2018 was another busy year for the Architecture and Interior Design market, as well as within FRAME Recruitment. We said goodbye to our long standing Managing Director, Ben Darnton, and I was welcomed as the new Managing Director of the business. My name is Martin Bennell and I have been working as the MD for FRAME’s parent company Faststream Recruitment for the last five years. I look forward to getting to know you in the upcoming year.
I am delighted to share with you our latest annual Architecture and Interior Design Salary Survey and Employment Review, looking at the learnings of 2018 with some in depth comparison and analysis of trends appearing since our first survey in 2015. In this review we set out to report on key themes around employee retention, hiring, pay & bonus, benefits, job seeking and for the first time we report on what matters most to your employees at work.
We answer questions that we are asked frequently by employers; Is our pay competitive? What benefits are other practices offering? How many staff will I potentially need to replace in the next 12 months? Plus much more. I always welcome feedback to our findings and would be delighted if you would like to discuss any of the trends in further detail.
I hope you enjoy the read.
Martin Bennell BA (Hons) FIRP CertRP
Managing Director, FRAME Recruitment
Staff retention is always a hot topic and therefore a great place to start this review. In our previous publication, we reported that on average 42% of Architecture and Interior Design employees planned to leave their current employer within the next 12 months. Our survey data this year showed that there was a correlation in this with the movement we saw in 2018, with over 28% of employees we surveyed having been in their current role for less than 12 months.
Over 30% of those who had been in their role for less than 12 months had 3 – 5 years’ experience, and just fewer than 25% of those with 6 – 9 years’ experience were also in their current role for less than a year. Whilst this is not as high as the 42% forecasted in 2017, it still shows a significant number of employees who have made a move.
We saw a significant drop in those with 10+ years’ experience being mobile and reported that 85% had been in their role for longer than 12 months. This section of the respondents had reported that in 2017 36% of them were planning to move on in the next 12 months but our survey certainly did not reflect this.
"49% of your staff in 2019 are planning to leave their current role”
Comparing 2015 data through to 2018, there has been a huge increase in those candidates with 0 – 2 years’ experience looking for a new role in the next 12 months. Bennell commented;
“In 2015 we found that clients were in control and could be more particular about who they hired. Clients could be very specific in terms of person specification and include a ‘wish list’ of attributes. They were more comfortable holding out for longer periods in their hiring process to ensure that they hired the perfect candidate.”
2018 has been the year of the candidate, and clients are actively ‘fighting’ over sought after staff. In particular candidates with REVIT qualifications are in demand, and they know it!
Candidates with 6-9 years’ experience may have a huge impact on your future business plans, with over 54% planning to move on in the next 12 months. These are experienced people with an array of talent that you could be using – what are you doing to make them stay?
We found of those we surveyed who were planning on making a career move in 2019, 43% had no pay rise in the last 12 months and in addition 31% of those planning on making a move cited they received no benefits at all. Are you looking at yearly pay rises, and what is your current benefit package – do you need to do more to retain your current staff?
Whilst in previous years the actual turnover has not matched up to the reported figures; there has certainly been a correlation in the reported survey figures and the actual number of staff moving companies. The concern for employers trying to minimise staff turnover and disruption is that the 2018 figures show a significant uptick in Architecture and Interior Design employees planning to move on in their career in the next 12 months. The forecast is close to hitting a 50% turnover rate which has significant implications on businesses and their recruitment strategy for 2019.
“We are not able to estimate precisely how this will end up, but it would be easy to predict a turnover in excess of 30%.” Bennell explained.
Why is the percentage increasing? Are staff members feeling more confident about a move due to positivity in the market? In buoyant times, staff are more likely to change roles as confidence is high. In recent months we are hearing concerns around the UK economy; often linked to BREXIT uncertainty, what impact will this actually have on the retention of staff?
"The hospitality market is booming”
We have seen some highs and lows in the marketplace in 2018, with some sectors becoming increasingly busy and securing a larger proportion of candidates.
The Hospitality sector has exploded since 2015 with a 348% up shift in Architecture and Interior Design candidates securing employment in this sector. The FRAME team have seen an uptick in requirements from clients who are working on F&B projects for these candidates, particularly those who are working on European and projects across the globe.
“The demand for beautifully designed bars and restaurants, especially in premium hotels is keeping this sector booming” commented the FRAME team.
The Transport sector has also enjoyed an increase in market share of 256% since 2017. The feedback from clients in this sector has been that a surge in requests for projects based in UK airports, as well as global locations, has driven a need for those in Architecture and Interior Design who have these project skills.
We are afraid to say that not every market has seen growth in 2018, highlighted by a significant decrease in the Residential sector. Projects have become progressively more UK centric as BREXIT has drawn closer. Those working on bespoke high rise developments have noticed a decrease in demand, although residential developments have stayed relatively the same. Lack of funding has been cited as an issue for projects to be signed off, leaving those in the residential sector with limited projects to pitch for.
