Architect payrolls can be brought into better focus by a review of supply-and-demand economics. Without doubt, there is a talent shortage in every major category of the profession, ranging from the short list for architect of the Capitol to healthcare facility architects to cemetery architects (yes, one of hundreds of niches). Greenway Group forecasts increasing demand—not a hockey-stick curve, but a steady, gradual incline—for architects in every building type, each category of professional service, and every leadership position industry-wide.
The pending (or current) economic slide will have little short-term impact (i.e., over the next six months) on most architecture firms, but it will have noticeable midterm impact. Still, most firms will not experience cash-flow difficulty until about six to 12 months from now (based on Greenway interviews), and they will note backlog slippage of around three to four months by year end. Looking forward 24 months, strong practices in healthcare, education, and luxury hospitality will be the most resilient. Average to below-average design organizations will be the most adversely affected by the downturn. This recession-like period appears to be entering markets like a slow-moving fog and will probably exit the same way. Professional practices ought to put in place programs to weather the soft economic conditions. New opportunities will soon arise from this period of uncertainty.
Projections by the Brookings Institution of real-estate development growth in urban areas remind us that, notwithstanding short-term peaks and valleys in the economy, the built environment in the United States ought to experience dramatic growth from now through 2025. This will place a huge responsibility on the shoulders of a relatively small—but not fledgling— architecture profession.DON'T PITY THE INTERNS
Salaries for intern architects have increased, although pay scales vary according to geography and discipline. We define interns as those enrolled in the NCARB Intern Development Program. There are three levels, each representing a year of internship. The most noticeable development is that interns in New York City are now among the better paid in the United States. For a period in the early part of this decade, New York City interns were paid below national averages due to business conditions of firms there and the fact that so many NAAB-accredited architecture school graduates applied to work in New York firms. Supply-and-demand economics lowered intern compensation in New York City then, but not today.
There is another factor giving a bump to U.S. intern salaries, and that is the importation of services. Dozens of foreign-owned firms have moved into New York City and elsewhere in the United States. This has driven up salaries, thanks in part to currency exchange rates: The softening U.S. dollar valuation has had a positive effect on intern salaries in New York; Washington, D.C.; Boston; Seattle; and San Francisco.
How much do intern architects make? The median is $37,803 in year one and $46,495 in year three. Our survey reveals that the top performers can earn more than $70,000 (including overtime) the year prior to taking the Architectural Registration Examination. Immediately upon passing the exam, newly minted architects will see their compensation increase by about 5 percent to 9 percent.MIDCAREER RISKS AND REWARDS
At midcareer, many architects are launching their own firms, and this represents a time of both risk and rewards. There can be significant pay increases, along with a greater burden of responsibility. However, some midcareer professionals get caught in traps that limit their growth and compensation. Some become “CAD monkeys” rather than project leaders, with self-imposed blinders focusing them on project details rather than the big picture. They can become so absorbed in details that they neglect their own career growth and financial success. This happens slowly and invisibly but very easily, especially to young professionals without mentorship. It is the “invisible obvious” in the profession, and it is preventing the rich unfolding of high-achieving leadership talent.
The DesignIntelligence survey for 2008 conducted numerous analyses of midcareer architects along with mature professionals and firm owners. Midcareer architects who own their own firms can earn six figures, and it would not be unusual for an owner of a 200-person firm to receive a bonus equal to his or her salary. (A full examination of executive compensation can be found in the DesignIntelligence report.) A midcareer employee architect, with 10 to 14 years' experience and without an ownership stake in the firm, can expect a median salary of $73,356. Such non-owner architects typically receive an annual bonus of slightly more than 9 percent, to give them a total compensation of $80,178.WHAT THE FUTURE HOLDS
We now know more about real architect compensation than ever before. It is a story filled with promise. Entry-level, midcareer, and senior-level salaries are competitive in the AEC economies of the world. Moreover, architects are increasingly valued, with an acknowledged economic return on investment. The popularity of architecture as a career is not new. But it is accelerating as a respectably paid and satisfying career option. And especially for partner owners, it can be a highly compensated profession.
We expect further growth of salaries and corresponding benefit plans in 2008, fueled by continued public and client interest in the art of architecture; the brand strength of leading firms and their financial muscle; the new attention being paid to how form and space affect health and welfare; and, of course, the creative professional lifestyle that is sought by members of Generation Y (and those of us wishing we were members).
James P. Cramer is chairman and chief executive officer of the Greenway Group and founding editor of DesignIntelligence. He is co-chair of the Design Futures Council and a Fellow of the Western Behavioral Sciences Institute. Cramer has authored or co-authored three books, including How Firms Succeed: A Field Guide to Design Management and The Next Architect: A New Twist on the Future of Design. He is a former executive vice president and chief executive officer of the American Institute of Architects.About the survey
Data presented here is preliminary and may reflect slight differences from the report to be published in DesignIntelligence. A complete, unabridged report on the 2008 compensation and benefits survey from which the article is drawn is published in the March/April issue of DesignIntelligence. It includes salary ranges and medians by region as well as additional data, such as bonuses, projected increases, hours worked, and more. In addition, the March/April issue contains in-depth analyses of emerging trends in recruitment, retention, and employment from leading AEC human resources professionals. To subscribe or purchase single issues of DesignIntelligence, the Design Futures Council's bimonthly report, go to di.net or call (678) 879-0929.