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T R E N D L I N E S W W W . T H E Z W E I G L E T T E R . C O M J u n e 5 , 2 0 1 7 , I s s u e 1 2 0 3

Reducing turnover

When a senior person turns in their notice

More than 12,000 employees in the AEC industry replied to Zweig Group’s recent Best Firms to Work For survey. When asked about the most effective methods for reducing turnover and improving retention of key employees, respondents said that challenging work is the most effective. Excellent benefits and the opportunity for increased responsibility were the next two most effective ways of keeping employees happy. The prospect of career growth rounded out the top four. The rating scale was based on one to 10 with 10 being very effective.

W e’ve all experienced it. It usually happens on a Monday but it could be Friday or any other day of the week. I’m talking about when one of your most senior people surprises you with turning in their notice to leave. It’s usually explained by something that reveals little information. He or she is “leaving for a better opportunity,” and they “appreciate all you have done for them,” but not enough to stay! No matter the reason, this person is either GONE now or will be soon. The issue is what can you DO about it? The past is the past. What matters now is how will you move forward. Here are some thoughts: 1)Don’t make a counter offer. Making a coun- ter offer is usually a mistake. Some firms will always attempt to throw more money at some- one – make them new promises – in order to keep them on-board. But the truth is, that rarely, if ever, works out. There are about a mil- lion reasons. But first and foremost, someone held a gun to your head. It’s like a shotgun wedding. You aren’t getting married because you want to. Not good. On top of that, they al- ready decided to leave. What makes you think that isn’t going to crop up again? And last, this sets a terrible precedent in the firm. Anytime someone wants to make more money all they have to do is turn in their notice. 2)The most important thing is to immediate- ly find a replacement for the person who is leaving. And if you can, the best place to find that person is on your current employee roster.

“Like any divorce – in business or in one’s personal life – if you keep your head high and concentrate on taking action, you will get through this problem. Always take the proverbial high road.”

Mark Zweig

OPEN FOR PARTICIPATION zweiggroup.com/survey-participation/

F I R M I N D E X Arconic. ..................................................2 CR architecture + design.........................6 Finley Engineering Group. .......................4 Fluor Corporation....................................4 Jacobs Engineering Group Inc................8 T.Y. Lin International..............................10

MORE COLUMNS xz M&A INSIGHTS: Outside perspectives Page 3 xz RECRUITING NOTES: Employee retention is everything Page 9 xz GUEST SPEAKER: Flat lining Page 11

See MARK ZWEIG, page 2

Page 6 Conference call: David Arends

T H E V O I C E O F R E A S O N F O R A / E / P & E N V I R O N M E N TA L C O N S U L T I N G F I R M S

ON THE MOVE ARCONIC ADDS TWO EXCEPTIONAL DIRECTOR CANDIDATES TO COMPANY SLATE, BRINGING VALUABLE AEROSPACE EXPERTISE Arconic announced its nomination of former Boeing Commercial Airplanes President and Chief Executive Officer James “Jim” F. Albaugh and Air Force retired General Janet C. Wolfenbarger for election to Arconic’s board of directors at the company’s 2017 annual meeting. Albaugh and Wolfenbarger will stand for election with current directors David Hess, Amy Alving, and Ulrich Schmidt. Ratan Tata, who has been a valued member of the board, has resigned as a director to focus on other business interests. With his departure, the board has nominated Albaugh and Wolfenbarger to stand for election to fill the two vacancies on the board. Arconic previously offered to appoint two Elliott Management nominees to the board. Elliott and its nominees rejected the offer. Upon the election of Arconic’s candidates, nine directors of 13 will have joined the board in the last 16 months, making it one of the shortest tenured boards in the S&P 500. Arconic’s board would continue to consist of 13 directors, 12 of whom are independent, and three of whom were nominated by Elliott last year. Together, Arconic’s director nominees for the 2017 annual meeting have decades of combined aerospace and defense experience. Their deep expertise spans aerospace structures, jet engines, defense, manufacturing and engineering, technology, finance, and purchasing – all highly relevant to Arconic’s core business.

Take your advice from Mark Zweig to-go.

