Full Sail Partners Blog | Deltek Clarity Report

According to this year’s Deltek Clarity Architecture & Engineering (A&E) Industry Study, it is looking to be a landmark year for the architecture and engineering industry with net revenue growth forecasted to grow to 17.6%. A&E is doing quite well despite the pandemic with the highest net revenue growth in the last ten years at 11.4%. This increase is assisted by A&E’s market position, which is expected to either grow or remain steady in markets across the board. Most notably water/waste/stormwater, transportation, and industries that fall under the “other” category (such as life sciences and senior living) are predicted to see great increases. As a result, firms will not only need to strategically pursue the right projects but will also need to grow and develop a staff to deliver on these projects.

Top Business Development (BD) Challenges 

The ever-changing nature of the business world is continuing to keep firms on their toes with new challenges. Unlike the previous year, a majority of firms (78%) have identified that finding and retaining qualified staff has been a struggle for them. This is coupled with other mass-reported problems such as staffing shortages and difficulty retaining employees. Staffing challenges have a direct impact on business development, not only lacking adequate staff to conduct business development activities but also not being able to provide the most qualified teams to win and deliver on projects. 

Time to nurture client relationships is the top business development challenge for A&E firms according to the report. With favorable market conditions, new opportunities will be plentiful which poses a challenge for firms to keep up with their clients. Time is money and time is also in short supply. With the reporting firms revealing an average work backlog of nearly 9 months, it is clear that companies must find a way to increase productivity. Upskilling business development talent and streamlining the BD process will help to free up time to strategically nurture client relationships. 

Other top BD challenges from the study include increased competition and identifying prospects. Firms must differentiate and hone branding across thought leadership and social marketing channels to distinguish themselves in the marketplace. Additionally, with a positive industry outlook this year, firms will need to be more strategic in pursuits that work best for their company’s strengths. 

Increased Formal Business Development Process 

Of the companies surveyed, 45% have a formal business development process, which is an increase going up from 39% the previous year. Though this means that 55% of firms surveyed still do not have any formal business development process. In these cases, responsibility for business development tasks is most often pushed to the executive team, project managers, and marketing staff. While dedicated business development staff may not be necessary in every case, it is important not to overlook the kind of work they do. Most notably, they tend to client relationship development, proposal development and networking, but they have plenty of other duties as well. Their jobs help to create new business opportunities, and within the last year active client relationships, requests for proposals and networking placed in the top five sources of new opportunities in the surveyed firms. 

A Positive Year for Proposals Requires Evaluation 

As suggested by the Deltek Clarity study, operating in a market with limited resources but high demand, the go/no go process is significant to evaluate the projects firms will pursue. While the number of firms employing the go/no go process has increased in the last year, there is still a large population who do not utilize it in the slightest. Of the companies who reported, 22% don’t use any kind of go/no go process. Listed below are the top three questions that businesses ask when deciding whether or not to accept a proposal: 

• Is it a good fit for the type of work we do? 
• Do we have an existing relationship with the client? 
• Do we have the staff to deliver the project?   

This method of weeding out less profitable projects is more useful than ever, as a significant rise in the number of proposals submitted and the number awarded in firms of all sizes was observed. In-kind, the average win rate of proposals has increased in the last year to 49.2%, the highest it’s been since the beginning of the COVID-19 pandemic. The average capture rate is also up from the previous year, now standing at 48.5%. 

Marketing Techniques Present and Future 

A majority of businesses reported using social media posts for marketing, with only 16% not indicating any use. This was followed by client-specific marketing at 67%, trade shows/exhibits at 56%, email marketing at 54% and thought leadership at 42%. The order of these marketing methods is projected to change, however, with the study offering up that client-specific marketing could overtake social media marketing within the next five years. Thought leadership is predicted to advance to third place among important marketing techniques, with trade shows/exhibits and email marketing falling more and more by the wayside. 

Business Development Initiatives 

Based on this year’s study, some of the priority business development (BD) initiatives for A&E firms are hiring additional staff, earlier identification of opportunities and requirements and expanding geographically. Since BD has not been spared from staffing challenges, and firms are seeing more proposals, projects, and nurturing opportunities, the focus on obtaining the best-qualified staff is of tantamount importance. Another area that has grown in importance is the geographic expansion of firms requiring yet again additional staff. One more initiative to identify opportunities and their requirements remains top of the list as well. Teams shouldn’t be wasting time and their resources on projects that are not winnable. 