Our survey showed a drop in those employed in the Commercial sector (decreased by over 20% since 2017) which does not match what the FRAME Recruitment team see on a day to day basis. Our commercial clients are still busy on new projects and seeking new staff to fulfil these requisitions. Like many markets, we have to assume some practices are successfully landing more projects than others.
At the time of writing (January 2019), the entire BREXIT process is showing more uncertainty than ever before. What we can be certain of is that there will continue to be winners and losers in the Architecture and Interior Design market in 2019 – no matter what outcome the UK Government achieves.
PAY & BONUS
Has pay changed within the last 12 months? We reported in our last review analysing 2017 pay data that is had generally remained stagnant with a few small increases in some disciplines. This was not the case in 2018 and we have seen some changes across various job types.
"8% increase for REVIT users"
If you were a qualified REVIT user in 2018 you were in demand and you could command a higher salary! Those with this experience were achieving on average an 8% increase on their salary in comparison to those who did not possess it.
All levels of Architectural Technicians showed salary increases from 2017 to 2018 who were working outside of London. These increases potentially show the effect of a skill short REVIT market inflating salaries. Now might be the time for practices to consider in-house REVIT training to alleviate the skills shortage that is leading to these increased pay levels.
Architects have all seen an average pay increase whether they are based in London or not, but the London based candidates are still seeing a higher average salary than their counterparts outside. The category with the most change from 2017 to 2018 in London have been those who have 0 – 2 years’ experience, candidates have seen an increase of 8% on their salaries year on year.
Similarly, outside of London, Architects with 0 – 2 years’ experience also saw an increase; a huge 12% rise was recorded. Have practices outside of London been pressured to offer increased salaries to attract the right talent when recruiting to stay relevant in 2018?
Big variations for employees outside of London were also those with 10+ years’ experience citing a 5% increase in pay in comparison to 2017.
Bennell noted “It appears clients are rewarding staff with many years of training and experience with increased salaries in 2018.”
It is also worth noting that the group of candidates who were rewarded with pay rises were in turn also less motivated to seek new positions in 2018. Only 15% had been in their job less than 12 months.
Surprisingly for us, 2018 was not a year that saw a salary increase for Interior Designers based in London, who according to the survey, experienced a drop compared to 2017. There was however a small increase for those with 3 – 5 years’ experience. Interior Designers in London with 0 – 2 years’ or 6 – 9 years’ experience saw salaries drop by nearly 7%.
There is a skill shortage in the market for Interior Technicians and it shows in terms of salary. Nearly all levels of experienced Interior Technicians have enjoyed an average increase in salary from 2017 to 2018. In particular those with 3 – 5 years’ experience in both London and outside of London saw average salaries increase by over 13.5%!
The skills shortage in Interior Technicians and candidates qualified in REVIT highlights how a skill short market leads to pay inflations. What will the next skill shortage be? Are you ready with an increased staff salary budget to enable you to compete for these candidates? What long term training strategies will you put in place to alleviate these skills shortages?
Does gender still affect pay in 2018? Back in 2017 Dezeen reported in their Gender Equality survey that “in the UK, 39 per cent of new Architects entering the profession last year (2016) were women, yet the proportion of Architects working in the country is about a quarter.” 40% of our 2018 survey respondents were female, so although we have not hit an equal 50/50, we hope this is a sign of an increased equalization in the marketplace.
"The percentage of people receiving a pay rise is falling"
“Can I have a pay rise?” is a common question asked by employees in all industries, not just Architecture and Interior Design, but how many are securing pay rises in their current roles without having to move employer and what is the average percentage increase?
Our results show that respondents receiving an annual pay rise has decreased significantly since 2015 and again if you only compare it to 2017. Only 40% of employees stated they had been given a pay rise in the last 12 months, a dramatic decrease from 63% in 2015. Why is this trend occurring? Are employers aware of the impact of not giving a pay rise? We have already noted that 43% of those who were planning to move jobs were not given a pay rise in the last year; it has an impact on employees’ commitment and motivation to stay in their current role.
"2018 was the year of a lower number of pay rises; will 2019 repeat that trend?"
It is those with the least experience that received the lowest proportion of pay rises, only 29% of candidates with 0 – 2 years’ experience had been given a pay rise compared to over 55% in 2015. This also motivated employees to move on in the next 12 months (58%) – can you afford to keep bringing in new staff at lower levels and losing them because they have not acquired a pay rise? Bennell considered what impact this can have on your business; “Losing junior staff can have a big impact on businesses of all sizes – costs of re-hiring, on-boarding and training are significant.”
Even those with significant amounts of experience (6 – 9 years’) saw the probability of securing a pay rise go down. 77% enjoyed a pay rise in 2017, trickling down to 60% in 2018. It is not a surprise that those with this experience level are also highly motivated to find a new job in 2019 (55%).
Bonuses can be a contentious issue in practices; how much should you give? What should it be based on? Is the bonus achievable?
