If your retention strategy relies on appreciation events instead of competitive pay, you are already losing talent.
It has become something of a workplace trope: instead of meaningful raises, employers announce a pizza party. Sometimes it is framed as appreciation. Other times it is framed as culture. But the message employees often hear is the same: we value you, but not enough to pay you more.
For those of us approaching mid-career, this is no longer a quirky running joke. It is an eye roll, a quiet frustration, and, eventually, a LinkedIn job search. And while the “pizza party” example may feel exaggerated, it reflects a very real disconnect between what employers believe retains talent and what actually does.
The truth is simple. If you want your employees to stay, you need to pay them competitively. Not symbolically. Not eventually. Now.
The data supports this as well. Mid-career professionals in the four- to 10-year experience range are among the most in-demand and hardest-to-replace segments in the AEC talent market. If it is difficult to recruit this group, it makes even more sense to focus on retaining them.
Loyalty used to pay
For much of the 20th century, companies retained employees through a predictable formula. Compensation grew steadily. Promotions came with tenure. Benefits were structured to reward commitment. Pensions were a major part of that equation. Employees who stayed loyal were rewarded not only with stability, but with long-term retirement security.
That model has largely faded.
Defined benefit pensions have steadily declined across the private sector, replaced by defined contribution plans such as 401(k)s. A 401(k) is portable and flexible, which is not inherently a bad thing. But it also removes one of the strongest incentives employees once had to stay. When retirement benefits are no longer tied to tenure, people become more willing to pursue new opportunities.
The workplace changed. The workforce adapted.
Switching jobs often pays more than staying
As a recruiter, one of the most consistent patterns I see is that employees often earn significantly more by changing companies than by staying long-term. That is not because people are disloyal. It is because internal compensation systems often move slower than the market.
Many firms still operate on rigid pay bands, incremental annual increases, and promotion timelines that do not reflect real-time labor conditions. Meanwhile, external hiring markets adjust constantly. Companies competing for talent price roles based on demand, not internal precedent.
This creates a gap. Employees notice it. And they respond rationally.
Study after study have repeatedly shown that job switchers tend to experience higher wage growth than job stayers, even though the size of that gap fluctuates depending on the strength of the labor market. When hiring demand is high, the “switching premium” grows. When hiring cools, it narrows. But the underlying reality remains: external moves often produce faster pay growth than internal loyalty.
If your employees are financially incentivized to leave, eventually they will.
Culture does not replace compensation
Compensation is not just a financial issue. It is also an emotional one.
Employers often lean heavily on language about culture, loyalty, and being a “family.” Those values can matter, but employees can tell when the messaging is not backed by reality. When times are good, firms speak warmly about teamwork and community. But when times get tough, layoffs come quickly, benefits shrink quietly, and raises freeze without transparency.
The result is cynicism. Employees begin to see “culture” language as branding, not truth.
Pizza parties do not build loyalty. Fair compensation does.
The AEC industry is not immune
AEC firms often assume retention will happen naturally because the work is meaningful, the firm has a strong reputation, or people “grow up” inside the organization. In some cases, that is still true. But the industry is also facing an increasingly competitive talent environment, particularly in specialized technical markets.
The demand for experienced engineers, architects, and project managers remains high. Compensation is rising accordingly, especially in high-growth sectors like data centers, semiconductors, and advanced manufacturing. Candidates know this. They share information. They compare offers. And they are increasingly willing to move.
At the same time, the AEC industry has seen a surge in mergers and acquisitions. While M&A can create growth opportunities, it can also create instability. Employees worry about cultural shifts, leadership changes, and whether their role will look the same a year from now.
When uncertainty increases, people become more open to exploring options. And if compensation is not strong, they leave even faster.
Retention is not complicated
If your firm is struggling with retention, the solution is rarely another team-building activity.
It is not another branded hoodie. It is not another vague speech about “culture.” It is pay. It is transparency. It is strategic alignment.
More specifically, it is compensation aligned with the market and aligned with employee expectations. If your employees can leave and make 15% to 25% more elsewhere, many eventually will. And if you only adjust pay after someone resigns, you have already communicated that compensation is reactive, not intentional.
In the webinar “Compensation Planning that Drives AEC Growth,” Jeremy Clarke and Kristi Weierbach highlighted a truth many firm leaders recognize but do not always address directly: AEC firms often compensate reactively. In other words, pay adjustments happen only after someone receives an outside offer, resigns, or becomes a flight risk.
This leads to rushed decisions, inflated counteroffers, and overpaying new hires, while high-performing internal employees remain undercompensated and disengaged.
You will pay one way or another. The question is whether you want to pay proactively, or through turnover, disruption, and preventable frustration.
Ownership changes behavior
One retention model worth highlighting is employee ownership. Firms that embrace ESOP structures often see stronger long-term commitment, particularly during periods of market disruption.
According to an article by Aegis Trust, median tenure was 5.2 years for employee-owners compared to 3.4 years for non-employee owners. During the Great Resignation, this advantage became even more pronounced. A survey by the National Center for Employee Ownership found that 80% of ESOP leaders reported a stronger ability to retain and recruit employees compared to their non-ESOP competitors.
This aligns with what many AEC leaders have observed firsthand. Employee ownership creates deeper buy-in, long-term commitment, and a stronger sense of shared purpose.
As Brad Nelson, a director of strategic growth with Stambaugh Ness, said: “Nobody washes a rental car.” Ownership changes behavior.
Benefits still matter (but only when they are real)
Compensation is not the only retention lever. Benefits can play a major role, particularly when they improve quality of life. Flexible work arrangements, strong PTO policies, professional development, and transparent promotion paths all matter.
But benefits are not a substitute for competitive pay. They are a complement.
A strong PTO policy does not pay a mortgage. A hybrid schedule does not replace retirement savings. And no one stays at a firm long-term because they get free pizza twice a year.
The bottom line
Companies want to make money. Employees in 2026 are no different.
That is not greed. It is reality. People are navigating inflation, housing costs, childcare expenses, and long-term retirement uncertainty. They are trying to build stable lives in an unstable economy. If your organization does not acknowledge those pressures through compensation, employees will assume you are either out of touch or unwilling to invest in them.
If you want to retain talent, the solution is not complicated. Pay them. Not with pizza. Not with slogans. Not with vague promises of future growth. With compensation that reflects their value today.
If retention is becoming a challenge, it may be time for a more intentional approach. Zweig Group’s Talent consulting team helps AEC firms align compensation, recruiting, career pathing, and employee experience with today’s market realities – so you can move from reactive counteroffers to proactive workforce strategy. Let’s talk about how to turn your people into a true competitive advantage. Learn more about Zweig Group's Talent consulting here!
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Daryl Simons Jr. is a senior talent consultant at Zweig Group. Contact him at dsimons@zweiggroup.com. |