Final BD Outlook from Deltek Clarity 

The 43rd Deltek A&E Clarity study found that while the world still is not clear about the pandemic, things are looking up for the industry. The top problems of participating firms are not dire, and by focusing on the employee base and current client relationships, these issues can be fixed. This year’s Deltek Clarity report also noted that freeing up time is necessary to clear the obstacles in the way of each business regarding BD. To remedy this, employing the go/no go process and better utilizing the tools provided by Deltek to streamline the BD process is suggested. 

How does your company stack up to those that participated in the survey? For a more in-depth look at the data behind the 43rd Deltek A&E Clarity study, use the link below to receive the report for free right now! 

Finding, recruiting and retaining top talent affects nearly every part of architecture and engineering (A&E) firms, as evident in the 43rd Deltek Clarity Study. In a previous blog article, we dove into the specific human capital management (HCM) challenges. Today’s focus will be on sharing tips that A&E firms can use to address those challenges.  

Acquisition & Retention Connection 

The number one initiative that respondents to the survey were considering taking was improving the opinion of their organization in the marketplace to attract better talent. Firms should be thinking about their brand as a sum total of all of their processes, actions and culture. It’s not just a mission statement on a website. It’s critical to start with the firm’s brand and ensure it’s authentic.  

How well does the firm’s brand display authenticity and empathy, as well as showcase modernization with firm processes and utilizing technology? Also, it’s not enough to just focus on the brand. Firms have to additionally communicate the brand outwardly, and not just by the firm’s employees, but by clients and customers who know other people in the marketplace.  

Another tip is to review the firm’s hiring process. Ensure everybody in the hiring process understands the experience the firm’s trying to create and follows through on. Candidates will drop out of the process and/or won’t accept positions because they weren’t treated well throughout the process. The firm should create an experience specific to the acquisition process. Everyone involved in the firm’s hiring process should understand the critical role that getting the offer accepted depends upon creating a great experience and following through on commitments. Every touchpoint with the candidate is a way to demonstrate the firm’s culture. 

Onboarding talent effectively is another tip to address HCM challenges. According to the Clarity study, it’s taking around four months from when the job is posted to the new hire producing billable work. So, the better the firm is at its onboarding program not only will that new hire be quicker to bill work, but it’s also a key time to keep that person’s retention and engagement high. New hires are already excited about coming onboard, and if there’s a lag in their training and they don’t feel like they’re having an impact on the business, their engagement level can drop quickly.  

Acquisition and retention are connected. If the firm can create a good retention strategy, especially through branding, it will have less need for acquisition and thus fewer acquisition costs. This frees up more budgets to continue with retention and engagement programs which in turn helps increase retention.  

Culture & Communication 

One of the most important things to the modern workforce is relationships, specifically, relationship-focused employment experiences. So how do A&E firms get to that? Here are a few strategies: 

• Continuous Feedback Discussions – The relationship between employee and manager is pivotal.  Annual performance reviews can be expensive and not many people get a lot out of them. Firms should maybe at least supplement their annual review process with continuous feedback discussions. These are times when people can connect frequently and start to feel value.  
• Pulse Surveys – Pulse surveys are a way to demonstrate an interest in employees’ perspectives. 
• Authenticity & Empathy – The modern workforce craves this, and this can be demonstrated through continuous feedback discussions and frequent interactions between employees, project teams, project managers and direct supervisors. People want to work for somebody they connect with, somebody they align with, and it’s never been more important. From a modernized performance management perspective, firms should implement processes that allow for frequent connection and allow opportunities to display authenticity and convey empathy. 
• News & Information – Employees desire company news and information and want to know how the firm is doing. They also want to know where they stand. In the absence of information, people create their own, and when they don’t know how the firm is doing, they start to think that maybe things aren’t going well. How can the firm create a great culture and engagement by just making sure it’s transparent as possible? Furthermore, how can the firm make sure that information is shared frequently and consistently? 

Modern Performance Management Tools 

Three modern performance management tools include continuous feedback, continuous goal management and recognition. Below is a summary of each. 

