In this year of upheaval and change, the most important component of any successful firm remains the same.
2020 has sure been a year of upheaval and change. Like much of the world, the AEC industry has been turned upside down with massive workplace changes, project cancellations, travel restrictions, and other new challenges presented by COVID-19. One thing hasn’t changed – the need for qualified people – the most important component of any successful firm. For the past few years, recruitment and retention has been the number one issue facing firm leaders in the AEC industry – today, it’s second only to concerns about the economy (Zweig Group COVID-19 Survey). At the start of 2020, median staff growth hit 3.6 percent, the highest rate in three years (2020 Financial Performance Survey).
From June 2019 to June 2020, Zweig Group surveyed 103 different firms on their policies, procedures, and benefits. We took this research and combined it with 110 unique organization responses to Zweig Group’s 2020 Best Firms To Work For Program, a process that includes assessment of both corporate policies and metrics as well as employee responses to a survey on experiences, to compile the 2020 Policies, Procedures & Benefits Report of AEC Firms.
With workplace, hiring, and retention on the forefront, human resources expenses have climbed for AEC firms. This survey found total HR spending has climbed over the past 10 years, going from a median of 0.9 percent of NSR in 2010 to 1.7 percent this past year. The likelihood of a firm having at least one full-time person devoted to HR was commensurate with firm size, with 76 percent of firms surveyed reporting at least one full-time person dedicated to human resources. Less than 20 percent of firms with fewer than 25 employees, and just over half of firms with 25 to 49 employees, reported an HR department. For firms without HR departments, many firms rely on their president/CEO or head of finance/admin to handle HR type job duties. Hiring and recruitment often relies heavily on marketing departments.
Recruiting isn’t an easy or cheap task. Last year, firms spent an average of $9,454 on each new hire, even for those who rely heavily on word of mouth (44 percent of respondents report this as their greatest source of new hires). The next most popular method to recruit was listed by only 15 percent of respondents – internet advertising, followed by college recruitment. While I don’t think word of mouth (or email/text/phone call) is going to lose its power anytime soon, I do think we’ll see internet advertising grow in importance very quickly this year.
When asked to rank what factors contribute most to being able to hire successfully, firms most heavily weighted a “good work environment” (4.7/5) followed by interesting projects/unique work (4.2/5). Difficulties in the hiring process are most often due to external factors – firms still state a “lack of qualified candidates” as the top impediment to successful hiring. The hiring environment remains competitive, with firms giving an average of just eight days for a candidate to accept or reject an employment offer.
Even with COVID-19, perhaps even more so, there’s still a talent shortage and a need to move quickly when engaging with a person in the hiring process. AEC firms that are recruiting successfully know it’s necessary to put their best foot forward, because most people don’t expect to negotiate much at this point. Along with the need to move quickly, there is also the need to streamline processes – do you really need two phone interviews, a Skype interview, and in-person panel interview before making a decision?
With more of the AEC industry workforce working from home, turnover rates are only expected to increase over the next year – for both positive and negative reasons. Communication breakdowns, increased stress and pressure, and less streamlined processes are adding to the frustrations of many people in the industry, while the ability to work from anywhere is opening up a new world of non-location specific job opportunities. As a firm owner or leader, it’s very important to pay attention to both of these factors and ensure your workplace (virtual or not) is set up in a way to retain and value key employees. For those who are hiring, geography may be less important for certain job roles and nimble firms may be able to expand workplace flexibility in a way to attract new candidates.
Christina Zweig Niehues is Zweig Group’s director of research and e-commerce. She can be reached at firstname.lastname@example.org.Click here to read this issue of The Zweig Letter.