The Greatest HR Challenges Facing AE Firms Today and Tomorrow

Posted by Amy Champigny on August 15, 2019

HR looking at graphs and discussing challenges

Finding, attracting and securing top talent is just the beginning. To successfully build and grow a high performance workforce, organizations must also focus on key post-hire challenges, such as effective performance management, training and development. Employee turnover rates continue to rise in the architecture and engineering industry, fewer than 50% of responding firms have formal succession plans in place, and HR challenges are affecting all areas of the business including financial performance and project management.

More than 700 firms participated in the 40th Annual Deltek Clarity Architecture & Engineering Industry Report, sharing their biggest challenges and initiatives.

The top three Talent Acquisition challenges identified this year include:

  1. The availability of good candidates in the marketplace
  2. The ability to offer competitive compensation to candidates
  3. Matching qualified candidates to open positions

graph of talent acquisition challenges


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Qualified Candidates are Scarce

If there is one thing we know for sure, it is that qualified talent is hard to find. This is especially true when your firm finds itself short on talent with highly specialized skills. If you manage to find that great candidate, they are probably being courted by one or two other firms and will be able to choose between multiple competing offers. You need to be able to find the candidate, but more importantly, you must convince them that your offer is the offer to accept.

Building relationships with prospective candidates earlier pays off when a candidate feels an affiliation with your firm before you even extend an offer. Leveraging Candidate Relationship Management tools to deepen your talent pipeline will have a significant impact on your ability to find, attract and secure top candidates by helping you to create the talent pipeline you need.

Benchmarking Compensation Packages is a Must

Variations in pay and benefits can be the difference between securing the talent you want, keeping the talent you have, and losing out to your competition. Offering competitive compensation was once again identified as a top challenge when it comes to acquiring top talent, but don’t forget how important appropriate compensation is to retaining existing talent. If you haven’t benchmarked your compensation packages against the industry and similar roles lately, it is a good time to check in. Make sure you have all the data points you need heading into the upcoming budgeting season.

The Right Fit for Open Positions

Matching candidates to open positions continues to challenge firms in the AE industry. This challenge speaks to both the scarcity of qualified candidates and finding a candidate that will fit into the open position. These two tightly linked challenges can affect productivity, utilization and your firms’ success rates when it comes to delivering projects on time and under budget. The fact that this has been identified as one of the top three Talent Acquisition challenges speaks to the effort more and more firms are making to build a strong culture. Fit is important and integral to team dynamics and ultimately, project delivery.

In the world of Human Capital Management (HCM) there are two sides to the coin. Firms work hard to find, attract and secure great candidates, but if they are not able to offer the right post-hire support, those hard won candidates may move on way too soon. The top three HR Management challenges identified this year were:

  1. Succession and career development planning
  2. Employee engagement/experience
  3. Performance Management

top challenges for managing talent

Succession and Career Development Planning may be your Talent Retention Weapon

If there is one thing the results of this year’s Clarity survey showed us, it is that firms can no longer assume they will be able to hire themselves out of a skills shortage. If we accept that fact, then it becomes painfully obvious that firms need to support their existing workforce and plan for the future from within. Only 45% of firms state that they currently have a succession plan. What is not clear is the nature of those plans. Are firms actively managing their succession plans and preparing the employees identified as successors? Too often succession plans live in the minds of a manager or two. They are neither strategic nor comprehensive and they aren’t regularly assessed.

You may not always be able to tell an employee that they have been identified as a potential successor, but by working with them to create a development plan you can show the employee that the firm is willing to invest in them and their future. That is often enough to keep talent with your firm longer. If you are actively creating and executing development plans with your employees, this is definitely something you should consider including in your employer brand message. Only 30% of firms state that they currently have development plans in place. This is an excellent way to differentiate your firm in a tight talent market.

Prioritizing a Balanced Employee Experience

A new emphasis has been placed on the employee experience. At face value, this may seem like a one-sided transaction, but a balanced employee experience offers a significant return on your investment. The modern workforce isn’t asking for a cushy job, rather they are looking for a place to find meaning, mutual values, and a supportive environment that fosters growth. Think of it this way, employee engagement drives the employee experience in part. It includes every interaction and impression an employee has of and with your firm, starting the first time they interact with your job requisition and employer brand.

What’s in it for the firm? In short, increased productivity, improved profitability, more satisfied customers, and greater loyalty. Prioritizing employee engagement and a balanced employee experience is one way your human capital management strategy can directly impact all other parts of the business.

Modernizing Performance Management

Managing the performance of your workforce is deceptively complex, which is partly why it was identified as one of the top three HR Management challenges by so many firms. What is it that makes a performance management practice more successful than another option? One of the most important things to consider when reviewing your existing performance management practices, is whether they align with the way your organization works. Relying exclusively on annual performance reviews that require a considerable amount of manual effort may result in many missed opportunities to drive continuous improvement. Shorter performance cycles formalize continuous improvement and help employees to carry forward lessons learned from one project to the next, more rapidly developing the skills and competencies your firm needs in the workforce.

When identifying the right human capital management initiatives for your business, it’s key to make sure they align with your top challenges. When your people are truly your greatest asset, strategic talent acquisition and retention can become key competitive differentiators. The right talent thoughtfully engaged and developed can set your firm on the path toward lasting greatness.

Take an in-depth look at key challenges, bright spots and future trends in relation to Human Capital Management in the Deltek Clarity A&E Industry Deep Dive: Human Capital Management webcast.


About the Author

Amy Champigny, is part of Deltek's Product Marketing team and works with government contractors, architecture & engineering firms, and consulting firms around the world to help them improve their business processes through technology and thought leadership with resources like Deltek Clarity and Deltek's leading project-based software solutions.