Conversations with Architecture Firm Leaders: Human Capital Management Challenges - Acquiring Talent
I'm having conversations with architecture firm leaders because it's critical that everyone who's in a leadership position understands some of the nuance of what it takes to be competitive.
I've been in architecture for 40 years. I've owned architecture firms with employees. I've managed architecture firms as well, and I've garnered all this experience, and I just want to share it with you.
I want to share some of the information from the Deltek Clarity Report, the 45th annual report that they put together, because they have a lot in there to help you be a more effective leader in your firm. So I'm unpacking all the components of this 45th annual report.
Today I'm focusing on Human Capital Management. It's kind of a very corporate sort of word that really means human resources, right? So it's the Acquiring, Maintaining, Nurturing and Strengthening of the people who actually execute the projects in your firm. It's the projects that generate the revenue that is your business. So the people are the key component.
I heard it once described that we don't have inventory, but we often bill for our time, and we manage projects keeping track of time. So the time, though, is the people. And so the people are your assets. That is your inventory. But it still seems really cold. People are dynamic and resourceful, and you want to be able to really build them.
So let's focus on the first element of acquiring people. The Deltek reports indicates that the most expensive business process for architects and engineers is,
not accounting
not payroll
not your software subscription
not liability insurance
not taxes
It's your talent acquisition.
Of all the processes that you have going on in your business, talent acquisition is the most expensive.
Deltek reports that the top three challenges for talent acquisition are,
Availability of good candidates. 90% of firms reported that that was their top challenge. This was the availability of good candidates.
Offering competitive compensation. 56% of firms reported that that was a big concern for them.
Matching qualified candidates to open positions. 41% of firms indicated that that was a challenge finding available good candidates.
Comes back to what I talked about a couple of days ago, about the staffing crisis in architecture industry.
Baby boomers are retiring, so that's, you know, a vast amount of experience going out the door.
We have a missing middle. These are the architects who would have had 20 to 25 years of experience, but we lost them in the Great Recession. 2008 2009 they got out of architecture, they had to change careers because there were no jobs.
Then there's the COVID group, that just wants to work remote or be freelance.
So you've got a real crunch of having to compete with all the other firms for the really good people who are available.
When you do find a good candidate, you have to deal with that compensation issue. And how do you know that you're going to be competitive with compensation? Well, it's more than salary. That's the key thing. So what you can do is focus on the baseline, things like matching retirement and health insurance. Those are expected. Those aren't bennies anymore. Those are just expected. How do you go beyond that?
Well, what are your competitors offering? This is something that Deltek also indicates that firms are putting these initiatives forward to make their talent acquisition more successful.
Employee Training & Development. 65% of firms are putting together employee training and development programs or buying those programs.
56% said that they were building a Visible Career Path.
41% said Improved Manager Employee Communications Through Mentoring. So a clear mentoring program that is designed to help them on a regular basis, open communication lines.
Offer training for leadership growth that covers both the Visible Career Path issue and Employee Training. So you kind of bundle that together.
What does that tell the candidate when you offer that? It says to them that you care about them for one thing, and the other thing is that you have a strategic plan for how to deal with the future of your firm. They see that is a sense of security in the functioning and future of your firm. It tells them, too, that you have maybe a better market position to have a more positive future outlook.
It's a buyers’ market. It's the employees’ market, so you've got to dig in and focus on how you can serve them better. Offer training geared for leadership growth. That covers everything.
