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O P I N I O N
Fast (and problematic) growth
W e waited 10 years for business to be booming again, and now that it is, most of our problems have gone away, right? If you’re like the rest of us, your firm is busy. But as the projects and revenue pour in, so do plenty of problems that you’ll have to deal with.
In reality, we just have different problems, and for some firms, more problems. That is because as we grow and add more people, offices, services, clients, and projects, we have so much more complexity to deal with, and potentially more risk. This can lead to a feeling of chaos. Even with a solid infrastructure in place, it can feel like it is broken when everyone is moving 100 miles an hour all the time. Recent industry financial surveys show that the average firm is growing at 10 percent increase in revenue per year, but profits are leveling off. This is because the cost of salary and benefits are increasing faster than fees. Most firms have revisited their strategic plans in the last year, recognizing that changes in technology and competition are driving a more strategic and streamlined approach to running a profitable AEC firm. Recent assessments we have conducted with executives of small, medium, and
large AEC firms have identified the following three issues as the primary sources of stress, and the biggest constraints to growth: 1)Difficulty finding and retaining top talent, es- pecially in the mid-range of eight to 15 years’ experience. Being so busy gives prospective AEC professionals more options, driving salaries up and threatening succession plans and client relationships through attrition. This shortage also forces us to settle for less talented staff for more money, which has the potential impact of lowering profit margins over time if jobs take longer to do and fees do not escalate at the same rate as salaries. With more baby boomers expected to retire in the next few years, this problem will continue to be the major issue fac- ing AEC firms’ growth and profits. 2)Lack of accountability across the organization fueled by the fast addition of new employees, silos, acquisitions, and failure to get the firm’s culture adopted. This causes a great deal of
June Jewell
See JUNE JEWELL, page 12
THE ZWEIG LETTER April 15, 2019, ISSUE 1292
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