Albaugh is an internationally recognized aerospace executive who was the president and CEO of Boeing Commercial Airplanes until his retirement in 2012. Prior to that role, Albaugh was president and CEO of Boeing Integrated Defense Systems and president of Rocketdyne Propulsion and Power. Albaugh is the chairman of the National Aeronautic Association, past chairman of the Aerospace Industries Association, and serves on the boards of American Airlines and Harris Corporation. He holds a master’s degree in civil engineering from Columbia University and is an elected member of the National Academy of Engineering. The aerospace segment represents close to half of Arconic’s overall revenue today and has significant prospects for the future. Albaugh brings a deep understanding of the aerospace segment’s needs. Wolfenbarger is a retired four-star general who was responsible for procurement, science and technology, test and evaluation, logistics and supply chain for the U.S. Air Force; she oversaw an approximately $60 billion annual budget, including a large portion of the approximately $1 billion of business that Arconic does in the defense industry. In her last military role, Wolfenbarger oversaw an organization of 80,000 people and led significant restructuring of the Air Force Materiel Command to improve efficiency. Wolfenbarger was the first female four-star general in Air Force history. Among her many accomplishments, Wolfenbarger holds a master’s degree in aeronautics and astronautics from the Massachusetts Institute of Technology.

thezweigletter.com/category/podcast/

1200 North College Ave. Fayetteville, AR 72703 Mark Zweig | Publisher mzweig@zweiggroup.com Richard Massey | Managing Editor rmassey@zweiggroup.com Christina Zweig | Contributing Editor christinaz@zweiggroup.com Sara Parkman | Editor and Designer sparkman@zweiggroup.com Liisa Andreassen | Correspondent landreassen@zweiggroup.com

MARK ZWEIG, from page 1

Promotion from within – a real history of doing it – is always one of the keys to long- term success and the firm’s ability to keep people over time. But if you don’t have that ideal candidate inside, don’t let any grass grow under your feet finding someone from the outside. Too often firms act like they are so stunned they let weeks go by without even STARTING to look. No reason for that! Get on it now! 3)Communicate with everyone else in the firm quickly, and move to shore up any of the people who worked directly with or under the person who is leaving. Many times, people on their way out the door attempt to recruit their underlings or co- workers to go with them. The best defense is a strong offense. Ask these people directly if they are considering leaving. If they need a pay boost or some new tools or a better workspace, give it to them quickly. 4)Communicate with your clients immediately. Assure them all is well, you have someone specific or a number of other potential replacements on board, and that you wish old “so-and-so” the best in their future endeavors. Hold your head high, and avoid the temptation to trash talk the person who is leaving – no matter how justified it may seem to you. Like any divorce – in business or in one’s personal life – if you keep your head high and concentrate on taking action, you will get through this problem. Always take the proverbial high road. When you do, things may turn out to be even better in the end! MARK ZWEIG is Zweig Group’s chairman and founder. Contact him at mzweig@zweiggroup.com.

Tel: 800-466-6275 Fax: 800-842-1560

Email: info@zweiggroup.com Online: thezweigletter.com Twitter: twitter.com/zweigletter Facebook: facebook.com/thezweigletter Published continuously since 1992 by Zweig Group, Fayetteville, Arkansas, USA. ISSN 1068-1310. Issued weekly (48 issues/yr.). $375 for one-year subscription, $675 for two-year subscription. Article reprints: For high-quality reprints, including Eprints and NXTprints, please contact The YGS Group at 717-399- 1900, ext. 139, or email TheZweigLetter@ TheYGSGroup.com. © Copyright 2017, Zweig Group. All rights reserved.

THE ZWEIG LETTER June 5, 2017, ISSUE 1203

O P I N I O N

Outside perspectives Learning from external sources can be highly beneficial, but you must also master the art of blocking out the noise and staying the course.

I have to admit it: I often feel like a fraud dispensing advice to our readership in articles like this one. Our audience consists of some of the most intelligent, thoughtful firm leaders that I’ve ever met (and many I have not yet met), who have overcome unique challenges and approached growth and evolution in creative, inspiring ways. I learn from every single client engagement and each seminar I teach, and it’s humbling. But this isn’t an article about my own personal insecurities. That would take at least a full newsletter, maybe even a month’s worth of newsletters! Instead, this is a discussion about the value of outside perspectives, which come from a variety of sources.

Jamie Claire Kiser

the organization chart (CEO to new principal, for example), and in terms of the services that par- ticipants provide (from design to construction), “Seminars and conferences have been the setting for some of the most thought-provoking conversations I’ve had.”