• Continuous Feedback – Good continuous feedback discussions are not just “check-ins” but are opportunities to drive goal discussions, career development discussions, and improve engagement and retention. They can also serve as an opportunity to recognize people in a one-on-one setting. They are very highly desired by the modern workforce and can replace or supplement the appraisal process.  
• Continuous Goal Management – This approach removes the time box traditionally associated with annual goals which is not how people work. Instead, this approach focuses purely on the alignment of the employee and the firm, driving them both mutually forward.  
• Recognition – This is key to engagement, retention and boosting productivity, morale and happiness. When employees are recognized for good work, it releases dopamine in their brains and creates feelings of pride and pleasure. This then tells the brain that if they do more things like this, they’ll get more praise and recognition and feel this way again. As a result, the behavior starts to change, but be careful not to just recognize people haphazardly and constantly to a point where it’s meaningless. So, think about what a formal recognition program can do for not only the firm but from a brain chemistry standpoint.  

Learning & Development 

The two top initiatives for managing talent from the study were "create/improve success and career development planning" and "create/improve employee engagement programs." Here are some tips to take action on learning and development. 

• Organizational Focus – Learning and development has to be a firmwide focus with buy-in from executive leadership. Managers need to promote learning, and time has to be devoted to it.  
• Career Mobility – Firm leaders have to allow for career mobility. Retaining a great employee, at least in some aspect of the firm, is better than losing them totally.  
• Development Plans – There should be plans for all levels supporting onboarding, employee growth and gap fills. 
• Project Focused – There should be project-focused learning and development. Many survey respondents said that PM training is key. Firms should invest in that project management training. 

• Upskill & Reskill – This strategy supports career mobility, improves employee engagement and retention and improves productivity. Watch this webinar to learn more about how to deploy upskilling and reskilling at your firm. 

Dig Deeper into the 43rd Annual Deltek Clarity Report 

Hopefully, A&E firms will consider all of these useful tips to address their HCM challenges. To get more details on A&E firm HCM trends or other interesting findings, download the full Deltek A&E Clarity report. Click the image below to grab a free copy of the report along with a scorecard to chart the firm’s results. 

It’s no surprise that finding and retaining top talent is a challenge facing every architecture and engineering (A&E) firm in North America but what specific human capital management (HCM) challenges are there? How do firms compare to the industry and what do the numbers really tell them? This overview is the first piece in a two-part series that will dig into the HCM specific challenges revealed from the 43rd Annual Deltek Clarity Study.  

Every Department Impacted by Staffing Shortages

Almost every area of the Deltek Clarity Study cited human capital management (HCM) towards the top, if not the number one challenge to growth. Many industries, including A&E, have been affected by the great resignation. Specifically, firms are saying it’s hard for them to win more business because they’re not necessarily certain that they can go ahead and staff projects. Hiring additional staff has become of paramount concern for A&E firms right now.  

The top financial challenges indicated from the Clarity study are finding and retaining qualified staff. This isn’t about a certain number of staff, but really finding qualified people that can handle the type of work and the different projects the firms have. This need is leading to more career development and training initiatives by A&E firms.  

Similar top challenges are cited in the project management area, including staff shortages and inexperienced project managers. So, how do firms develop project managers? How do they get the project managers up and running so they manage projects effectively? Part of the solution is hiring more experienced project managers, but other top initiatives include developing internal project manager best practices and investing in internal project manager training. 

Top Challenges for Human Resources 

The study asked what the top three challenges were for managing human resources. The number one response was retaining employees followed very closely by employee engagement/experience. Firms are realizing that they need to really become proactive in their retention and engagement efforts.  

No longer are firms just competing with companies in their own geographic region. With the rise of remote work, A&E firms are competing with other firms located across the country and talent is being recruited away from other areas. Other top challenges included career development, planning and performance management.  

Top Talent Acquisition Challenge 

The Deltek Clarity Study asked about the top acquisition challenges A&E firms are facing. The top response was the availability of good candidates in the marketplace. Based on this, it might be a good time for firms to step back to look at how they can change their practices or modernize their efforts to support recruiting.  

Specifically, this requires identifying what a good candidate means to the firm. The firm should ask what makes somebody who handles a role in the firm successful at it? Does the firm basically just review previous job descriptions or job profiles and reuse those? Has the firm really looked at what makes people successful in their specific role and in the firm as a whole from a culture perspective? 

After doing this initial analysis, the firm should evaluate what it is doing to diversify. Diversifying the talent pools makes sure that the firm is putting itself in the best position to find candidates that meet the profile developed. Also, the firm should consider what roles can be handled remotely. 

