Is a shaky compensation strategy holding your firm back?
In today’s fast-moving economy, finding and keeping top talent can make or break your architecture, engineering, or construction organization. Unfortunately, common compensation mistakes end up stifling growth, eating up profits, and deflating morale. If compensation is too high, your firm isn’t competitive for projects. If it is too low, your firm isn’t competitive for talent.
You try to make improvements but get lost in a dizzying array of data with so many variables that you can’t figure out what makes sense for your firm. Making matters even more complicated, how exactly you distribute total compensation (through salary, bonus, and benefits) must be right to optimize both financial performance and employee satisfaction.
Common compensation mistakes include:
- Using position descriptions to set salaries of non-management design and technical staff.
- Allocating bonuses to shareholders based solely on the number of shares they own.
- Using formulas to compute performance bonuses.
- Overspending on employee benefits
- Using regional data or consumer price indices to adjust for employees in different locations.
Based on decades of real-world experience and proven best-in-class strategies, PSMJ’s compensation consulting experts take a daunting and expensive problem into data-driven and action-oriented strategies for success. This is way more than some quick salary benchmarking or generic analysis that doesn’t consider all of the unique factors of an A/E/C business.
Our compensation consulting digs deep to isolate the specific problem areas and opportunities and gives you defensible data to drive success. Because of the unique nature of the A/E/C industry, traditional position descriptions and salary ranges just don’t work. Through our extensive research, we have found the following four factors to correlate most closely with market-based compensation:
- Years of Experience
- Job Performance
But, you can’t just look at employee compensation without also considering its impact on your firm’s financial performance. As such, our approach to compensation benchmarking includes helping you to achieve target billing rates and utilization goals for each employee. We can then use this data to determine key performance indicators such as total direct labor, total indirect labor, net labor revenue, and more.
Are you using standardized position descriptions to determine compensation levels for your technical staff? Are you basing geographic salary adjustments on Consumer Price Index data? Are you assuming that your firm’s salary levels are consistent with the market based solely on anecdotal data? If you answered ‘yes’ to any of these questions, contact us today to learn how PSMJ’s experts can make your compensation headaches a thing of the past!
Don’t hire a consultant who will learn the A/E/C business at your expense. Ask the hard questions to find someone you can trust to get it right. You can get to know some of our compensation experts here:
If you are looking for proven strategies to attract and retain the best talent, check out these additional resources for architecture, engineering, and construction firms:
- Compensation and Recruiting in Today’s A/E/C Labor Market. This two-day program is guaranteed to help you attract and retain top talent, end flawed compensation models, and much more..