❚ ❚ External board members will challenge your leader- ship team. A good external board member will not only infuse fresh life into the routine meetings, but they will also push back on the dreaded “We’ve always done it this way” approach with one simple question: Why? Suddenly, your leaders will have to be prepared to explain their logic to someone with- out the confines of internal politics holding them back. ❚ ❚ Seminars and conferences have been the setting for some of the most thought-provoking conversa- tions I’ve had. These dialogues cross vertical lines in

See JAMIE CLAIRE KISER, page 4

THE ZWEIG LETTER June 5, 2017, ISSUE 1203

BUSINESS NEWS BRIDGE DESIGNER, ALEX RANDELL, E.I. RECOGNIZED FOR HIS AWARD-WINNING RESEARCH CONTRIBUTION ON POST-TENSIONED GROUT ISSUES Bridge design and construction engineering firm, Finley Engineering Group (#2 Best Firm Structural for 2016) is proud to congratulate Alex Randell, E.I., bridge designer at Finley, Marcelino Aguirre, and Trey Hamilton on winning the 2017 Post- Tensioning Institute Kenneth B. Bondy Award for the Most Meritorious Technical Paper on the “Effects of Low Reactivity Fillers on the Performance of Post-Tensioned Grout.” The PTI Technical Advisory Board presents awards annually to individuals who have made a significant contribution to the PTI body of knowledge. This award was presented at the 2017 PTI Convention Awards Dinner. This study was initiated by the Florida Department of Transportation because of the issue of post-tensioning tendon corrosion. The research team was tasked with studying, reproducing, and determining the cause of soft grout. After an exhaustive study, the team isolated the issue and provided recommendations for improving the performance of PT grouts. FDOT has recently revised its post-tensioning policy and has specified the use of wax to fill all

external tendons and selected internal tendons. Randell completed this research during his graduate studies at the University of Florida and he is an ASBI Certified Grouting Technician Training PTI Level II. For the past three years, he has worked at Finley on projects including the Bayonne Bridge Navigational Clearance Program Approaches in New York, the I-49 Segment K Phase 2 Interchange in Louisiana, and the Road 1 Motza Bridge in Israel. FLUOR SELECTED BY MARATHON FOR CONTRACT AT TWO TEXAS REFINERIES: PROJECT TO ACHIEVE U.S. EPA TIER 3 GASOLINE SULFUR STANDARDS Fluor Corporation announced that it was selected by a division of Marathon Petroleum Corporation to execute the engineering and procurement scope for a major reconfiguration at Marathon’s Galveston Bay and Texas City, Texas refineries. Fluor will book the undisclosed contract value into backlog in the first quarter of 2017. “Fluor continues to provide sustaining capital services at five Marathon sites across the United States, and has supported the Texas City and Galveston Bay operations since 2013,” said Mark Fields, president of Fluor’s energy and chemicals business in the

Americas. “Having previously executed the initial studies and early engineering for these projects, we are proud to progress them through the engineering and procurement phase.” The reconfiguration will create a more efficient operation, allowing the two refineries to achieve updated U.S. Environmental Protection Agency Tier 3 gasoline sulfur standards. The scope includes a new unit, modernization of several existing units, and modifications to the utilities and offsites to support the scheduled process changes and refinery connections. Fluor is also performing the front-end engineering and design work for Marathon’s South Texas Asset Repositioning program. Fluor is a global engineering, procurement, fabrication, construction, and maintenance company that designs, builds, and maintains capital-efficient facilities for its clients on six continents. For more than a century, Fluor has served its clients by delivering innovative and integrated solutions across the globe. With headquarters in Irving, Texas, Fluor ranks 155 on the Fortune 500 list with revenue of $19 billion in 2016 and has more than 60,000 employees worldwide.

inform our actions, but they can also cause us to make bad choices. If you have a strategic plan and have taken a direction as a company that you believe in, stay the course. It’s all too easy to look to a single instance – losing a job to a competitor, for example – and react suddenly and erratically. “Lower the fees! We charge too much!” Have you worked to differentiate your business as the lowest cost provider? If so, then perhaps you do need to lower the fees. If your strategy is to differentiate with expertise, however, focus next time on selling that knowledge. It is challenging to find the line between innovation and context that helps us move forward and upward on one side, and on the other, keeping our heads down and focusing on what drives our company’s success. Being a good consumer of external perspective is an art, not a science. As my opening paragraph pointed out, y’all are more than equipped for the task. JAMIE CLAIRE KISER is Zweig Group’s director of consulting. Contact her at jkiser@zweiggroup.com. “Outside perspectives can inform our actions, but they can also cause us to make bad choices. If you have a strategic plan and have taken a direction as a company that you believe in, stay the course.”