Firms should think about this from both angles – first doing a good job of understanding what makes people successful at the firm and then diversifying the talent pools to widen the marketplace. 

A&E Industry HR Statistics  

To give some idea of how a firm fits within the North American A&E industry, here are some high-level statistics related to human resources from the 43rd Deltek A&E Study: 

• Employee turnover has increased a little from the previous year and is at 13.6%. 
• Staff growth overall is up to 3.2% which means that despite a higher turnover rate, firms are still growing.  
• However, offers accepted decreased and is sitting at 77.4%.  

• Only about 50% of firms in the survey had more open positions last year, while this year’s survey saw 65% of firms with more open positions.  
• The time to fill positions is becoming longer and longer, with 50% of firms saying it’s taking 60+ days to fill open positions.  

Gen Y Has Taken Over 

The Deltek Clarity Study looked at both generational composition firm wide and by management level. Firm wide, the Millennials (Gen Y) have taken over the greatest portion of staff making up 39%. It’s important to note that Gen Z is coming right up behind which really starts to play into how firms develop their culture and organization.  

The top-level leadership roles in organizations are currently held by Gen X, nearly 70%, but the study reveals that in the first to lower-level management, the younger generations are beginning to take over a lot of those positions. This is great because firms are starting to see new thoughts, new processes, modernization, and a lot of variety and diversity. A&E firms will continue to see this trend in terms of those generational shifts to the younger generation from a management perspective which will affect recruiting, retention, and talent development.  

Top Tools Used to Develop Talent 

Firms cited coaching and mentoring, external education programs, and leadership development programs as their top three tools used to develop talent. The very top method is coaching and mentoring. Firms should ensure that coaches and mentors are available to make the best impression on employees. Firms should not just rely on who has been at the firm the longest for choosing their mentors and should make sure that these mentors are equipped with the right skills to bring other staff along.  

Engaging Employees Too Late 

The Clarity study showed that 86% of firms conduct exit interviews, but these interviews are often too late. Many times, these type of exit interviews are not as effective for getting honest responses from the employees because they are simply trying to get through the exit process and leave the firm. Unfortunately, many firms are spending a lot of time on this strategy rather than on other strategies such as stay interviews or pulse surveys.  

Only 30% of firms conduct pulse surveys. Pulse surveys are quick hit surveys where the firm can get answers. They can be sent to the recent hires on their onboarding experience, for example. The idea is to gauge the pulse in real time throughout the course of the year.  

Dig Deeper into the 43rd Annual Deltek Clarity Report 

To get more details on A&E firm HCM trends or other interesting findings, download the full Deltek A&E Clarity report. Click the image below to grab a free copy of the report along with a scorecard to chart the firm’s results. Don’t forget to stay tuned for the second installment in this series that will share some ways firms can use this information to improve processes and help meet some of these HCM challenges. 

While A&E firms are struggling with staffing challenges, business process automation, and managing a strong backlog pipeline, the discipline of project management and project delivery performance has improved. According to the 43rd Annual Deltek Clarity A&E Study, more firms are increasing internal project financial reviews and installing a project management center of excellence.  

How does your firm compare to the A&E industry when it comes to project delivery? Below is a summary of the findings from the study and read to the end to find out how to get a free copy of the report.  

Staff Shortages Affecting Project Management 

Looking at the challenges, especially compared to the prior year, it’s not surprising that staffing shortages and competing priorities are high on the list. However, staffing shortages were 40% last year and now are at 64%.  

The respondents were asked to rank their top three challenges. Those top three centered all-around staffing – 1) staffing shortages, 2) competing priorities, and 3) inexperienced project managers. These challenges may lead to burnout, more frustration or other challenges for the teams. Project managers are not focused on proactively managing their project because they are spending time figuring out how to get the work done.  

Improved Project Delivery Performance, in Some Areas 

Project delivery performance has improved with projects that are at or under budget. Those projects currently being reported as under budget went up almost six percentage points from prior year to 67.8%. However, the eight-year trend is showing a move in the wrong direction. Plus, on the schedule side, things aren’t looking as great with a decrease of more than six percentage points from prior year. The common theme from the project managers seems to be they are struggling the most when it comes to managing schedules. Schedule is the metric that is tracked the least and doesn’t have much visibility.  

