ASHRAE Journal - February 2014 - 16

SPECIAL REPORT

allowing firms to charge fees that cover their costs or
project management is improving and more projects are
being done within budget. Whether these higher multiplier levels can be sustained will be the subject of future
surveys.
Annually, for the past 28 years, PSMJ Resources,
Inc. has conducted a fees and pricing survey that
solicits data from both engineering and architectural firms for 17 different positions. See Table 3,
Figure 4, and Figure 5 for the historical trends for
billing rates for common engineering
positions. As expected, billing rates hit
a five-year high in the 2009/2010 time
period and a five-year low for most
$200
positions in the 2011/2012 time period.
$180
$160
Nearly every position reports that billing
$140
rates increased between 2012 and 2013,
$120
which reinforces the thought that the
$100
$80
A/E industry is recovering. In fact billing
$60
rates for all engineering positions have
$40
2003
exceeded their 2009/2010 time period
high.

TABLE 3

Historical trends median hourly billing rates.
2013

2012

2011

2010

2009

PRINCIPAL

$185

$177

$178

$183

$175

ASSOCIATE

149

146

145

150

152

PROJECT MANAGER

140

133

130

131

132

PROJECT ENGINEER

125

124

120

SENIOR ENGINEER

140

135

125

130

ENGINEER

108

105

101

100

JUNIOR ENGINEER

Principal
2004

2005

2006

2007

Associate
2008

2009

Project Manager
2010

2011

2012

2013

FIGURE 4 Historical management staff hourly billing rates.

Conclusion
Quality engineering talent are becom$160
$140
ing harder to find each passing year; the
$120
number of graduates is not keeping pace
$100
with the number of retirements or peo$80
ple choosing to leave the industry. This
$60
situation was exacerbated by the recent
$40
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
downturn when many of those that were
laid-off left the A/E industry for other
. . Junior Engineer
Project Engineer
Senior Engineer
Engineer
career options. Engineering firms are
going to continue to be challenged to do
FIGURE 5 Historical engineering staff hourly billing rates.
more with less yet still attract and retain
quality talent, and a firm's compensation
options are dramatically expanded with strong
Understanding the financial position of the indusprofitability.
try as well as key data trends can help both the engiThe industry is improving but has not fully recovered neer and the employer to better understand their
from the recent recession. Profit levels are still below
compensation options. Firms that are growing and
all-time highs, compensation rates for many positions
prospering are in the best position to move away
have recovered to 2009 rates, and target multipliers
from industry trends and develop compensation
are on the rise, which results in higher billing rates.
strategies that allow them to differentiate themHowever, if the project work can't be done within that
selves from their peers to attract and retain high
rate, then profit is compromised as well as the overall
quality engineers.
financial health of a firm (Figure 3). Small improveNote: If you are interested in participating in PSMJ's 2014 surments in the achieved direct labor multiplier can yield veys you can find out more about the benefits of participation at:
significant improvements in profitability.
www.psmj.com/surveys-research/participation.cfm.
16

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