JAMIE CLAIRE KISER, from page 3

cross horizontal perspectives as well. Hearing the challenges that PMs in 25-person architecture firms face versus PMs in 450-person engineering firms face – and listening to these PMs speak to each other about their common problems and solutions – is fascinating. ❚ ❚ New hires are one of the demographics that I always request to include as part of our on-site strategic planning interview process. New hires – not necessarily brand new graduates, just people who are new to the firm – have not only seen how other firms operate, but, importantly, they’ve chosen our firm. They’ve invested their careers and their talents and their enthusiasm into our company – and knowing as much as we can about how we look to these people and how we can har- ness their energy is a worthwhile endeavor. Take a new hire to lunch after they’ve worked at your firm for a month and ask them why they took the job, how reality has lined up with ex- pectations, and what they think this firm could do, and you’ll be blown away by their feedback. “Being a good consumer of external perspective is an art, not a science. As my opening paragraph pointed out, y’all are more than equipped for the task.” The counterpoint to my urge to look to the outside is that we cannot allow ourselves to be distracted from our strategy by external noise. Outside perspectives can

THE ZWEIG LETTER June 5, 2017, ISSUE 1203

Learning Today...

LEADING TOMORROW

SEMINARS

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THE ZWEIG LETTER June 5, 2017, ISSUE 1203

David

P R O F I L E

Conference call: David Arends David Arends, president and CEO of CR architecture + design (Hot Firm #19 for 2016), a 175-person firm based in Cincinnati, Ohio.

By LIISA ANDREASSEN Correspondent “E ntrepreneurship is not a standard genetic of architects, so it’s something that has to be nurtured,” Arends says. A CONVERSATION WITH DAVID ARENDS. The Zweig Letter: What’s your philosophy on fee/ billing and accounts receivable? How do you col- lect fees from a difficult client? David Arends: It’s pretty simple. We bill on a 30- day cycle for work completed. All payments are due 30-day net. When a bill goes beyond that, we try to find out why. Late payment is often a client’s way of communicating that there’s something they’re not happy about. In most cases, it’s not that they

don’t have the money, there’s more to it than that. So, first, we try to find out if there’s something on our end that we need to work on and correct. If it’s simply a matter of a repeated delinquency, we then have to assess if we want to work with this client again. Luckily, we don’t have a lot of problems with A/R. “Entrepreneurship is not a standard genetic of architects, so it’s something that has to be nurtured.”

David Arends, President and CEO, CR architecture + design

TZL: What’s the recipe for creating an effective board?

DA: I’m not a big fan of inside boards, but the state

THE ZWEIG LETTER Ju

dArends

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TZL: Once you’ve won a contract, what are the “marching orders” for your PMs? DA: Follow protocol. When I see a project going sideways it’s always because one of the steps in our protocol was not fol- lowed. We need to solidify the contract, define the scope of the project, set the budget, ensure we have right resources, etc. Sometimes people forget about that stuff. TZL: How does marketing contribute to your success rate? Are you content with your marketing efforts, or do you think you should increase/decrease marketing? DA: If you ask 10 people what marketing is, you’re going to get 10 different answers. For me, marketing is linear and it has to be in this order: 1)Call marketing. Brand building; clearly defining who we are. 2)Relationship development. This won’t be successful if num- ber one hasn’t been achieved. You’re never going to be suc- cessful if you just chase RFPs. 3)Project focus. If number one and number two happen, proj- ects will follow. Marketing is achieved through all the usual channels – so- cial media, marketing collateral, etc. Our linear marketing works for us. TZL: What has your firm done recently to upgrade its IT system? DA: I have no idea. I just write the checks. No … really … we’re continually investing in video conferencing technol- ogy, Revit, and rotate our work stations out every three years. “We stalk clients before they stalk us. What do I mean by that? I mean that we research everything we can about clients we want to approach about new work. We are then in a position to meet them and have a meaningful conversation about working together.” TZL: What’s the best way to recruit and retain top talent in a tight labor market? DA: Recruitment and retention is somewhat of a mess in our industry. I recently read that 88 percent of the employ- able workforce in the U.S. does not love their job. Out of that 88 percent, 30 percent have their resumes on the street. Seventy percent of the same group would be flattered if ap- proached by another company. As a result we have hired two in-house recruiters. They drink our Kool-Aid and are See CONFERENCE CALL, page 8