These gaps in staffing and lack of visibility into project performance are affecting not only project managers, but the firms’ bottom lines. What new challenges are your project managers facing today? What’s being driven by clients and what internal processes or technology can be deployed to improve visibility and efficiency? 

Increased Emphasis on Project Management as a Discipline 

There were huge gains in the percentage of projects that follow a clearly defined project management process. In this year’s report, 44% of the respondents indicated that 75%-100% of their projects used a clearly defined project management process. Whereas, last year only 14% were in that upper tier of the majority of their projects.  

Another item the Deltek Clarity Study looks at is the project management office (PMO) or center of excellence. This year’s report indicates that this trend is moving in a positive direction. Overall, 15.4% of respondents have a PMO and that’s an increase of 5.4 percentage points over prior year. Leading the way are the large firms with 50% of them indicating they have a PMO up 20 percentage points from prior year. Though at 15.4%, that’s still less than a quarter of the companies that are using some kind of PMO or center of excellence to treat project management truly as a discipline. 

One of the things that’s important when it comes to project management is to celebrate when projects are going well. Firms often get wrapped up in the projects that get off course or fall behind schedule. Fortunately, the study does measure what’s going well in project management, and at the top of that list is managing client relationships with collaboration and communication.  

However, there’s still a majority of the respondents that don’t have a clearly defined project management process for all or even most of their projects. It’s a good opportunity to ask internally why aren’t processes being followed? Is there not a clearly defined process? Are the processes not aligned with the different types of projects the firm does such as small vs. large or task-order vs. lump sum? 

Proactive and Accountable Project Management Metrics  

What gets measured gets done, correct? The Deltek A&E Clarity report asks what project management KPIs are being tracked at the firm.  

At the bottom of what is being tracked are some of the scheduling metrics including estimate at complete, on-time delivery, and earned value management. At the top of the list are those KPIs often tracked by the financial leaders and include net revenue, profitability, average collection period for A/R aged and multipliers. Yet the financial metrics are retroactive. This might indicate that the lack of visibility or tracking for schedule and schedule variances might correlate with the increase in projects going behind schedule.  

Firms should be asking what metrics they should be tracking that can help them to right size or fix what may be going wrong in a project. How can firms make sure the project managers have the information they need to see where their projects stand at any given time? How can the information be visible and accurate? 

Making the Case for Project Management Technology 

While firms are moving more and more towards technology, the reliance of manual data entry and spreadsheets is going in the wrong direction, specifically when it comes to project management. At the top of the list of departments relying on manual entry is operations and resource management.  

The Clarity Study found that 61% of firms say that they’re still using Excel for planning projects and resources. 75% are using email as their primary project collaboration tool, and 88% are still using email as a primary method to share large files both internally and externally. 49% are not using construction specifications technology.  

All of these are ripe for business process improvement and better leveraging of technology for efficiency, but just where are firms planning to invest in this technology? Project management is at the top of the list, with nearly half of the respondents indicating that they will invest in project management technology in the next 12 months. 

Top Initiatives for Project Management 

When you look at the challenges and top initiatives for project management at A&E firms, issues such as hiring more qualified staff, defining capabilities and responsibilities as well as defining internal best practices and investing in internal project manager training are not surprising. Firms know they need to have great project managers.  

Use These Findings to Improve Your Firm 

The immediate next step is to download the full Deltek A&E Clarity report. Click the image below to grab a free copy of the report along with a scorecard to chart the firm’s results. Then use that to begin discussions around the firm’s net revenue forecasts, project budgets and schedules, etc. Ask about where the firm is struggling, where it’s doing well, and what are the opportunities for improvement. Finally, make sure that you’re reaching out to a Full Sail Partners’ consultant so that we can help you keep your business on course. 

Managing and delivering successful projects is the goal of every architecture and engineering (AE) firm. For most, it’s nearly a repeatable process that requires some minor adjustments to the work breakdown structure to meet the unique needs of a project’s scope. Year after year, AE firms continued with this same process while making improvements based on lessons learned. Then all of a sudden, everything in our world was altered, including the way AE firms manage and deliver successful projects.

However, it’s not all gloom and doom. There’s actually good news to report! According to the 42^nd Deltek AE Clarity Report, firms of all sizes dealt with the uncertainty and unexpected changes very well.

