MORE AND MORE, as architecture commands ever higher visibility, architects at all levels are finding that the profession can pay well and offer wealth-generating business opportunities, too. Entry-level and midcareer professionals are increasingly respectably paid. And firm owners on the whole are doing very well—especially those with entrepreneurial flair.
Every year, the Greenway Group, a management consultancy, conducts comprehensive research and analysis to track trends in salaries, benefits, and executive compensation at architecture firms nationwide. This survey is conducted in January and February and published in the March/April issue of DesignIntelligence. This year's research includes data from 135 firms with more than 250 office locations that, together, employ more than 17,000 people. The research and analysis staff at Greenway slices and dices the information to create digestible data that can be used for career and business planning.
As an increasing number of consumer publications and other outlets enhance their coverage of architecture and design, architects have become media darlings, both for their artistic solutions and especially now for their capacity to improve communities and the environment. Appreciation for architectural design as a career remains high, with the American public consistently ranking architecture as one of the most prestigious occupations. Appreciation is growing too for the profession's expertise in human health, safety, and welfare, as collective awareness of these issues grows in the face of environmental degradation and uncertainty across the globe. In this context, the architect plays an increasingly important role.
THE SCRAMBLE FOR (NOT JUST DESIGN) TALENT There are at least two reasons why architects are better paid than in the past: a talent shortage and performance improvement. Evidence of the talent shortage has been revealed repeatedly in AIA Large Firm Roundtable discussions as well as in meetings of the Design Futures Council executive board.
Even as the economy softens, architects' client base is broader geographically, more generous monetarily, and hungrier for real design talent. Notwithstanding frequent downward pressure on architects' fees, the Greenway Group's research reveals that project fees for almost all building types are fair, as are firm profits. It is not unusual for a private practice to achieve a pretax, pre–bonus-distribution profit of 13.5 percent, and for top-performing firms to reach beyond 18 percent. There is even an upper stratum of consistent performance above 25 percent. There are exceptions, of course—and sometimes these get the loudest complaints at professional meetings—but scrutiny of project after project and firm after firm tells a story of healthy client-to-architect business and professional relationships. The dynamic economy does not ignore the importance of design talent; in fact, the situation is just the opposite.
Additionally, professional practices today tend to be much better managed and better led than they used to be. The culture of architecture firms increasingly (yet not consistently) leans toward high performance. Because many firms aspire to be top performers in the industry, firm leaders now often emphasize communication skills, maturity, managerial judgment, and collaboration, not just design skills.
According to the Greenway Group's LEAP diagnostic (a cultural analysis of leadership, empowerment, accountability, and processes), it is not unusual for a surveyed firm to perform at best-in-class levels in four to six of 14 standardized assessment categories. This best-of-class status puts them in the company of the top 15 percent of all firms. What this means in terms of architects' compensation is that there is a noticeable increase in meritocratic rewards, and less patience with lower-performing staff. Lower-performing staff (sometimes referred to as “sliders” or “designosaurs”) do not fit for the long term in firms that are moving forward. And forward is where the profession is going: According to one recent study by DesignIntelligence, the productivity of surveyed firms will have increased 100 percent between 1999 and 2009.
Yes, there are leading corporate and star architects who can and do make more than $2 million, or 1 million pounds, or, for that matter, 7 million yuan. But what is more common is for architects to find a professional practice role that brings admirable compensation and a sense of fairness. Of course, architects can play the pauper if they choose to, but, frankly, this stance represents a self-limiting belief system.
Some architects will find themselves at the low end of the scale, including those who teach architecture in the academy, those with relatively low-level government positions, and those who work in less-than-successful practices. Naturally, architects in the lower quartile—indeed, in the lower half of the profession—are more vocal and less satisfied with their status than their peers are.
RECESSION RAISES: EXPLAINING THE PARADOX Pay hikes look likely this year, even though perhaps 24 percent of firms will likely reduce staff due to economic pressures and due to improved performance arising from technology and better project management systems. Savvy firms strategically downsize staff in order to stay financially healthy as the economy softens; however, these firms are likely to keep compensation packages strong for the retained talent. The old industry standard of $110,000 of revenue per full-time equivalent (FTE) is history. Productivity is now approaching $130,000 per FTE and is much higher in successful firms. Correspondingly, staff in these organizations are also earning more.