ASHRAE Journal - February 2015 - 44
TECHNICAL FEATURE
Engineers' Pay and
Financial Performance
BY KATE ALLEN, P.E.
Has the economy improved for the A/E industry as predicted last year, and if so, will
it be enough to allow firms to attract and retain key employees? Another year has
passed, and it's time to once again use benchmarking data as a window into the overall financial condition of the A/E industry and its impact on compensation.
First, let's go back to our findings from last year to get
started. In the February 2014 issue of ASHRAE Journal, the
article "Pay for Engineers in the A/E Industry-Still on the
Road to Recovery?" presented a discussion on cash compensation as it related to the overall financial health of the
A/E industry, following the economic downturn of 2009.
The intent of the article was to help both the engineer
and the employer better understand the current financial
position of the industry and how that was impacting compensation options, using A/E industry-specific benchmarking data. The benchmarking data revealed that net
revenues were rising slightly faster than expenses, and
while overall profitability as a percentage of net revenues
had improved (to a median of 11.4%), it still remained
significantly below the 2007 high of 15.2% (median). The
connection between base compensation and billing rates,
as evidenced by target and achieved direct labor multipliers, of 3.10 and 3.02 respectively, was discussed as well,
with emphasis on the impact of pricing (fees) and project
management on overall profitability. The industry was
improving but had not fully recovered from the recession in terms of profits and compensation rates. Overall,
it appeared the A/E industry was poised for growth as the
economy continued to improve.
With another year behind us, and new data at hand,
let's look at this year's numbers to see where we stand
and how much improvement the industry actually saw
in the past year. The tables and figures that follow report
the median for each metric, which is the midpoint of a
set of data (not the average). There are many successful firms that outperform the industry "medians," but
the tables and figures that follow may be useful to begin
comparing your firm's performance.
Overall Financial Performance Impacts Compensation
Options-An Update on the Big Picture
The results are encouraging! Net revenues and profits
are continuing to rise faster than expenses and labor
Kate Allen, P.E., is director of A/E/C Industry Surveys for PSMJ Resources, Inc., Newton, Mass.
44
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ASHRAE Journal - February 2015
Table of Contents for the Digital Edition of ASHRAE Journal - February 2015
Contents
ASHRAE Journal - February 2015 - Cover1
ASHRAE Journal - February 2015 - Cover2
ASHRAE Journal - February 2015 - 1
ASHRAE Journal - February 2015 - 2
ASHRAE Journal - February 2015 - Contents
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ASHRAE Journal - February 2015 - S1
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ASHRAE Journal - February 2015 - Cover3
ASHRAE Journal - February 2015 - Cover4
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