Clarity on Project Management Success    

Overall, the majority of firms that responded to the Deltek AE Clarity Survey indicated that their projects stayed on schedule with some being ahead. This is great to hear, and there is more. Most of the respondents also indicated that projects remained on or under budget in 2020. This is a consistent result year after year in the AE Clarity Study findings. As 2020 was filled with uncertainty with no clear end in sight, staying on or under budget is an amazing accomplishment. Kudos to those firms!

Clarity on Challenges for Project Managers

Interesting enough, it is hard to link the effects of the pandemic to the findings in the Deltek AE Clarity Study. Overall, project status visibility issues continue to be reported as a common challenge for project managers over the past few years. Furthermore, visibility into project cost variance remains a top reason for not being able to identify project overruns before it is too late.

Highlighting other challenges AE firms experienced in 2020, tracking project KPIs continues to hinder project managers and jeopardize the successful outcome of projects. This is followed by schedule variance visibility, which only had a small upward change from previous AE Clarity Study findings. In summary, project visibility issues remain problematic but can be easily resolved by using a project management software built specifically for AE firms.

Clarity on Client Satisfaction

Mentioned, but less of a focus for project managers, is visibility into client satisfaction throughout the project life cycle. In the survey, only 40% of firms stated that they measured and tracked client satisfaction. What makes this troubling is that it is a fact that the client experience (CX) and client satisfaction has a direct impact on the ability to win future work.

For many firms, this is an unaddressed problem because they have neither a formalized CX initiative nor a solution to help track client satisfaction. This is likely because these firms are unaware that there are resources to improve their CX. Full Sail Partners is an active partner with Client Savvy, the creators of the Client Feedback Tool and the CXPS Community and can help firms to acquire these needed CX resources.

Clarity on Future Project Management Initiatives

AE firms historically have embraced a business model that forces project managers to wear multiple hats at the firm. However, this seems to be changing with more firms stating they want to:

• Clearly define responsibilities for project management, business development and design work.
• Invest in internal project manager training.
• Develop internal project management best practices.

Surprisingly, all respondents to the AE Clarity Study indicated one of these as a top priority at their firm. Further down on the list of the top initiatives for AE firms is the need to hire more qualified talent. Noted in the Human Capital Management section of the AE Clarity Study, firms stated that the availability of good talent is a top acquisition challenge.

AE Clarity on the Future of Project Management

AE firms looking for future success have recognized the need to pay more attention to the discipline of project management. Moving forward, project managers need to focus on delivering successful projects. Firm leaders need to find others to share or take on the work of business development and let designers focus on creating. In other words, firms need to give the discipline of project management the respect and attention it deserves.

The Light at the End of the Tunnel

With all the uncertainty of 2020, AE firms remained resilient when faced with adversity. This says a lot about an industry that is directly affected by economic ups and downs. Overcoming what could have been an industry crippling situation, firms adapted, and project managers stepped up to continue to deliver great projects.

The Deltek AE Clarity Report is an insightful study that firm leaders should review each year. Additionally, firm leaders should use the available scorecard to benchmark their firm’s results with the rest of the industry. Get a free copy of the Study and the scorecard using the button link below.

Starting with the obvious, all departments and roles at AE firms were directly impacted by the global pandemic. This is emphasized in each section of the 42^nd Deltek AE Clarity Study. However, the Human Capital Management (HCM) segment highlights another challenge firms are facing – a multigenerational workforce.

Today, an AE firm’s workforce can include members of up to four generations. This infusion of differing opinions about professionalism, work-life balance, and overall expectations of an employer has pushed many company leaders to shift their culture to embrace these differences. While some firms have accepted this multigenerational workforce, others have chosen to keep up their traditional methods – until now.

When the COVID-19 global pandemic struck, expectations of flexible schedules, more casual work environments, and telecommute options were thrust upon everyone without warning. Even those that were steadfastly against the idea of hybrid workers. Now, we are at the crossroads of two seemingly unrelated challenges that have a common solution, and the pros and cons of this evolving workforce dynamic are highlighted in the 42^nd Deltek AE Clarity Study.

New Human Capital Management Challenges

Great workforce management requires consistency, which is everything that work, and life hasn’t been since 2020. As a result, this imbalance has created a new leading challenge for AE firms in terms of HCM. According to the 42^nd Deltek AE Clarity Study, succession and career development planning jumped to first place from third place in the previous study. Subsequently, performance management and employee engagement fell to second and third place.

