As Industry Outlook Brightens, Bonuses, Raises, Incentives Coming Back

May 10, 2011
New evidence points to a brightening mood among leaders of design firms, with bonuses, raises, and incentives poised to make a comeback.

New evidence points to a brightening mood among leaders of design firms, with bonuses, raises, and incentives poised to make a comeback.

A majority of architecture, engineering, and planning principals are optimistic business will pick up this year, according to business-management-services provider ZweigWhite’s 2011 Principals, Partners & Owners Survey. Fifty-seven percent of the respondents said they believe business will be somewhat better in 2011, while 11 percent said it will be much better. Only 16 percent of the respondents believe the business environment will be somewhat worse in 2011, while none believes it will be much worse. Seven percent expressed no opinion.

As a result of the renewed optimism, firms such as Engineering/Remediation Resources Group Inc., an engineering and construction-management firm in Martinez, Calif., are reinstating raises, bonuses, and other compensation.

“For the periods of 2008-2009, due to the recession, we took the conservative approach to cut all increases and bonuses due to declining margins and flat revenue,” the firm’s chief financial officer (CFO), James Hudson, says in the May 2 issue of The Zweig Letter, ZweigWhite’s weekly management journal, adding salary increases were reinstated this year, averaging 3 percent firmwide, while, “Bonuses were approximately $360,000.”

Stuart Jacobson, president of Stuart K. Jacobson & Associates Ltd., a Northbrook, Ill.-based structural- and forensic-engineering consulting firm, said rising optimism provides hope for the industry. Though 2010 saw a decrease in his firm's profits from the previous year, bonuses still were provided to employees, Jacobson told The Zweig Letter.

“The bonuses were proportionately lower based upon reduced profits; however, as the principal of the firm, my bonus was lower by a greater percentage than the other employees, because my bonuses are typically larger proportionately than theirs.”

As profits increase, bonuses will increase proportionally.

“It is always better when you can show business is on the upswing and not vice versa,” Jacobson said.

Draper Aden Associates, a consulting engineering firm in Blacksburg, Va., reinstated its spot bonus program, Theresa Turner, the firm’s CFO, said. Other programs are on the way.

“We are hoping to reinstate our employee bonus program sometime in 2011,” Turner said. “Certainly, we hope that economic conditions will improve in 2011 and allow us to experience increased profits from 2010 and, in turn, reward our employees.”

About the Author

Scott Arnold | Executive Editor

Described by a colleague as "a cyborg ... requir(ing) virtually no sleep, no time off, and bland nourishment that can be consumed while at his desk" who was sent "back from the future not to terminate anyone, but with the prime directive 'to edit dry technical copy' in order to save the world at a later date," Scott Arnold joined the editorial staff of HPAC Engineering in 1999. Prior to that, he worked as an editor for daily newspapers and a specialty-publications company. He has a bachelor's degree in journalism from Kent State University.