Benchmark Report 2023: Competitive Compensation

By Vered Klein On Nov 8, 2023

In the ever-evolving landscape of architecture, the key to success lies not only in designing high-quality buildings, but also in nurturing a talented workforce that drives innovation and growth. Architecture firms face the challenge of retaining top-tier talent while ensuring their continued profitability. This delicate balancing act involves a multifaceted approach that harmonizes compensation strategies with organizational sustainability.

At the heart of any effective talent retention strategy is a competitive compensation package. Architecture firms that offer enticing base salaries, accompanied by benefits such as health benefits, RRSP matching, and generous paid time off, stand out as employers of choice. A well-rounded compensation package demonstrates a firm’s commitment to the well-being of its employees.

According to the Canadian Architectural Practices Benchmark Report, several elements of the compensation package demonstrate relative stability within the industry. To illustrate, Junior Architects earn a base salary ranging, by median, from $59,000 to $65,000—a range that bumps up to a median high salary of $70,000 among mid-sized and larger firms. Intermediate Architects earn an annual salary ranging, by median, from $70,000 to $80,000.

There is an approximately 15% variation in base salary associated with the size of the firm. For instance, an Intermediate Architect at a smaller firm earns an average of $72,125, while an Intermediate Architect at a larger firm commands, on average, a salary ranging from $72,967 to $85,187. Senior Architects earn an annual salary, by median, from $90,000 to $100,000; but in firms of over 26 people, the average salary range jumps to $90,164 to $125,779.

A close examination of the report’s data can help firms to compare their base salaries and bonus structures with the industry as a whole, taking into account firm size and geography.

Beyond salary structures, how can an architectural firm maintain its competitive edge?

Performance-driven incentives: Acknowledging and rewarding exceptional performance can significantly boost employee motivation and loyalty. By tying bonuses, profit-sharing, or project-specific rewards to architects’ achievements, firms incentivize their teams to consistently deliver high-quality work and meet performance targets. The survey shows that half of the respondent firms with over three employees did not have a bonus structure, and 80 percent of the firms that did base bonuses on firm profit—more specifically, on the company’s financial performance as a whole. Tying bonuses to each contributor’s performance, or to project-specific performance, can better incentivize employees.

What can this look like in practice? Project managers might be evaluated based on project delivery and client satisfaction, while design teams might be assessed on quality of design. This should be combined with clear communication around bonus structure, performance metrics, and how performance will be evaluated. Making a clearer connection between performance and reward should have a significant impact on employee performance.

Navigating clear career paths: Architectural professionals seek purpose and direction in their careers. When we speak to candidates about their motivation for changing jobs, career growth is the second-most common reason, compensation being the first. Firms that provide transparent career progression paths pave the way for junior architects to move towards senior roles. This not only fosters commitment, but also encourages long-term engagement, enabling the firm to retain and nurture its future leaders.

The Canadian Architectural Practices Benchmark Report shows that only 31 percent of firms with 3-10 employees had a career path for advancement, and this number remains relatively low in larger firms, with only 60 percent of firms over 10 employees offering a career path for advancement. Similarly, only 23 percent of firms from 11-25 employees have an HR professional, and even among firms of more than 26 employees, only 13 percent have dedicated staff for in-house training. This is a huge gap in the industry. What architects crave is progression and growth—and that is something that most firms do not provide. A firm that invests in the resources to create clear pathways for growth will find itself in a competitive position in this market.

Mentorship and skill enrichment: The transfer of knowledge and skills is paramount in sustaining architectural excellence. Establishing mentorship programs that pair junior architects with experienced mentors facilitates this exchange. Moreover, by investing in continuing education, certifications, and workshops, firms empower their workforce to stay at the forefront of industry developments. When employees know that they can move up the ladder by means such as project management training, leadership development, and Revit courses, they are motivated to stay with a firm to achieve those goals.

Succession planning for continuity: Succession planning is a strategic imperative for architecture firms. Identifying and grooming potential leaders ensures a seamless transition when senior architects retire or move on. This approach safeguards the firm’s legacy while demonstrating a commitment to its employees’ growth.

Flexibility to foster balance: Acknowledging the importance of work-life balance, firms that offer flexible work arrangements, including remote options or adaptable hours, attract and retain architects seeking a harmonious professional and personal life. Hybrid work arrangements have become the norm, with 82 percent of respondents on the staff side saying their firm accommodates remote work, with the majority working remotely two to three days per week. 95 percent of firms have the necessary technology for respondents to be successful when working remotely, and 66 percent of staff experience no change or an increase in productivity.

Despite the increased acceptance of remote work, work hours remain an issue in the industry. About half of the individual respondents reported working more than 40 hours/week, and about 23 percent reported working over 45 hours per week. We all know overtime is at times needed to meet deadlines. Offering a manageable workload that only requires occasional overtime will surely offer a competitive advantage in this industry.

Recognition and client exposure: Providing architects with the chance to interact with clients and recognizing their contributions goes a long way in boosting their pride and motivation. When employees have client exposure, it brings about positive outcomes like greater job satisfaction, skill improvement, and more opportunities for career growth. Recognition isn’t just about making employees happier; it also promotes a culture of excellence and teamwork.

Many firm owners that our consultancy has spoken to say that the fees in the architecture industry simply don’t allow for further expenses. Achieving a harmonious equilibrium between talent retention strategies and profitability considerations requires a comprehensive approach.

Here are some strategies to consider:

Optimized resource allocation: Enhancing productivity hinges on judiciously matching architects’ expertise with project requirements. Optimizing resource allocation strategies can help curb unnecessary expenditures, while also elevating project outcomes by leveraging specialized skills.

Monitoring utilization rates: Tracking architects’ utilization rates is important for ensuring the maximum value from their capabilities. This practice optimizes revenue generation potential, while upholding job satisfaction levels.

Staying market-competitive: Continual monitoring of industry compensation trends through salary surveys such as the Canadian Architectural Practices Benchmark Report empowers firms to remain competitive while judiciously managing costs, ensuring an advantageous intersection of talent retention and financial stability. Monograph’s 2021 Best Practice Report shows that high-performing firms are better at retaining their employees. These firms are also more likely to track their budgets and schedules, modernize their operations, and invest in technology solutions.

In the dynamic world of architecture, achieving the equilibrium between talent retention and profitability is a journey that demands strategic planning, continuous monitoring, and adaptability. Architecture firms can best navigate this balance by intertwining compensation strategies that foster talent development with operational optimization that maintains profitability. Ultimately, the synergy between a skilled and motivated workforce and a financially sound organization supports architectural excellence and positive outcomes for all involved.

Vered Klein is a recruitment expert who specializes in the architecture and design sector. Over the past two decades, Vered Klein Recruitment Consultants has focused on developing a deep understanding of its clients’ practices, nurturing talent within the industry, and refining its methods by actively listening to both candidates and clients. In her role as a trusted advisor, Vered plays a pivotal role in the success of globally recognized architecture and design firms.

This article is part of Canadian Architect’s series on the Canadian Architectural Practices Benchmark Report (2023 Edition). The full report is available for purchase from the RAIC.

See all articles in the November issue