Benefits and Work Environment Matter
Innovative, comprehensive benefits packages are key if firms want to retain high-quality design professionals and maximize their employees' potential. Most firms included in the 2007–2008 survey pay 100 percent of the cost of medical coverage for employees; 80 percent and 75 percent are the next most common levels of medical coverage. Beyond promoting healthy lifestyles with fitness subsidies and flexible spending accounts, some firms try to meet the changing needs of today's professionals with support for paternity leave and with day-care subsidies.
The most competitive firms rely on employees who are working at the top of their game. By offering education reimbursement, they ensure that staff will bring fresh, informed perspectives to challenge existing paradigms, leading to true firm differentiation. Association dues and education reimbursement are important parts of a valued benefits program.
For keeping staff happy, healthy, and productive, a collegiate, attractive environment can do as much as a good benefits plan. Well-designed office spaces have been proven to increase retention and decrease absenteeism. Likewise, an atmosphere of professional integrity and communication is a major draw for design professionals. Health-minded benefits combined with a positive environment and a healthy perspective toward emerging trends will help a practice become dedicated, vibrant, and relevant, and push it into the best-practice zone.
However, a pressing concern for management and architects alike is the rising cost of health care coverage. Employer costs for health insurance premiums have risen 6.5 percent to 8.4 percent in the last year, according to Kaiser Family Foundation reports and Greenway Group consulting analyses. This means that firms have less to distribute in real wage increases to staff.
... But Size Doesn't
Conventional wisdom might suggest that the larger the firm, the higher the base salary and larger the bonuses. But this is seldom the case. Firms of all sizes with strong brand reputations can (and in some cases do) pay their equity partners in the high six figures, but firms are increasingly weighing a profit-per-partner metric as a measure of performance.
There is no data to support the position taken by some practice management theorists that midsize firms are losing their performance edge, nor that they are categorically underpaying their professional staff. Equity partners at midsize firms often earn salaries comparable with their large-firm counterparts, and overall data indicates that well-managed firms of all sizes can flourish in contemporary practice.
Without a doubt, globalization and technological innovations are a boon to North American architectural practices of all sizes and their employees. The devaluation of the dollar has made reverse outsourcing attractive—for reasonable fees, overseas clients can contract with highly attractive design brands. Technological advances are improving productivity. Although some employee positions are threatened, most firms in our survey believe that the practice of architecture will grow. And salaries for talented creative professionals will see continued, healthy growth. (Whether increases reliably outpace inflation depends on productivity.)
Our research suggests that architects—and other designers within firms—believe they are appropriately compensated. Pay is generally not the reason why firms lose employees. Instead, a perceived lack of respect or civility in the workplace, the absence of meaningful assignments, and lack of challenging growth opportunities cause turnover.
Most equity principals and nonequity principals are “significantly satisfied” with base and bonus compensation and do not expect them to change dramatically over the next several years. This trend indicates cautious optimism about the short- to midterm economy and a general confidence and satisfaction regarding the profession's future.