TZL 938

w w w . t h e z w e i g l e t t e r . c o m

HR | FINANCE S U P P L E M E N T S Pages 9 - 12

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Why design professionals don’t earn more

T R E N D L I N E S

Staying put

15%

10%

W e recently ran a couple columns in Structural Engineer magazine discussing why structural engineers don’t make more than they do. You should have seen the volume of email and letters that poured in as a result! There’s lots of anger and frustration, it seems, among all design professionals as to why they can’t seem to make what doctors, lawyers, accountants, and management consultants earn. One fellow mentioned that his son, who is practically fresh out of school and works for a major management consulting firm, bills at $375 per hour. Another talked about “the layers” that other professions, such as lawyers, have, something that allows them to charge $150 per hour for a junior attorney. And yet another reader who works in the power industry claimed he couldn’t come close to charging rates like the rest of the consulting industry. You get the point. It’s an age-old topic, but worth bringing up again. Here are my thoughts on why design professionals don’t make more than they (the majority) do: ❚ ❚ You like it so much you’ll work for free. Client doesn’t want to pay a good fee but it’s a neat project? No problem! You guys are ready to do it anyway because of the publicity you’ll get from it. Client has burned you in the past and been super slow to pay or refused to pay a legitimate bill? No problem. We don’t have anything better to do with our time and it will “keep our people busy.” This stuff kills you! ❚ ❚ Risk aversion. “Design/build is scary.” “At-risk construction? No way!” “Work in the Middle East? You have to be kidding.” I could go on, but you get the idea. Most design professionals really just want to get paid by the hour and design every minute they can and are completely comfortable trading off bigger reward potential for lower risk. It is part of the culture of the business. Mark Zweig points out the origins of the problem.

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Mark Zweig

F I R M I N D E X GOP Limited........................................................... 4 H&A Architects & Engineers................................. 5 MBP, Inc........................................................... 4, 11 Merrick & Company............................................... 3 Morrison-Shipley Engineers, Inc........................... 4 Perkins+Will. ......................................................... 6 P.W. Grosser Consulting, Inc.................................. 9 Shive Hattery......................................................... 5 Winzler and Kelly. ............................................... 11 In another indication of how the A/E/P and environment consulting industry has been affected by the recent economic downturn, turnover rate has seen a steep decline in the last few years. In fact, the 2011 Financial Performance Survey finds that turnover rate – which indicates the annual percentage of employees who have left a firm compared to total employees – fell to a five-year low this year. While the median has remained steady from 2007 to 2009, it dropped from 14.7 percent in 2009 to 13.3 percent in 2010, and in 2011, declined to 10 percent. – Margot Suydam, Survey Manager

See Mark Zweig, page 2

Client doesn’t want to pay a good fee but it’s a neat project? No problem! You guys are ready to do it anyway because of the publicity you’ll get from it. This stuff kills you!

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Stay successful – Is it time to raise rates? Page 4

I N S I D E

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