requires that we have one since we are a C-corp. As a re- sult, we have two boards – one inside and one outside – and they each have different functions. The inside board is more a matter of ratification. The outside board is the one that drives me. It’s made of people who have no specific interest in the company. It’s a non-voting board and everyone comes from a different industry – none are from our field. A third- party helps us to select the members and they are brought on to help in three key areas: 1) Fast growth 2) Marketing excellence 3) Operating excellence We’ve had an outside board for eight years now and it’s hugely valuable. “I prefer to reward people through compensation and benefits and most of the time people want that. When you tell them what ownership really entails, they’re usually like, ‘No, I don’t think that’s for me.’” TZL: Is there a secret to effective ownership transition? DA: No. There’s no secret. There are so many variables – size of firm, services, etc. I’m a big fan of the “less is more” con- cept. I’m in a position where I am 100 percent owner and I don’t believe that ownership should be given to just anyone simply because they do a good job. You really need to un- derstand what ownership means. I prefer to reward people through compensation and benefits and most of the time people want that. When you tell them what ownership re- ally entails, they’re usually like, “No, I don’t think that’s for me.” TZL: How do you go about winning work? DA: We’re fortunate enough that 80 percent of our revenue is from existing clients. We don’t chase projects, we work on developing potential client relationships first. We stalk cli- ents before they stalk us. What do I mean by that? I mean that we research everything we can about clients we want to approach about new work. We are then in a position to meet them and have a meaningful conversation about working together. TZL: What’s the greatest problem to overcome in the pro- posal process? DA: Fully understanding the deliverable and being respect- ful of client requests. Often, we need to help them more clearly define their needs. Sometimes they are not sure of the questions they need to ask.

une 3, 2017, ISSUE 1203

BUSINESS NEWS NJDOT APPOINTS JACOBS FOR NEW INTELLIGENT TRANSPORTATION SYSTEM ON ROUTE 18: TRAFFIC SIGNAL SYSTEM CONTRACT INCLUDES CONSTRUCTION ADMINISTRATION AND INSPECTION SERVICES Jacobs Engineering Group Inc. has received a contract from the New Jersey Department of Transportation to provide construction administration and inspection services for the Route 18 Traffic Signal System project in East Brunswick and New Brunswick, New Jersey. The Route 18 project consists of the installation of new Intelligent Transportation Systems equipment and upgrades to the existing traffic signal system.

Jacobs’ construction administration and inspection services include the installation of image and radar detectors, Controlled Traffic Signal System cameras and fiber optic cable at 23 locations along the Route 18 corridor. The project is scheduled for completion by November 2017. Jacobs will oversee a traffic study to be conducted prior to the start of any work to determine daily volumes at each traffic signal, average corridor travel time, and average intersection delay. The findings will be compared with the information obtained when the system is integrated and operational. Once

the equipment is installed and integrated into the NJDOT Statewide System, a verification and validation plan will be executed and testing performed. “Jacobs has worked alongside NJDOT on many projects over the past 60 years,” said Jacobs Senior Vice President Buildings and Infrastructure Randy Pierce. “This experience, combined with our proven capability in transport engineering services including ITS, positions us well to help NJDOT meet the challenges and opportunities of this rapidly changing technological landscape.”

TZL: What’s your preferred strategy for growth, M&A or organic? Give us a synopsis of how your firm effected growth in the recent past. DA: I’m a fan of organic growth. We have three strategies, but No. 2 below is our preferred one: 1)Cold start. Send someone into a region you want to be in and set up shop. You have to be patient with this one. 2)Warm start. You find a market where you already have estab- lished client relationships and resources. You send in senior “We don’t just give opportunities to people who have been here for years and have tons of experience. We don’t subscribe to that. We recently had a 27-year-old employee open a new office in Denver.”

CONFERENCE CALL, from page 7

focused on reaching out to that 70 percent. We’ve had a huge success ratio. As for retention, a 14 percent attrition is expected. All of our peers have the same issue, too. Last year, we did a study of people who left over the last three years. We learned the top reasons were:

❚ ❚ They had the wrong manager ❚ ❚ They were in the wrong roles ❚ ❚ They were not being engaged

We’re working on those items.

