The War for Talent: Does Your Compensation Strategy Measure Up?

PSMJ Resources, Inc.
Posted on: 06/14/17
Written by: PSMJ Resources, Inc.

benchmarking_report-1Designing and implementing an effective compensation and benefits plan can be challenging, especially as the war for talent heats up in 2017. Yet, by understanding the overall financial position of the A/E 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 2017 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 benifits and compensation strategies.

For instance, our interpretation of the data gathered from our 2017 compensation surveys (as well as data gathered for our 2017 Financial Performance Survey) indicates an economy that is growing at a slow but steady pace. Meanwhile, architecture and engineering firm employees are demanding salary increases post recession. In addition, the demand for talent will become more critical as time goes on and the baby boomers retire, because the availability of new graduates is not keeping up with the outflow of talent in the A/E industry. 

Consequently, firms should be continually testing new methods of attracting, keeping, and motivating key staff as business conditions warrant. Cash compensation, however, is only one spoke in the wheel when it comes to employee engagement. The need to adjust both compensation and benefits is a process that firms have to address year after year regardless of the phase of the business cycle. 

Moreover, all firms should perform compensation evaluations with specific goals in mind. These goals should make sure that:

  • Compensation is at a level that is both supportable in the marketplace and sufficiently high enough to attract, retain, and motivate staff.

  • Key personnel receive total compensation competitive with market levels so they are not tempted to leave, join competitors, or start their own practices.

  • The firm’s financial performance is adequate to fund salary increases and incentive bonus plans, which have become important components of many employees’ total compensation packages.

Assessing how your staff compensation and benefits 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.

Review of 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.



These THREE comprehensive reports provide a wealth of exclusive industry and peer-level data for salary, bonus, total direct compensation, time allocations, billing rates, and much more.

Learn more now!





May 19, 2022

Designing Your Ideal Day to End the Chaos

Managing our time and energy has - and always will - be critical to our success in almost all aspects of our lives. Leaders and managers especially need to proactively “change the..

Read More
April 21, 2022

8 Questions to Ask When Looking for Software to Manage Your A/E Firm

You have many options if you’re an architecture or engineering (A/E) firm decision-maker and are looking for software to help you manage your organization. Systems run the gamut..

Read More
April 15, 2022

Why Strategic Plans Languish and Fail

There’s no question that strategic planning is essential for firm success. Yet despite this, the vast majority of strategic plans fail or fail to be fully or successfully..

Read More