Workplace satisfaction is like a stool, with three legs holding it up: an employee’s relationship with their boss, how fulfilling they find their work and growth opportunities, and their level of satisfaction with their compensation and benefits. If any one of those legs falls short, the stool tips and causes an imbalance in the employee’s workplace satisfaction, which can manifest through burnout or resignation. While AIA’s 2023 Compensation and Benefits Report, released in August, cannot fix a relationship with one’s boss, it can provide a glimpse into what it takes to keep the other legs balanced. To that end, we’ll unpack some of the report’s findings.
Much is reported on the hard numbers in the AIA compensation tables. This year, AIA’s Salary Calculator reveals that the national median base salary (not including additional cash compensation) of architecture firm CEOs and presidents was $165,000 in 2022, while a new graduate had a national median salary of $59,000. The ratio of chief-executive-to-worker pay at architecture firms averages 2.8:1, nowhere near the 186:1 ratio in U.S. corporations, according to an analysis of 278 S&P 500 firms by the Wall Street Journal in 2022. Even for the highest paid CEOs at the largest architect firms (with more than 250 employees), that ratio is 4.6:1. This is not to suggest that these are the salaries that should be paid, merely that the compensation ranges in architecture firms are not as disparate within a firm by position level.
But there’s more to compensation calculations than just base pay. Additional considerations include household expenses. There are four areas of expenses that compensation and benefits need to cover—housing, health care, food and services, and debt. There are various views around the best proportion of income that should go to each of these areas, as well as the amount to set aside for savings and entertainment. Here’s where things get a little complicated.
Where you live matters. We know that expenses in cities across the U.S. vary—housing costs are the most obvious—but other goods and services, such as gas prices and dry-cleaning costs, also vary by location. And indeed, the AIA compensation data reflect those regional differences. For example, a firm CEO in Seattle has a median base salary of $180,000, compared with $150,000 in Philadelphia. Some of that difference is driven by the respective costs of living within those cities, and some employers adjust salaries accordingly; in fact, 61% of architecture firms report that they do so.
The rise of remote work has complicated some of the location pay disparities and is part of a larger trend. For architecture firms, the remote working population is now significantly larger than it was before the pandemic, but the share of firms that offer a fully remote option is relatively small, at only 25%. In comparison, 59% of firms (including 79% of the largest) have employees working remotely multiple days a week. That translates to approximately 69% of the workforce, including 82% of workers at the largest firms, taking advantage of remote working at some level.
Health care and dependent costs aren’t going down anytime soon. One of the most important benefits an employer offers from a bottom-line perspective is health insurance coverage. Even with health insurance, it’s important to map what a firm offers against the needs of your family. For example, do you have children who require childcare or additional services? Do you have elder care costs? Do you require prescription medicine to maintain a chronic condition? Do you need vision, hearing, or mental health coverage? These are important benefit areas to ask a prospective employer about—and to advocate for from a current employer.
According to AIA’s Compensation and Benefits Report, nearly all (97%) architecture firms offer employee health insurance coverage—100% of the largest firms (with more than 50 employees) and 92% of the smallest firms (with fewer than 10 employees). Most firms also provide dependent health coverage (85%) and dental insurance (86%).
Firms are also offering other medical and financial benefits, though it’s mostly larger firms that have more leveraging power (See Figure 1).
For many employees, debt remains a profound and rising concern. Student debt has soared over the past two decades. According to a 2022 report by U.S. News, tuition and fees at private national universities jumped 134% over the last 20 years. However, this increase significantly outpaced the consumer price index inflation, which rose only 65% during the same amount of time (July 2002 to July 2022) according to the U.S. Bureau of Labor Statistics. As a result, new graduates are having debt burdens at levels far outpacing the economy.
Architects and those in the architectural profession are not exempt from that pain. Though debt incurred from a master’s in architecture is, on average, lower than it is for students in dentistry, visual and performing arts, and communications master’s programs, relatively lower salaries translates to graduating architects entering the profession and facing a lifetime of student loan payments, where interest rates are higher than earning increases.
According to a 2022 study commissioned by AIA, younger architects and design professionals have been most burdened by student debt, with 89% of AIA members under 35 reporting taking out loans compared with 60% of those aged 55 to 64. And among those, it’s notable how much harder first-generation college students are being hit, as they don’t have the exposure to or connections with networks that can offer financial advice. AIA’s study shows 78% of first-generation students borrowed money for architecture school expenses, compared to 71% of other students. Some firms are starting to recognize this growing concern for newer graduates in the form of assistance with loan repayment. More firms reported offering this benefit in 2022—with 13% of larger firms (more than 50 employees) providing it, up from 5% in 2020. While this percentage is still small, it is a rising trend and may be a benefit that a firm can cover in lieu of or in addition to a higher base salary.
What does culture have to do with it?
Of course, the other two legs of the stool are as important as the one representing standard of living—the people one works with, as well as present-day work satisfaction and opportunities for future growth. This is the culture piece, and it is essential as compensation for the profession to thrive.
Studies of the architecture profession reveal that it is not exempt from bias in the workplace when it comes to the effects of firm culture on employees of different race, ethnicities, and gender identities. According to the AIA-commissioned 2021 Elephant in the (Well-Designed) Room report from the Center for WorkLife Law at the University of California Hastings College of Law, half of women architectural professionals state that taking family leave hurt their careers, versus only a quarter of men. In addition, fewer women and men of color report access to desirable projects compared to their white male counterparts, and significantly fewer women and men of color report career satisfaction in their work.
Despite gender parity in those graduating from National Architectural Accrediting Board-accredited architecture schools over the last decade, the profession does not reflect the same composition within a firm. AIA’s 2022 Business of Architecture Report reveals that women account for 46% of emerging professionals on the licensure path, 36% of licensed architects, and 23% of principals. Even more drastic was the drop-off for architectural professionals from ethnically diverse demographic groups—they make up 49% of emerging professionals on the licensure path, but only 19% of licensed architects and 18% of firm leaders.
According to AIA’s Guides to Equitable Practice’s Compensation Chapter, firms can employ a number of strategies to help eliminate bias in compensation practices and provide transparency in position descriptions, paths to promotion, and performance review policies. AIA’s two firm-focused studies—the 2022 Business of Architecture Report and the 2023 Compensation & Benefits Report— track some of those practices (Figure 2).
Architects are as affected by societal conditions as any other profession—but we have the advantage of being a relatively small workforce (around 200,000 according to the U.S. Bureau of Labor Statistics) with a mighty economic impact; billings at architecture firms are one of the best predictors of U.S. construction activity, the second highest contributor to GDP. With a relatively small number of enterprises, we can be a profession that fosters high job satisfaction and healthy workplaces. The data can only shine a light on where to start.