How to Benchmark Billing Rates and Salaries For Firm Success

A key factor in an architecture or engineering firm’s ability to pay higher compensation and retain its staff is its ability to raise prices for its services. Changes to the firm’s billing rates are indicative of pricing sensitivity and the balance between supply and demand for design services.

In PSMJ’s A/E Staff Compensation Benchmark Survey Report and A/E Management Compensation Benchmark Survey Report, firms are requested to report the quoted hourly rate for all positions (i.e., proposed billing rates prior to contract negotiation). 

Billing rates are heavily influenced by both level of experience and the current condition of the economy, and require periodic review as salaries and overhead costs change.

PSMJ’s A/E Management Compensation Benchmark Survey Report presents the billing rates, the proposed billing rates prior to contract negotiation reported for each of the 18 positions at the start of each of the past five years. These are the quoted hourly rates including profit and overhead.  

According to the 2019 survey, billing rates for 16 of the 18 management positions in 2019 are equal to or slightly higher than the comparable 2018 findings (see chart below).

PSMJ's A/E Staff Compensation Benchmark Survey Report provides billing rates for each of the 48 positions that design firms have reported at the start of each of the past five years. According to the 2019 survey, billing rates for 37 of these 48 staff positions in 2019 are equal to or higher than the comparable 2018 findings. 

Changes in billing rates should be considered when evaluating your base compensation for each position. Also, coupling billing rate data with key financial benchmarking data, such as achieved direct labor multipliers (which can be found in PSMJ’s annual A/E Financial Performance Benchmark Survey Report), can provide additional insight into the performance of the overall A/E industry.

What is the take away: Comparing current data to your firm’s billing rates helps to ensure your potential salary changes, overhead, and profit are included in your billing rates.

PSMJ's A/E Benchmark Survey Reports and accompanying A/E Benchmark Tools offer complete data to help you achieve best-in-class results.

If you purchase each item separately your cost would be well over $3,000. But with this special bundle pricing you get PSMJ's four 2019 A/E Benchmark Survey Reports along with four accompanying benchmark tools.