AEC firms face a middle management gap, but technology can empower PMs, boost efficiency, and accelerate talent development.
The AEC industry has been quietly dealing with a structural challenge for more than a decade: A middle management gap. The roots of the issue go back to the Great Recession of 2008. Starting that year, there was an exodus of talent from the AEC industry, particularly among architects. Over only four years, the number of employees at engineering firms declined by more than 10 percent – a big drop. However, for architecture firms, the decline was an astounding 30 percent.
The impact is visible in the chart below, where employment across architectural services and engineering services is indexed to 2003.
Young professionals in the industry were hit particularly hard. Many left the industry and never returned. While many firms have healthy senior leadership at the top and plenty of talent from those early in their careers, there aren’t enough experienced project managers, project architects, project engineers, studio leaders, and other mid-level staff.
(The chart shows that while employment in engineering recovered and surpassed 2008 levels, employment in architecture has never fully recovered. It’s a deeper challenge for discussion in a different article.)
This “hourglass” shaped tenure structure puts pressure on firms and their employees – there’s an insufficient bridge between vision and execution.
For firms to be successful, they need to find ways of making sure their PMs are as efficient, productive, and supported (retention!) as possible. They need the right business technology – not to replace PMs, but to empower them. Here are three ways technology can help:
1. Clear the fog with real-time project visibility. Many PMs are operating with limited visibility for too much of the project lifecycle. Key data about budgets, staffing, and performance may sit in disconnected systems and/or arrive via Excel sheets weeks after the fact. Or, firm owners may be hesitant to share important project-level financial information with PMs. This lack of transparency makes it more difficult for PMs to deliver effectively. It also might lead them to be less engaged or feel true ownership of the outcomes.
Empowering PMs with complete, real-time data enables them to catch issues and course-correct early, preventing projects going off the rails. This is critical to the success of any individual project and ultimately the firm.
Modern firm management platforms give PMs real-time visibility into their projects. Dashboards update automatically as timecards and expenses are submitted/approved, and as invoices are sent and paid. Instead of chasing data, PMs can spend their time analyzing and acting on it. The result is more projects delivered on-time and on-budget, and a better client experience.
2. Turn PMs into mini-CFOs with integrated financial management. Most architects and engineers don’t have financial backgrounds. There’s a common trope I hear: “There was no business class during school.” However, PMs in the space are often expected to manage substantial project budgets and drive real financial results. Technology can help bridge the gap.
Integrated financial/project management systems can translate complex financials into PM-friendly dashboards. PMs can quickly see burn rates, earned value, budget variances, and profitability forecasts in plain language.
By simplifying financial oversight, technology allows PMs to think like mini-CFOs for their projects, even if they never took an accounting class.
3. Minimize the morass by automating the admin. Hours can disappear as PMs get stuck in administrative quicksand. Chasing timesheets, cobbling together status updates, pulling together invoices; the time adds up.
Workflow automation can take a large percentage of this burden off PMs. For example:
- Alerting them when projects are going over contract or budget
- Enabling project progress and time/expenses data to flow seamlessly into invoices
- Flagging clients behind on payments
- Making staffing recommendations for projects
And AI enhancements will drive even greater efficiencies.
The effect: PMs get back dozens of hours per month that they can reinvest into delivering great projects and supporting more junior staff.
4. Bonus: Upskilling the next generation. While the “hourglass” tenure phenomenon can be improved by empowering PMs, there is another opportunity: accelerating the career development of junior staff.
Firm culture, professional development programs, etc. are essential elements to deliver new skills to junior employees. But technology is an often-overlooked tool that supports development. Learning can be faster when junior staff can eliminate admin time through automation, when they have enough context and information, and when they are supported by strong technology-buttressed processes.
Success for AEC firms will increasingly be defined by not just who has the most talent, but who can leverage that talent most effectively. Especially for an industry still seeing demographic impacts from the Great Recession, business technology is not a nice-to-have. Technology fosters the success and development of today’s junior/midlevel staff and tomorrow’s firm and industry leaders.
Matt Cooper is CEO of BQE Software, Inc. Connect with him on LinkedIn.