Industry in crisis: a question of value

As knowledge-driven businesses, consulting engineering firms survive on the strength of their people. Today, that survival is in jeopardy. Why? A too-low level of project remuneration, which makes staff compensation rates uncompetitive. The long-term implications are significant, says Tim Page, President of the Association of Consulting Engineers of Canada.

“This is no overstatement. The industry is facing a compensation crisis,” Page says. “Consulting engineers have made significant investments in technology and in professional development that have not been reflected by increased project remuneration.”

According to industry figures, consulting engineering compensation rates have remained static for the past 10 years.

“This has put tremendous strain on CE firms and restricted their ability to innovate on project design and to adequately compensate their staff,” Page says. “If the situation persists, CEs will be unable to stay on top of the latest advances in engineering and unable to attract the best and brightest new engineering graduates,” he says.

Research conducted by the Canadian Council of Professional Engineers shows the attraction to consulting engineering is already wearing off: enrolment in civil engineering at Canadian universities dropped 30 per cent between 1995 and 1999.

Part of the solution lies with the consultant selection process, says Andrew Steeves, Chair of ACEC and Vice-President of New Brunswick-based ADI Group.

“We must discourage price-focused competition, and retool the consultant selection process to reward innovation and excellence in engineering,” Steeves said. “We need a process that promotes value — and one that engages CEs in projects at an earlier stage.”

The 2000 ACEC Client Survey found that a majority of public and private-sector clients view consulting engineers as tactical servants. Only 15 per cent of clients consider consulting engineers to be strategic business partners.

“In other words, we are more often asked to design a bridge than to determine whether a bridge is required, and where it should go,” Steeves says.

Consulting engineers can lend tremendous planning and design expertise at the concept phase, Steeves says. “Here, a few hours of design innovation can save hundreds of thousands of dollars in construction, operations and maintenance costs. It’s at the front end of a project that an engineer’s creativity is of greatest value.”

Jeremy Kon, Chief Executive Officer of British Columbia-based UMA Group, concurs. “It seems to make very little sense to squeeze the engineering phase when it only represents about one fiftieth of a facility’s lifecycle costs,” he says.

The current focus by clients on short-term cost control is bad news for construction quality, the general public and our industry, Steeves says. “Price-focused consultant selection is leading to false economies. The market place seems to be committed to building public infrastructure without sufficient reward for quality and sustainability. And this is wrong.”

Change must come swiftly, Steeves says. “We are at a crossroads. We need our clients’ support on these issues immediately if we are to continue to support them with high-quality, reliable, professional service.”

Andrew Steeves, Tim Page and the ACEC membership will undertake an industry-wide awareness campaign over the coming months to encourage public and private-sector clients to help address the remuneration crisis.