Deltek Clarity Study: Staffing Changes, Emerging Tech and New Business Growth – Here’s How A&E Firms in the Nordics Are Evolving

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After years of disruption, the architecture and engineering (A&E) industry now emerges into a new era. But while many firms are ready to continue building on the success of their recent digital transformation initiatives, others are slowing down in favour of other opportunities.

Firms in the Nordics are no different, but the region displays its own unique challenges, opportunities and trends. To explore the nuance behind these, the latest Deltek Clarity Architecture & Engineering Industry Study surveyed firms in the region and established benchmarks to help other organisations identify what success looks like.

This blog explores what the findings mean for firms across Denmark, Sweden and Norway. But if you’d like to see the full report to understand the state of the industry throughout the rest of Europe and Asia Pacific, you can download the full report.

Firms make slow, steady and unique progress towards digital goals

In previous years, we’ve seen firms in the Nordic region express interest in technologies deemed less important by firms in other regions. This year is no different.

Two-thirds of survey respondents from the Nordics identify blockchain, Internet of Things (IoT) and data visualisation technologies as important. By comparison, the region downplays the importance of other technologies seen as vital across the rest of Europe: 82% of the sample see data science as important compared to 73% of respondents from the Nordics.

A new revelation from this year’s survey is that the outlook for technology is overall less optimistic in the region. Just 25% of Nordic firms say their digital maturity will be ‘advanced’ in the next five years – the lowest figure of all regions surveyed. But while the Nordics may be more pessimistic than other regions, respondents from all regions report lower levels of digital maturity – especially when anticipating how digitally mature their organisation will be in five years’ time.

Similarly, only 70% of Nordic respondents think investing in technology to improve operations will help them win more business. While that’s a high number, other regions report far greater confidence in the link between digitalisation and attracting new work.

The survey respondents from Denmark, Sweden and Norway are mostly split on the most significant IT operational challenges ahead:

• 35% say implementing new software systems
• 31% say finding top IT talent
• 31% say improving cybersecurity

We see more consensus on potential solutions to these problems, with firms planning to:

• Create new security policies and procedures (49%)
• Consolidate the number of vendors or systems used (48%)
• Build new IT infrastructure (47%)

Ironically, it’s people rather than technologies that could make or break firms’ digital success. 49% of respondents from the Nordics say a lack of employee education will delay technology adoption over the next three years, so it’s clear that hiring and developing the right people will be crucial. But the next major trend shows that firms in the region face an uphill battle here.

Skill shortages impact firms in all regions

Businesses in all industries and regions are struggling to maintain strong talent pipelines in the wake of staffing challenges. A&E firms in the Nordics are no different, with 53% reporting that ‘increasing competition for top talent’ will be a major project management challenge over the next five years. 49% also identify developing the right knowledge and skills as a significant obstacle.

Recruitment and retention challenges impact all areas of the business, with 31% of survey respondents saying that finding IT talent is a top challenge for IT operations today. Similarly, 38% of financial leaders report that finding and retaining qualified staff is a barrier for financial management.

Firm leaders expect to put strategies in place to address these skill gaps:

• 34% intend to hire more qualified staff over the next three years
• 32% are increasing staff headcount
• 31% are investing in better software tools to empower workers

However, there are clear gaps in hiring approaches across the Nordics. For example, less than a third of respondents intend to address project management talent shortages with investment in internal (29%) or external (23%) training.

We see similar opportunities to improve employee retention strategies in the region. When it comes to wellbeing support, for instance, only 64% of Nordic firms have a significantly higher number of initiatives to support employee wellbeing than two years ago. This is much lower than other regions, including the wider European sample (72%) and Asia Pacific (85%).

Growth is the focus, but people and technology are key to driving success

Firm leaders in the Nordics are adopting several strategies to encourage business development, 28% of respondents say they’re focusing on identifying opportunities and requirements earlier, the same number say they want to get better at identifying those opportunities, and the same amount again want to automate time-consuming tasks to become more efficient.

These approaches combine with other financial strategies designed to stimulate growth. The top initiatives to address challenges in the next three years include:

• Improving forecasting (31% in the Nordics versus 27% overall)
• Better managing growth (31% versus 32% overall)
• Training project managers on financial management (31% versus 27% overall)

Challenges await on the path to growth though. 36% of survey respondents in the Nordics say identifying new prospects is a major challenge, while 34% identify increased competition as a major obstacle.

And the IT challenges firms face only exaggerate the problem, with just under half of firms (49%) saying they have lost potential business to competitors that use more advanced technologies.

Firms are tracking a range of KPIs to ensure they’re on track to grow while overcoming their challenges. Respondents from the Nordics prioritise KPIs including:

• Average profit on revenue (21% across the Nordics and the overall sample group)
• Average overhead rate (88% in the Nordics versus 86% overall)
• Average utilization rate (47% in the Nordics versus 49% overall)

Many other challenges – and opportunities – await A&E firms

As firms emerge into a new era of emerging technologies and changing workforce trends, new challenges and opportunities await in equal measure. This blog has touched on some of the most pressing trends facing firms across Sweden, Norway and Denmark, but the full Deltek Clarity A&E Industry Study also explores:

• Firms’ financial and business development challenges in detail
• Full benchmarking details so you can compare your firm against your peers’
• Digital maturity across firms, and the technologies leaders deem most important

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