TZL: What’s the key benefit you give to your employees? Flex schedule, incentive compensation, 401(k), etc.? DA: Our benefits are pretty traditional. We’re not doing things like pet insurance. We provide excellent medical in- surance, generous PTO, dental insurance, and disability. We have healthy profit sharing. For example, a starting employ- ee will typically get an average distribution that equals 20 percent of their salary. That’s not bad for someone who is just starting out. Culture is also important. We’re engaged in the community and staff likes to know that. We have an open culture and we’re accessible and flexible. As CEO, I have no door. I have a glass wall. Anyone can come in at any time. I circulate around a lot and also visit our other of- fices on a regular basis. I ensure that staff has opportuni- ties to grow, too. For example, we don’t just give opportu- nities to people who have been here for years and have tons of experience. We don’t subscribe to that. We recently had a 27-year-old employee open a new office in Denver. “As CEO, I have no door. I have a glass wall. Anyone can come in at any time. I circulate around a lot and also visit our other offices on a regular basis.” TZL: How do you raise capital? DA: We’ve never had to. We’re financially healthy. I hate debt. Every so often we dip into a line of credit, but pay it back right away. Cash is king.

leadership to really understand the local market. 3)M&As. We’ve only done one – it was my firm.

TZL: What’s the role of entrepreneurship in your firm?

DA: There needs to be more of it. Entrepreneurship is em- braced. Right now we have a 32-year-old woman who is put- ting together a business plan to open a new office in Texas. (Entrepreneurship is not a standard genetic of architects, so it’s something that has to be nurtured.)

TZL: What’s the greatest challenge presented by growth?

DA: People, people, people. When you grow, it’s difficult to get to really know everyone. Do I know who has a dog or what their kids’ names are? Probably not. TZL: What’s your prediction for 2017 and for the next five years? DA: CR is celebrating its 35th anniversary this year. I’m bullish on where things are till mid-2019. Then, I think we’ll see a small recession – similar to 1991. Our business mod- el is buffered by being in eight different segments, so when one is down, another is often up. Diversification is key.

THE ZWEIG LETTER June 5, 2017, ISSUE 1203

O P I N I O N

Employee retention is everything Keeping a good team together requires lots of maintenance, great perks and benefits, and the willingness to toss out the bad apples.

I get asked the same question all the time – how do I keep my people engaged and retained and not looking around for the next best thing. Employee retention is one of the biggest issues that firms in the design industry face. Aside from the fact that you are out there pounding the pavement each day looking for new opportunities and new projects, you also have to be mindful of what’s happening back at the office. Here are six key areas to focus on to retain your best people.

Randy Wilburn

1)Culture. The first thing that we try to understand about a potential executive search client is what their company culture is all about. When you un- derstand the culture of a company, it’s a lot easier to sell an opportunity to work with them. Of course, all cultures are not created equal which is why it’s important to take stock of yours and learn how your employees view things. You know what I’m talking about. You’ve visited a company before where things were exciting, attitudes were contagious, and op- portunities seemed endless. Then, there are those firms where you enter the main doors and can’t exit fast enough because the vibe is lifeless. Culture is everything and it usually emanates from the top and works it’s way down from there. Do you have

a handle on this or is your firm ready for a cultural revolution? “Culture is everything and it usually emanates from the top and works it’s way down from there. Do you have a handle on this or is your firm ready for a cultural revolution?” 2)Personal and professional development. If you are not improving yourself, you are dying. At least See RANDY WILBURN, page 10

THE ZWEIG LETTER June 5, 2017, ISSUE 1203

BUSINESS NEWS T.Y. LIN INTERNATIONAL WINS 2017 ACEC HONOR AWARD FOR SELLWOOD BRIDGE REPLACEMENT T.Y. Lin International , a full-service infrastructure consulting firm, announced that the Sellwood Bridge Replacement project in Portland, Oregon, received an Honor Award in the 2017 ACEC Engineering Excellence Awards competition. TYLI served as prime consultant, final design, on the fast-track project, working closely with the project owner, Multnomah County, design subconsultant CH2M, and construction manager/general contractor, Slayden/Sundt Joint Venture. The Sellwood Bridge across the Willamette River opened to traffic on February 29, 2016, replacing a deteriorating fixed span structure built in 1925. The 1,976-foot-long bridge, 1,275 feet of which is a steel deck arch, features three arch spans that support the

63- to 90-foot-wide deck of the main river spans. The new, seismically resilient bridge carries two vehicular lanes, two bike lanes/ emergency shoulders, and two shared-use sidewalks. TYLI also designed the bridge to accommodate future streetcar service. The bridge replacement project also included modernization of the Highway 43 interchange and stabilization of a hillside located west of and above the bridge and interchange. The locally preferred alternative for a steel deck arch, combined with a landslide condition for the west abutment of the bridge, created a unique engineering challenge. The TYLI team developed an advanced solution that combined geotechnical design with a foundation design for the stability needed to found the deck arch against the west hillside. “Few landmark bridge projects, if any, have

dealt with the threat of landslide movement by utilizing a true arch bridge design solution,” said David Goodyear, TYLI senior vice president and chief bridge engineer. “T.Y. Lin International is very pleased that the American Council of Engineering Companies has recognized the Sellwood Bridge as one of the year’s most outstanding engineering accomplishments.” Another significant aspect of the project was the active participation of local communities in every phase of the project. In addition to ensuring that public input was reflected in the final design of the signature bridge, TYLI also reduced the final Sellwood Bridge footprint significantly from early concepts, reducing project costs and minimizing environmental disturbances.