The candidates we speak to are always keen to find out about salaries and more senior staff, for example Senior Interior Designers & Project Architects, also care about bonus schemes. Did employees receive bonuses in 2018? Our survey findings showed that 38% received a bonus. This highlights a downward trend from 2017 but has not fallen to the lower depths that 2016 brought.
If you look at bonuses and pay rises combined compared to 2017, employees are suffering from a decrease in both aspects – is this what is driving an increased desire to move on in their roles to try and secure a higher salary elsewhere and the ability to obtain a bonus?
“Over 25% of employees do not receive any benefits”
An employee benefit scheme has continued to be a hot topic amongst HR Managers and Directors of practices and we are still asked by clients what is happening with them in Architecture and Interior Design. We see that it is being recognised as an integral part of retaining current staff and attracting talent to their businesses.
We turned it on its head in our survey this year and asked the candidates rather than the employers what they were receiving as part of their employee benefit scheme. Over 25% of those surveyed were not receiving any benefits at all. Already noted in
this report, of those looking to make a move in their role in 2019, 31% were
not receiving any benefits. The most popular benefit was offering employees staff events. Staff events can have a two pronged objective enabling a recognised reward for employees’ hard work but also offering a solution to improve company culture.
A less likely benefit to be on offer was a company car. We were not surprised by this finding with a larger audience of those surveyed being based in central London where company cars are not a common staff benefit.
We were pleased to see employers investing in their staff futures by candidates citing that nearly 34% were offered an enhanced pension scheme. Perhaps this has been aided by the law requiring UK employers to pay into their employees’ pension schemes.
Private medical (individual) and flexi-time were also popular options on offer. Flexi-time does not cost an employer anything in terms of financial spending, but it does require increased trust in the employees, and whilst it is sometimes tough to manage on a day to day basis, it is clearly something that employees are pushing for.
Benefits were affected by a candidate’s time in their role. Those with over 10 years’ experience were more likely to enjoy bonuses, enhanced pensions, private medical (both individual and family), shares, private dental care, subscriptions and flexi-time.
There was a higher probability of those who have been in their job less than 12 months to receive no benefits at all. Is this a savvy move based on a retention strategy by employers to motivate staff to stay with the business longer to achieve benefits? Will this make newer staff feel less rewarded?
A company mobile phone, as part of the benefits package, was also positively mentioned by many completing the survey.
WHAT MATTERS MOST TO EMPLOYEES?
How many employers are asking their employees what really matters most to them at work on a regular basis? To implement changes in how they operated and what they offered their staff, FRAME Recruitment created an annual survey for their own employees to find out what they rated most important out of five factors. Using this practise we asked Architecture and Interior Design candidates the same “What matters most to you at work?” The choices they could rate from most important to least were: Salary & Bonus, Company Culture, Training & Development, Career Progression and Work-Life Balance.
It is perhaps not surprising that Salary & Bonus is the most important but with the second most important factor being Work- Life Balance. We feel that the results from our survey last year on unpaid overtime are still having an impact on what those see as important. If over 70% of respondents are undertaking unpaid overtime, this is going to have a huge impact on someone’s ability to balance their work and home life.
We did notice that 18% of candidates were offered flexi-time, which has a positive impact on the ability to manage a good Work-Life Balance.
Employees are speaking out – they want to be able to balance their time at work with life at home. If employees are being asked to put in extra unpaid time, could this be the significant factor that is making nearly 50% of employees want to move on to new employment? Are employers able to change work cultures within this sector to improve the Work-Life Balance of their employees? If no change is implemented, will we continue to see labour turnover increase and the requirement to hire new employees greater than ever?
How do employee pay rises change what matters most to them at work? It changes a lot! Those who had received a pay rise of 20% or more in the last 12 months cited that Career Development mattered most to them at work by a huge majority, followed by Work-Life Balance, Training & Development, Company Culture and Salary & Bonus. If employees are given good pay rises, they start to focus on other elements, like their career, training and development. “This must create a completely different outlook for these employees, pushing them to do better in their roles to try and secure a promotion; this has to be good for employers who will reap the success in projects from this hard work. If giving employees a pay rise could change their outlook to drive them forward, surely this has to be a great outcome for all, employees, employers and the marketplace as a whole?” summarised Bennell.
We have seen some interesting changes in 2018 in the Architecture and Interior Design market.
The Hospitality market is booming, but will this good fortune continue into 2019?
There is an increased desire from candidates to change jobs this year. What impact it will have on businesses is yet to be seen.
Employees are experiencing less pay rises in their current roles and are seeking increased salaries by looking to move on; will clients implement changes in pay structures to aid retention in the upcoming years?
There have been two main skill shortages in the market this year – we cannot predict the next one but we hope that employers are considering their internal training programmes to keep up with these.
We have seen an array of benefits on offer, with those remaining in their current employment for longer periods benefiting more than new starters.
Employees are rating Salary & Bonus and Work-Life Balance as really important to them, we hope this aids employers with what they will focus on in the upcoming year.
This report has been produced internally by FRAME Recruitment.
Data collected in November and December 2018.
All salary data listed in GBP.