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Update on Architecture and Engineering Executive Career Paths
 
Published Tuesday, July 25, 2017

Zweig Group, an Arkansas-based business management consulting firm, released a survey of principals, partners and owners of architecture, engineering, planning and environmental consulting firms. The 2017 edition was derived from the responses of 150 individuals, 93 percent of which were owners in their firm, with over half owning at least 25 percent. The average net service revenue of these firms was just over $9 million.
 
In the firm's 2014 survey, only 4 percent of respondents thought there was any possibility that they could be laid off in the coming year. This year, that number was up to 10 percent. Though the political turbulence has caused some uncertainty in the market, most respondents still feel that the next few years will continue to provide ample opportunities for growth. Eight percent of principals took a pay cut last year, with a median pay cut of 25 percent of their total compensation.
 
Most principals (72 percent) were generally pleased with their careers and had met or exceeded their career goals. Fully 81 percent said they would recommend the career path to a friend or family member.

The survey also revealed some significant challenges in achieving the objective of ownership. Most owners must have 10 years of industry experience, have been with their firm for five years and have both a bachelor’s degree and professional license. Nineteen percent of respondents said they had to purchase a minimum amount of shares to become a principal, with the median "minimum amount" of shares to be purchased was two percent. Seventy-seven percent said they actually purchased the maximum amount of stock available when they became a principal, with an average initial purchase of 35 percent of the firm’s outstanding stock.
 
The typical day of an owner is dominated (by almost 40 percent) by firm management activities. Most owners would like to pare that back to about 30 percent and use the remaining time mentoring staff and conducting business development.

The report found an interesting discrepancy among principals in firms with a declining growth rate over three-years, finding that they were only spending four percent of their days on marketing and business development. These same owners felt like they should be spending closer to fifteen percent of their days on marketing and business development. In comparison, owners in fast growth firms are spending over twenty percent of their day on marketing and business development.
 
The stress and long hours taken on by firm owners does not go unrewarded. The average base salary of a firm owner was $150,000, which represents around 75 percent of their total compensation. The other 25 percent comes in some form of bonus or shareholder distribution, forming an average total compensation of $265,000.


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