RANDY WILBURN, from page 9

5)Cool office perks. It’s important for firms to be creative with their perks so that they can keep their best employees engaged and focused. I visited with a firm recently that has several vendors come to their office to service the needs of their employees. Two ideas that come to mind are a dry clean- ing service where they pick up and drop off at the office, and a personal chef that provides creative and healthy meals once a week. There are many more ideas like these that you could easily implement. Some will cost you money while others are just conveniences that make life for your employees a little easier. “When you show your employees how much you care you will make it harder for them to up and leave without at least giving you notice and constructive feedback on why they made the decision to go.” 6)Hire and fire. Another way to keep the environment free of any defects, mental or otherwise, is to take your time to hire good people. I’m not suggesting that you take forever. I just think you should know when to pull the trigger on a good candidate and bring them on board. Good employees boost morale and do a lot to keep things moving in the right direc- tion. If you have a bad employee or two – those who are not redeemable – you need to be willing to “cut bait” and move on. The faster you do this the better off you will be. These are just a few of the ways you can boost retention levels at your firm. When you show your employees how much you care you will make it harder for them to up and leave without at least giving you notice and constructive feedback on why they made the decision to go. Which brings me to another point: Always do an exit interview with everyone who leaves. That information can prove to be invaluable. That’s all I have for now. When it comes to recruiting and retention I’m always here if you need help or advice. RANDY WILBURN is director of executive search at Zweig Group. Contact him at rwilburn@zweiggroup.com.

that’s what I think. I know it sounds a little harsh, but the reality is that as individuals and as firms, we need to strive to get better in every way. Firms that recognize this take the time to make sure their employees get the best training for professional development. It’s more than just CEUs. It’s making sure your people learn the latest nuances for their discipline and how to implement them to make the client and project experience better. Personal development is just as important. A study was done by the financial counseling in- dustry that said for every dollar a firm spent to make financial literacy programs available to their employees, they earned a three-dollar return on that investment in greater employee productivity. 3)Flexible work schedule. A lot of firms are starting to get cre- ative with their regular work schedules. For years we’ve seen some companies take half-day Fridays during the summer months and some have made it a year-round offering. A lot of firms are trying out a 9/80 workweek schedule – this is where employees work seven nine-hour days in a two-week period, one eight-hour day, and then receive one “free” day off every other week. The bottom line is that you are trying to be cre- ative for the benefit of your employees without sacrificing the needs of the clients you serve. “Employees are looking for strong benefits programs that include, but are not limited to, retirement programs with matching funds, short-term/long-term disability and life insurance, wellness programs, in addition to cell phones and other tech perks.” 4)Strong benefits. Nowadays, in addition to fulfilling work that makes a difference, employees are looking for strong benefits programs that include, but are not limited to, retire- ment programs with matching funds, short-term/long-term disability and life insurance, wellness programs, in addition to cell phones and other tech perks.

THE ZWEIG LETTER June 5, 2017, ISSUE 1203

O P I N I O N

Flat lining A/E firms with sound risk management may benefit most from a competitive professional liability market, and should take the opportunity to increase coverage.

D esign firms that practice sound risk management, have good loss experience, and maintain what underwriters consider a desirable project mix, stand to benefit most from an increasingly competitive market for A/E professional liability insurance. A recent survey of A/E professional liability insurers reinforced that while they may be more flexible on premium pricing, they maintain adherence to prudent underwriting standards.

Joan DeLorey

As A/E firms plan for their insurance renewals, they should evaluate and consider increasing their coverage limits – not only to meet higher contractual requirements (limits such as $5 million or $10 million are frequently being “A recent survey of A/E professional liability insurers reinforced that while they may be more flexible on premium pricing, they maintain adherence to prudent underwriting standards.”

