Industry publication, December 2001

NYC 9/11 Public Portal Document

Compensation DESIGN FIRM BILLING RATES BY JOB TITLE DESIGN FIRM MANAGER SALARIES, Job TITLE Average HOURLY BiLUNGRATE

BONUSES AND BILLING RATES RISE Principal Associate $138 i 114 ARCHITECTS, ENGINEERS AND ENVIRON- In the immediate future, demand for Project Manager 188 mental firms are facing new management managers will depend less on what the Project Architect 93 challenges in the face of an uncertain manager does than what market he or Project Engineer 91 I market. Two recent surveys show that she has worked in, says William Fanning, Architect 82 design firm billing rates have not kept director of research for PSMJ/Resources pace with manager salaries and firms now Inc., a Newton, Mass.-based manage­ Senior Engineer 92 must take stock of their businesses. ment consulting firm. ‘Tor firms in hot Engineer 74 t Over the past four years, base salaries markets, the demand for managers is nAoifllUU* uesi^iei 73 for most top managerial positions rose pretty universal,” he says. “But if you’re i Senior Drafisr 66 dramatically, accord­ ________________ in a market where Drafter 55 ing to a survey of the work has gone management com­ — away, marketing Spec Writer 82 pensation by Zweig- White, a Natick, “Bonuses and base managers increase in importance.” Estimator SfinrBK FffiUZRsBOQitBB Ins. 77

Mass.-based man­ agement consultant salaries continue to For many design firms, a slower mar­ level oversight of project pricing. and management recruitment firm. increase”,for all # ket may force a re- examination of their This has led to an increase in demand among design firms for an overall top “Bonuses and base salaries continue to managerial jobs.B financial manage- ment. A recent sur- manager. “More firms are looking for a chief operating officer, the type of per- increase for all man­ ----------- ----------------- — vey of design firm son who can run all aspects of the busi- agerial classifica­ fees and pricing by ness,” says Peart, “This is not new to the tions,” says Laura Rothman, managing PSMJ/Resources shows that design firms industry, but many design firms have editor of surveys for ZweigWhite. She enjoyed general increases in billing resisted the idea of becoming too cor- suspects that a construction downturn rates, but the increases were not dramat- porate.” But the COO concept is catching won’t have an immediate impact on com- ic. Hourly billing rates rose 5.3% in the on, she says. pensation. “Most of the firms I’ve talked pastyear, with rates for some design firm Some recent management changes to recently say work is not falling off,” she positions increasing as much as 13%. are being driven by clients. “Design firms says. But some are concerned about design increasingly are organizing their busi- rr managers were the biggest winners, firm billing rates. “You’re supposed to ness to have coherent project teams to with increases in base salary serve throughout the life of 36% and increases in bo­ of the project,” says Corey nuses of 100% between 1998 DESIGN FIRM MANAGERS’ COMPENSATION N. Hassen, a senior consul­ and 2001, according to the MEDIAN MEDIAN AVERAGE tant in the engineering and survey. “Design firms have BASE SALARY BONUS BONUS architectural services group invested so much in hard­ Tire (S) (S) (S) for FMI Inc., a Raleigh, ware and software that they N.C.-based management have become dependent on Principal 116,886 38,080 84,269 consultant. Clients are technology,” says Carolyn Satellite Office Manager 165,666 7,500 21,841 demanding project-based Richman Peart, vice presi­ teams, rather than moving Tsp Financial Manager 77,000 6,000 13,123 people in and out during i 1 dent at Cook Associates, a ! i Chicago-based manage­ Project Manager 75,686 5,000 14,666 different stages of a project, ment recruitment firm. “So Marketing Director 75,686 4,500 14,469 to provide smoother com­ rr managers are no longer munication, he says. looked at as technicians, IT Manager 68,668 4,000 7,933 Design firms increasing­ but as managers critical to a Human Resources Manager 58,566 3,250 5,849 ly are using contract labor firm’s success.” Sum: Gumpematiiii Sum} in place of new hires. “We Other managers that have see firms creating relation- seen dramatic salary growth over the raise prices when demand is high, but ships with individuals with special exper- past four years are; top financial man- fees have been rising only a little above tise as joint-venture partners,” says Peart. agers, up 39%; satellite office managers, the inflation rate,” says PSMJ’s Fanning. These individuals often are included as up 24%; and project managers, up 21%, He says that firms should concentrate on part of the team during presentations, according to the survey. But financial value pricing, or “smart pricing,” as he she says. Hessen agrees. ‘The whole busi- managers had the lowest growth rate in terms it. “Too often, you have project ness of buying up smaller firms is drying bonuses, up 20%, compared to market- managers pricing a job based on past up,” he says. So some firms are using ing directors, who have seen their medi- jobs that were somewhat similar for contract labor as a way to add new exper- an bonuses triple, and project managers, clients that were somewhat similar,” Fan- tise without adding to overhead, □ whose bonuses doubled, ning says that there should be more top- By Gary J. Tulacz

DECEMBER 3, 2001/ENR 13

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