By Christy Zweig Niehues

The rapidly changing economic conditions we’re experiencing are putting salary pressure on AEC firms.

New Hire Survey

New Grads Survey

The U.S. economy grew 5.7 percent in 2021, the fastest rate since 1984, and a rate which only accelerated into 2022. A report from the the U.S. Labor Department in April 2022 stated that its consumer price index jumped 8.5 percent in March from 12 months earlier – the biggest year-over-year increase since December 1981. There’s no doubt that nearly everyone has felt the effects of increases in the cost of housing and price of gasoline. The AEC industry is not immune to these changes!

Zweig Group released the 2022 Salary Reports at the beginning of this year. These reports were compiled with data gathered over the 12 months previous to its release (January 2021-December 2021), and are an accurate and data-based representation of what salary levels were during that time; however, these rapidly changing economic conditions are putting salary pressure on AEC firms, both for new hires and existing employees.

A recent spot survey of webinar attendees for Zweig Group’s Driven by Data series on Competitive Compensation found that almost 50 percent of firms had budgeted more than usual for salary increases at the beginning of this year, but even for the firms that planned ahead, it may not be enough. This same survey found that nearly all respondents reported challenges of increased salary expectations, with statements such as, “Expectations of base salary substantially increased due to inflation. Cannot keep salaries aligned with expectations.” The waterfall effect includes many firms in the industry reporting retention issues, and fee pressures such as, “It’s very difficult for our clients to accept higher billing rates that are necessary for current compensation requirements and scarcity of qualified and experienced professionals.” While 60 percent of firms report they have or are increasing their fees, some respondents report these fee increases are tough to juggle, and may not be enough to meet salary expectations.

Is it all about the money?

Annual base salaries are just one piece of the puzzle when recruiting or retaining valuable talent in an AEC firm. Almost one-quarter, 22 percent of Competitive Compensation Webinar attendees responded affirmatively when asked if non-monetary benefits were providing a suitable alternative to competitive salaries/bonuses/raises; and while 50 percent answered in the negative, almost all respondents agreed that benefits, especially as it relates to flexible schedules and remote work options, are very important to today’s workforce. Seventy-one percent of firms in Zweig Group’s “AEC Workplace of the Future Survey” (the survey Report can be read here) reported their firm has changed its remote or flexible work options since March 2020, and many people are now working differently than pre-March 2020.

In Zweig Group’s second Driven by Data Webinar: Recruitment and Retention, 65 percent of attendees reported that remote or flexible work options have helped their firm’s ability to hire. Adding to this, more than 23 percent of respondents who currently have remote and flexible work options, stated they would consider looking for a new job at a different firm if these options were made unavailable to them.

Even best in class firms are experiencing these same challenges. While the vast majority of employees working at Zweig Group’s 2021 Best Firms To Work For Award-winning firms say they are well satisfied with flexible work hours, these employees are often less satisfied with compensation for extraordinary effort, parental leave, tuition reimbursement, and mentoring programs. Firms looking to go the extra mile to recruit and retain with added benefits would be wise to carefully consider these areas in addition to their total compensation and work-from-home policies.

The next generation entering the AEC workforce has had both an upbringing and educational experience that is vastly different from any generation before. While many Zweig Group clients are already reporting increased starting salary expectations for recent graduates, these individuals also have vastly different expectations for policies, work environments, and team structure. In response to this, Zweig Group has launched two brand-new surveys – unlike anything we’ve ever investigated before.

The first survey is aimed at new hires (those with fewer than three years of experience in the industry) and investigates both salary expectations and attitudes toward workplace policies, firm culture, leadership, and factors that impact productivity, creativity, and motivation.

The second survey asks similar questions, but is aimed at those who are either about to graduate or have just graduated and are considering entering the AEC industry. Both surveys provide survey-takers with a free report of aggregate responses as well as special offers on other Zweig Group resources.

The results of these important studies will be imperative in shaping the AEC workplace of the future and will help guide current industry leaders in making some of the most pressing business management decisions of this era.


Christina Zweig Niehues is Zweig Group’s director of research and e-commerce. She can be reached at czweig@zweiggroup.com.

AEC Workforce of the Future Surveys Zweig Group’s newest surveys investigate salary expectations and attitudes toward workplace policies, firm culture, leadership, and more. If you have fewer than three years’ experience in AEC, please fill out the first survey. If you know someone who is about to graduate or has just graduated and is considering entering AEC, please share the second survey.

Comments