Ames & Gough’s survey of 19 leading A/E professional liability insurance companies finds 68 percent are planning to keep their rates flat this year, with another 11 percent planning modest rate decreases. These decisions are being influenced by a continued high level of competition and better-than-expected claims experience in the last two years. UPTICK IN LARGE LOSSES. Although claims experience generally has been improving, the potential for large claims still exists. Last year, 53 percent of the insurers surveyed paid a claim of $1 million or higher, including two insurers who reported their largest claim paid was between $5 million and $9.9 million and one insurer with a claim between $10 million and $19 million.

See JOAN DELOREY, page 12

THE ZWEIG LETTER June 5, 2017, ISSUE 1203

JOAN DELOREY, from page 11

A/E professional liability insurance. With an array of in- surers willing to offer competitive terms, it may be an ap- propriate time to test the market and obtain pricing from other insurers. That stated, while it is possible to achieve savings, making such decisions requires careful assess- ment. First, consider the potential benefits of maintaining a long-term partnership with your existing insurer. Those that have a continued relationship with their insured may be more willing to consider further policy enhancements or be more flexible with providing coverage when presented with a claim that falls in a “gray area.” Other key considerations: ❚ ❚ Policy differences. Are there key differences in coverage terms and conditions between your current policy and the proposed new policy? ❚ ❚ Rating formula. What billings are insurers using for rating purposes? Each insurer has its own rating formula (i.e., past- year billings, average or weighted average of billings, etc.), which can have a direct impact on the premium. Depending on the billings used by each insurer, a more competitive pre- mium one year may not have the same result the following year. ❚ ❚ Claims handling. Some insurers have well-developed claims networks and processes, while others may not have the same capabilities (i.e., in-house claims staff versus outsourced to a third party administrator). ❚ ❚ Financial condition and longevity. Be sure to assess the insurer’s financial strength, as well as how long it has been in the A/E marketplace. Don’t overlook claims. If you change insurers, check the new insurance company’s requirements for reporting a claim or circumstance that could evolve into a claim. Work with your broker to report any known claims or circumstances to your incumbent insurer prior to the policy expiration and start of a new policy. “Don’t overlook claims. If you change insurers, check the new insurance company’s requirements for reporting a claim or circumstance that could evolve into a claim.” Even in a soft insurance market, A/E firms need to remain vigilant about their risk management. That’s the best way for A/E firms to take advantage of potential growth opportunities, while protecting against loss and making sure they continue to benefit from current market conditions. JOAN DELOREY is a senior vice president and partner at Ames & Gough. She is based in the firm’s Boston office and can be reached at jdelorey@amesgough.com.

required), but also to make sure their protection is adequate. Despite the large losses, the claims experience of most insurers generally has been stable. For the second consecutive year, 79 percent of the insurers surveyed reported no change in their overall claim activity compared to prior years; in 2016, however, a greater percentage of insurers (21 percent) than in the past saw their claims experience improve and none had worse experience. “Even in a soft insurance market, A/E firms need to remain vigilant about their risk management. That’s the best way for A/E firms to take advantage of potential growth opportunities, while protecting against loss and making sure they continue to benefit from current market conditions.” Still, there are red flags. Nearly one in three insurers reported an increase in claim severity and 37 percent noted an increase in defense costs impacting overall claim payments. Additionally, 42 percent indicated specific project types – single- and multi-family residential, schools, roads/highways (including bodily injury type claims), and parking structures – as the cause for a higher number of claims. Besides factors already contributing to claims, insurers surveyed are keeping a close eye on emerging issues, including: judicial rulings eroding protections for design firms under state statutes, such as economic loss doctrine (79 percent); evolving project delivery methods (e.g., design-build and public-private partnerships), cited by 68 percent; innovation, such as the use of BIM and technology and new construction materials/methods; and international exposures (each at 32 percent). The fact that insurers are monitoring these issues underscores the need for design firms to maintain a sharp focus on risk management. The same applies to potential opportunities to develop and repair the U.S. infrastructure. Asked about underwriting concerns related to this work, 63 percent of the insurers cited the failure of A/E firms to adhere to effective contractual best practices when negotiating new projects. Most (53 percent) also expressed concerns about A/E firms accepting contractual responsibility outside their expertise and 32 percent were wary about the inability of A/E firms to effectively assess and manage subconsultants. KEY TAKEAWAYS IN ASSESSING BUYER’S INSURANCE MARKET. The bot- tom line is that it remains a good time to be a buyer of

TALK TO US Do you have an interesting story to tell? Is your company doing things differently and getting results? Let us know. We’d love to contact you and feature you in an upcoming case study. If interested, please email rmassey@zweiggroup.com.

THE ZWEIG LETTER June 5, 2017, ISSUE 1203

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