Top Talent Takeaways from the 2023 Architecture and Engineering Clarity Study

Today’s architecture and engineering (A&E) firms have much to contend with – careful planning, diligent resource management and balancing client expectations are all mainstays of the job. As your team faces the ongoing realities of running your business, questions often arise regarding how you might rank within your industry. Are similar organizations feeling the same economic effects? Are they approaching opportunities and challenges in the way you are? Importantly – are you adequately pacing alongside your peers? To answer these questions, a savvy business will need to have access to relevant, industry-specific research and insights. Luckily, Deltek has done the heavy lifting for you, courtesy of this year’s Deltek Clarity Architecture & Engineering Industry Study.

In its 44th year, Deltek’ s Clarity Study continues to deliver key findings A&E organizations consistently use to benchmark themselves against their peers. The report contains comprehensive information on market conditions, industry perspectives and the key performance indicators that practitioners in your industry are tracking today. This year’s study included responses from 583 participating firms and is broken down across several areas of focus, such as Business Development, Project Management, Technology Trends, and of course – Human Capital Management.

Since business strategy cannot be successful without lockstep alignment to the people who are required to get the job done, Deltek’s Clarity survey digs deep into this arena – delivering a clear view of how A&E firms are approaching HR and workforce management today. By focusing on the distinct demands and opportunities that A&E firms have faced in the past fiscal year, the information captured in this year’s report will surely resonate as you consider your own organization, as well as your business and human capital goals for the year ahead.

HCM Trends for Architecture & Engineering Firms

This year’s A&E report gave us tremendous insight into the perspectives of firms today. With record gains in operating profits and a general increase in opportunities and demand, 2022 was overall a good year for firms. With this positive momentum, surveyed firms reported staff growth of approximately 7% (which is double the growth tracked within last year’s survey), and large firms (those comprised of 251+ employees) reported the highest growth at approximately 10%.

Even with this positive growth, the labor market challenges that have been seen across industries are of course also being felt by A&E firms. Turnover rates amongst participants sat at around 14% in 2022, a number that has risen steadily since the beginning of the Covid-19 pandemic, with smaller firms seeing the highest turnover increase. The takeaway here becomes that even with solid growth and momentum, efforts must not be solely focused on acquiring new talent – sustainable engagement and retention practices are also critical to ensure employees are happy and that organizations have the labor available to meet increased demand.

As firms looked to grow headcount in 2022, the availability of good candidates was cited as the top acquisition challenge amongst A&E respondents at 90%, with the ability to offer competitive compensation and match qualified candidates to positions taking the 2nd and 3rd spots respectively. With acquisition coming in as the most expensive talent process to manage for 85% of surveyed firms, as well as ongoing challenges of converting qualified candidates into employees, A&E businesses must do all they can to compete in a booming industry – and that includes leveraging the best insights, tools and strategy to win the war for in-demand talent.

In a bid to offset these acquisition challenges, many firms are increasingly focusing their efforts on retention strategies. Amongst surveyed A&E project-based businesses, this year’s top talent management initiatives included focusing on career development and succession planning, performance management, and improved employee experiences. While these initiatives are of top focus, many firms may be starting from the ground floor to get their programs going.

As an example, this year’s survey found that only 27% of A&E firms have a formal career development program in place, and 40% have a succession planning program (with the majority targeting only current and next-in-line leaders). Project-based businesses would be wise to focus on utilizing talent platforms and automations to help make these initiatives a reality, streamlining the process and taking the burden off those who might be manually managing such labor-intensive processes.

For architecture and engineering firms, the expectations of the modern workforce and requirements to keep pace with market challenges show no signs of slowing. While no two organizations are the same, a nuanced understanding of your industry’s performance coupled with solutions tailored to your project-based business can go a long way to align your talent strategy with business and market needs. Find out more about the top priorities your peers are focusing on and the state of the A&E industry by downloading the full Clarity Architecture & Engineering Report.