On the surface, these challenges are expected in the given circumstances. Taking a deeper dive, learning and development programs ranked fourth overall and was considered a top three challenge for forty-eight percent of survey respondents. Looking below the surface, succession and career development planning, and learning and development programs are closely linked. Therefore, it’s logical that the increase in ranking in both these challenges goes hand in hand.

Employee Turnover and Staffing Levels

Overall, survey respondents reported that employee turnover rate went down over one percent. This may seem like a small change, but it goes against trends documented in past surveys. In previous years, AE firms reported increases in employee turnover rates. Likely because of the strong economy. Since 2020, it has been likely that employees preferred to stay with their existing employer for stability instead of taking a leap of faith with a new company during uncertain times.

In terms of personnel growth over the previous year, firm respondents stated that they had an increase of 0.5% which is nearly 3% less than reported in the 41^st Deltek Clarity Study. This is likely the result of hiring freezes during uncertain times. Additionally, thirty-three percent of firms reported having more open positions at the time of the survey and fifty percent had fewer open positions. Encouraging is the fact that forty-eight percent of respondents state the reason for open positions is solely because of firm growth.

Talent Acquisition Challenges

One of the least surprising findings of the 42^nd Deltek AE Clarity Study is that the availability of good candidates in the marketplace once again ranked number one in terms of top talent acquisition challenges. The simple cause and effect assumption is to connect this finding to the decrease in employee turnover rates and other factors like uncertainty about the future economy. But what impact will the pandemic and a new hybrid workforce has on talent acquisition challenges.

For years, firms have competed for talent within their local geographies. However, the global pandemic has allowed firms to embrace their evolving workforce, and employee can be an effective member of the team whether they are at the office or at their home. When taking into consideration the changes created by the pandemic, the challenges of the past, such as matching qualified candidates to open positions and offering competitive compensation will likely become minute in comparison to the other challenges listed in the Clarity Study.

Focusing on Managing and Retaining Talent

Providing a clear career path with training goals and milestones helps keep employees engaged and ultimately retain talent. For AE firms, this strategy helps them plan for the future to make sure the firm can remain successful. Apparently, this is no secret. Respondents to the 42^nd Deltek AE Clarity Study overwhelmingly ranked create or improve succession and career development planning as a top initiative. Closely followed by developing more formal career development programs. Being leading areas of opportunity for improvement, these initiatives and the others that are highlighted in the 42^nd Deltek AE Clarity Study are things firms should evaluate closely.

Clarity for the Future

Reflecting back, it’s impossible to avoid including the impacts of the global pandemic on businesses. For human resource professionals and AE firm leaders, they sure got the “short end of the stick” with having to adapt and quickly create policies to ensure business can continue as normal and employees are aware of the new expectations. Fortunately, the world is getting back to some sense of normality and those tasked with overseeing their firm’s HCM strategy can get back focusing on hiring and retaining talent, and developing training and succession plans.

During the onset of the COVID-19 pandemic, businesses across all industries were forced to make quick and decisive decisions. For A&E firms, determining the best plan to keep projects profitable and on schedule became the priority. While many departments were able to quickly adjust to working from home and figuring it out as they went, finance leaders had to determine how to maintain financial controls immediately. The 42^nd Deltek A&E Clarity highlights the success of these efforts in addition to providing some insights on other key financial metrics.

Numbers that Improved

Across the board, A&E firms of all sizes had increased utilization rates in comparison to the previous year. With small firms reporting a little over two percent increase and large firms showing over a one-percent increase. While this increase seems small, it’s actually significant when viewed as a change over a one-year period. Additionally, net revenue per employee also increased for A&E firms of all sizes. When looking back over the last year and comparing other relative information, it’s reasonable to link this improved utilization rate to the fact that firms had minimal growth of personnel. Meaning existing employees are being worked more and firms need to be aware of the negative effects of employee burnout. Make sure to learn about exception reporting and how this can help identify employees that are at risk of burnout.

The overhead rate for A&E firms dropped in comparison to last year which can be linked directly to the decrease in travel and other in-person related expenses. Obviously, this can be attributed to restrictions created by the pandemic, but it also leaves room to wonder if this can be maintained in the future as the world transitions to the “new normal.” Which itself is still unclear, many are predicting a hybrid variation of a remote and in-person work environment. This is even highlighted in the 42^nd Deltek A&E Clarity report as something firms need to evaluate in the future.

