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Chad Clinehens | Publisher cclinehens@zweiggroup.com Sara Parkman | Senior Editor sparkman@zweiggroup.com Tel: 800-466-6275 Email: info@zweiggroup.com Online: zweiggroup.com/blogs/ news
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Median Base Salary U.S. + Tax, Benefits, Admin
Outsourced Cost (All-In)
Savings
Project Manager (Struct.) Project Engineer (Mech.)
$150K ($107K + $43K) $127K ($90K + $36K) $84K ($60K + $24K)
$74K $67K $41K
50.7% 47.2% 51.2%
Drafter, Engineering
~8 weeks (some positions >5 months)
Time to Hire
~3 weeks
>5 weeks per hire
Two-year TCO Savings (project team: 1 PM, 2 Engineers, 2 drafters) Time Savings (project team: 1 PM, 2 Engineers, 2 drafters)
$560K
>25 weeks
local codes and regulations. These are still areas to keep an eye on, but if you’re working with a quality outsourcing partner, you have flexibility similar to at-will employment. If work quality or communication isn’t up to par, you can release these individuals through your partner with very little friction; they deal with the rest. There are a few things to consider when looking for an outsourcing partner. First, expect high degrees of experience from the talent provided. Second, ensure they allow you to put their candidates through the same interview process as your domestic hires. Third, confirm the outsourcing partner has a solid understanding of the market. Lastly, check their attrition rates; low attrition typically suggests that they value competitive pay and employee retention over high mark-ups. This approach ensures you continue to work with top-notch talent who are well compensated. A win-win for both sides SOME CLOSING THOUGHTS. No doubt there are elements of nearshoring that will require learning and iteration, but this is an opportunity architecture and engineering firms should take seriously. If you’re a small to midsized engineering or architecture firm that has already started this process, you’re ahead of the curve. You can confidently consider yourself an early adopter at this stage. For those who haven’t, Zweig Group would recommend starting with a pilot project to ensure the process works as expected. As they say, you don’t know what you don’t know. All of this isn’t to imply we should outsource all functions of our business. There are many aspects of our industry that can’t be done overseas. Nearshoring is meant to supplement our work, make our jobs easier, minimize staffing shortages, increase margins, increase reinvestment, and ultimately grow our organization to reward everyone involved. If this is an area of interest for your firm but you don’t know where to start, Zweig Group’s strategic planning team is here to help. Travis White is a strategy and operations consultant at Zweig Group. Contact him at twhite@zweiggroup.com.
TRAVIS WHITE, from page 1
weren’t open to remote work up until the pandemic in 2020 – even less so, outsourcing work. This event forced most architecture and engineering firms to reconsider remote work as a viable option. As a result, many firms have been rethinking their opinion on staff augmentation. Since then, the number of Zweig Group clients who ask about outsourcing resources has become more and more common. Outside of added remote working capability, a combination of factors have caused this shift. To start, the talent shortage within our industry is pervasive. Average backlog remains at an all-time high. Based on Zweig Group data, the average AEC firm has 9.9 months of work waiting to be started. Almost all Zweig Group clients report having more work than their staff can handle – particularly around the project engineer to project manager level. Nearshoring presents an almost immediate option to address gaps in staffing with highly experienced talent that can be very difficult to attract in the U.S. For additional perspective, according to Zweig Group’s 2023 Recruitment & Retention Report , 62 percent of the “most difficult positions” to hire for in the AEC industry take more than five months to fill. Next, prior to implementing a strategic plan, the percentage of architecture and engineering firms that possess a true competitive advantage over their counterparts is few and far between. This leaves most firms competing on price, which leads to complaints of “commodity-like pricing.” Nearshoring work helps firms in this position increase margins and therefore accelerate growth, which leads to expanded business opportunity. Finally, with the rise of nearshoring in Latin America, all of your staff remain in the same or similar time zone. This means that interactions and communication with offshore staff should be no different than any other remote employee. NOW, LET’S TALK ABOUT HOW TO DIMINISH THE RISKS INVOLVED. Historically, most firms were concerned about quality of work, level of communication, and knowledge of
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THE ZWEIG LETTER SEPTEMBER 16, 2024, ISSUE 1553
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