flawed compensation strategy can cost your A/E firm big dollars in increased turnover, unhappy clients, and lost profits.
Thousands of architecture and engineering firm principals will complete PSMJ’s compensation benchmark surveys:
A/E Management Compensation Survey, 38th Edition (Due February 2020)
A/E Staff Compensation Survey, 7th Edition (Due February 2019)