PKF O’Connor Davies Releases 19th Annual Architectural and Engineering Studies
Studies feature benchmarking data and industry insights on profitability, retaining talent, IT statistics and more
PKF O’Connor Davies, one of the nation’s largest accounting, tax and advisory firms, today announced the release of its 19th Annual Architectural and Engineering Studies. The two studies contain important financial and operational data from the A&E firms that participated. The studies reflect the current state of the industry and provide important benchmarking data for firms to focus on to improve profitability and continue to grow and operate successfully in today’s business environment.
Through various measures of productivity and profitability, the studies provide an overview of the average firm’s results from operations in 2022. This data has been analyzed to identify trends in the industry using key indicators that firms can use to benchmark their performance against. These studies identified areas to improve and best practices firms should be adopting. New this year is expanded IT statistics surrounding security awareness and IT policies.
Key takeaways from the studies include:
- The average A&E firm continued to see an increase in profitability despite increases in the breakeven multiple and overhead rate as the impact of inflation affected many firms.
- Project profitability remained strong as evidenced by the increase in billing multiples for both architects and engineers.
- Retaining and attracting talent remains a challenge which is reflected in the high staff turnover ratio. Firms continue to feel market pressure to raise compensation rates and add more benefits. This is reflected in a 10 year high of pay raises.
- Hybrid work is likely here to stay – less than 20% of firms require employees to be in the office full time. It appears that offering flexibility can be a key retention strategy as employees prioritize work-life balance.
- Despite rising costs, working capital to net fee income has remained healthy and firms were well positioned going into 2023.
“For nearly two decades, our clients have used the data in our architecture and engineering studies to plan ahead and grow their businesses. We’re proud to release the latest editions of these studies, which are invaluable resources for decision makers in the A&E space”, said David M. Sullivan, Jr., Partner and Leader of the Architecture & Engineering Practice at PKF O’Connor Davies. “As these studies show, the architectural and engineering industry continues to fare well despite the economic challenges over the past several years. However, it remains crucial that firms have the tools and talent in place to maintain a strong financial position.”
To access, download and read the 19th Annual Architectural and Engineering Studies in their entirety, visit the following links: Architectural Study and/or Engineering Study