Why You Need to Benchmark Your Compensation Now

PSMJ Resources, Inc.
Posted on: 01/15/20
Written by: PSMJ Resources, Inc.

clock-money-Article-201603311341-3Whether you’re conducting a firm-wide analysis or simply researching one piece of data, all architecture and engineering firm leaders should strive to make sure compensation is at a level that is both supportable in the marketplace and sufficiently high enough to attract, retain, and motivate staff and reward key personnel.

Now more than ever, a flawed compensation strategy can cost your A/E firm big dollars in increased turnover, unhappy clients, and lost profits.

While there are many ways to evaluate compensation, the primary goals of any benchmarking analysis should be to identify where your firm’s results vary from your peers and to focus on areas for change and improvement.  Identifying these changes will enable you to better communicate policies to your key employees and help you find, keep, and motivate good people.

Some Helpful Tips Before You Start
Designing and implementing an effective compensation and benefits plan can be challenging. Following are suggestions for setting strategies and getting organized:

  • Salaries and benefits typically consume 70 percent to 75 percent of a firm’s total cost of doing business. To achieve your firm’s profitability levels, it’s critical to manage these costs effectively and keep them in line with your long-term goals.

  • Never promise to pay your staff bonuses you can’t afford. Be sure the firm’s financial performance is adequate to fund incentive plans and that your goals are achievable with your staff, volume of work, and profit projections.

  • Formulate an action plan to reach your firm’s new compensation goals (or sustain your current levels) and communicate it to all members of your staff.

  • Include representatives from your staff in the plan’s conception, design, implementation, and analysis of its effectiveness. Use their input to help determine which benefits your staff values.

  • When implementing changes to your compensation program always: be honest, communicate the reasons for the changes by focusing on the need to adjust practices to current market realities, and make sure you provide clear warning of upcoming changes and how they will impact each individual.

  • Firms should be continually testing new methods of attracting, keeping, and motivating key staff as business conditions warrant. 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.

To fully evaluate your firm’s compensation plan, we suggest starting with base salary and taking geographic location, firm size, utilization, billing rates, and internal structure into account. Then conduct a detailed evaluation of your firm’s bonus and benefits plan to validate that potential rewards are in line with opportunities at other firms. Performance bonuses, retirement contributions, and time off are crucial components of compensation. 

To help your firm leverage benchmarking to maximize its compensation strategy, PSMJ presents a free webinar   In this data-packed webinar, Sharon Lamantia shares PSMJ’s exclusive A/E compensation benchmarking data and easy to implement approaches to help ensure that your compensation plan drives your firm’s performance results.  PLUS, you get a handy demonstration of PSMJ’s latest salary benchmarking tools ... designed to make accurate and reliable compensation benchmarking a snap!

You can access the recording, slides, and more from the webinar: “Compensation and Benefits Benchmarking Made Easy: Powerful Data, Tips & Tricks for A/E/C Firm Leaders,”  here: 


                                                          Listen now!


MANAGEMENT_STAFF_Surveys_FEB_2020_DEADLINE-1Thousands 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)


Participate Now!



{% set temp_parent_custom_widget_name,parent_custom_widget_name = parent_custom_widget_name,null %}{% set template_types = {'generated_global_groups/4251882131.html': convert_to_template_type(18)} %}{% blog_comments 'blog_comments' cells=[], root=False, row=False, wrapping_html='', label='Blog Comments', cell=False, overrideable=False %}{% set parent_custom_widget_name = temp_parent_custom_widget_name %}
November 22, 2021

Year End is coming – Are you ready?

As the holidays are here, now is the time to start planning for year-end processes and needs. From an accounting perspective, the year end process starts early and ends after..

Read More
November 19, 2021

A new year is coming. What’s your plan?

What a year it has been. Beyond the obvious pandemic-related impacts, infrastructure spending, artificial intelligence, and private equity are just some of the terms you have..

Read More
November 19, 2021

Recent A/E/C Mergers and Acquisitions in the News

November 16, 2021 – Kleinfelder (San Diego, CA) acquired Century Engineering (Hunt Valley, MD) and all affiliates. The transaction closed on November 15, 2021. “The Century..

Read More