There hasn’t been much holding down architecture and engineering (A/E) compensation levels lately. Skyrocketing inflation, an extremely tight labor market, and record levels of backlog have all converged to make the largest operating expense for most A/E firms a bit larger in 2022. Pay raises, according to data in the just-released 2023 A/E Compensation Benchmarking Suite from PSMJ Resources, Inc., reached a 20-year high in 2022 with a median increase of 6% for management, professional, and technical staff. Projected raises in 2023 showed a median level of 5%, an indication of some level of cooling coming this year.

To get a better understanding of the compensation dynamics that are at play, PSMJ’s research team looked specifically at A/E firms that participated in both the 2022 and 2023 compensation surveys and found that Project Managers saw a median year-over-year total compensation increase at nearly 8%.

 “The correlation between compensation strategy and fee strategy has never been more critical,” states PSMJ President Gregory Hart. “Basic math shows us that rising salaries without rising fees creates profit margin compression that can create real long-term problems. Raise fees now. Get more focused on high quality strategic clients. Revisit your pricing model.”

PSMJ’s analysis comes from data found in the A/E Compensation Benchmarking Suite, the online portal for architecture and engineering firm executives and HR leaders charged with balancing the need to find and keep skilled employees with hitting financial performance targets. This tool incorporates compensation survey responses from 330 architecture and engineering firms and reflects the pay of thousands of individual employees and managers. Representing the most current salary, bonus, and total compensation for 18 A/E management titles and 66 A/E staff positions, the portal allows users to break down data within peer groups reflecting different firm sizes, geographic areas, types of services, and types of clients.

PSMJ’s A/E Compensation Benchmarking Suite provides users with multiple data sets and decision-making resources, including the 2023 A/E Management Compensation Benchmark Survey Report, the 2023 A/E Staff Compensation Benchmark Survey Report, and the soon-to-be-released 2023 A/E Bonus & Benefit Plans Benchmark Survey Report, as well as the popular year-end A/E Compensation Strategy Snapshot Report showing pay increase levels planned for the following year, Excel-based comparison tools, and A/E contract labor and intern compensation survey data. To learn more visit www.PSMJ.com/CompSuite.

About PSMJ
For nearly 50 years,  PSMJ Resources, Inc. has been recognized as the leading publishing, executive education, and advisory group devoted completely to improving the business performance of A/E/C organizations worldwide. PSMJ’s sought-after expertise covers a range of critical business areas such as project management, financial management, human resources, business development, transition planning, and mergers and acquisitions.