The largest indicator of success is the firm’s earnings after all operating expenses are taken out which is referred to as the operating profit on net revenue. Unsurprisingly, A&E firms that responded to the Deltek A&E Clarity survey overwhelmingly indicated an increase with small firms reporting an eleven percent increase over the previous year. Looking back to overhead rate, the pandemic related changes firms were forced to make is a clear connection between these two numbers making it difficult to determine if this will be sustained in future years.

Numbers that Suffered

While success is easy to celebrate, shortcomings also need to be reviewed and given attention. Starting with the net labor multiplier, firms that responded to the 42^nd Deltek A&E Clarity study reported a decline to a minimal increase. Which actually breaks a ten-year trend and reverted net labor multipliers being realized by firms to similar rates of five and six years ago.

An A&E firm’s most consistent indicator of operating performance is the total payroll multiplier. On face value, the total payroll multiplier remained unchanged from the previous year which seems like a win. And might as well be when considering the challenges firms were presented with as a result of the pandemic.

Future Financial Initiatives

Across the board, respondents to the 42^nd A&E Deltek Clarity study stated their top priority is business process improvements which is a consistent leader year after year. Furthermore, this seems like a vague statement that lacks an actual plan action and is likely the yearly list leader for this reason. With all the adversity firms faced throughout the last year, it might be a good time to start implementing a business process improvement plan by first mapping out firm processes to see how these changes have impacted firm operations.

Further down the list of financial initiatives firms wish to address are better managing growth, organizational change, and increasing spending for talent acquisition and retention which are ranked fourth, fifth and sixth respectively. Lumped together, all of these are a component of human capital management. From an employee perspective, this is promising to know that A&E firms are realizing that their value proposition is their people.

Gain Financial Clarity

In the face of uncertainty, A&E financial leaders buckled down by tightening finance controls by embracing technology to keep teams connected. Similar to what other departments within the firm did which is detailed in the technology trends section of the A&E Deltek Clarity report. Further, it’s exciting and promising to see that A&E firms weathered the initial impact of the pandemic fairly well. While the future still has some uncertainties, A&E industry has once again proven to be resilient and capable of overcoming adversity.

Benchmark your firm! Use the link button below to download the 42^nd Deltek A&E Clarity report and scorecard for free.

With the uncertainty of 2020 behind us, many AE firms are optimistic about the future and expect that investment in new technology will likely remain consistent. While a great number of firms are still in the early stages of moving to the cloud and making investments to support a mobile workforce, smaller tech savvy to large-sized firms have already implemented these technologies by 2021 and are seeking out IT solutions that improve project delivery and ultimately their bottom line. According to AE firms that participated in the 42^nd Deltek Clarity study, adopting new technologies to support firm growth and client needs is a priority, however, selecting which technologies will produce the desired results and provide a noteworthy return on investment seems to be a challenge.  

Clarity on Technology Trends for Small Firms

Small AE firms, those with less than 50 employees, reported in the Deltek Clarity study that investments in new and emerging technologies will likely see a reduction. Likely, because many of these firms made larger than expected technology investments in supporting the needs of a remote workforce to ensure business continuity during the pandemic. Therefore, many of these small firms are refocusing efforts and spending on revenue generating resources.

Furthermore, small firms typically have smaller budgets for all departments across the board. As a result, they tend to invest in new technologies that are usually more affordable and easier to deploy firm wide. Which brings up another key finding from the Deltek Clarity study – limited internal IT expertise. Small firms and even medium-sized firms both noted that one of the largest challenges with adopting new technologies is having internal experts to help navigate the sea of technology options that serve different and unique purposes. Even more, some firms are likely unaware of which operational processes can be improved with the assistance of technology.

Medium-sized Firms Looking to Go Big

AE firms with 51 - 249 employees, commonly referred to as medium-sized firms, indicated in their responses to the Deltek Clarity study that they are eyeing big data and artificial intelligence (AI) for future technology solutions to support their organizations. However, only 18% of firms reported having an actual plan in place. With a large percentage of firms citing the aforementioned and seemingly consistent theme of lacking internal champions to identify and thoroughly vet new technology. Overall, medium-sized firms as a whole are continuing to straddle between implementing less expensive and simpler technologies with big aspirations to embrace and invest in emerging technologies large firms are already utilizing.

Large Firms Seek Clarity with Big Investments

Large AE firms, defined as having more than 250 employees, will always lead the AE industry when it comes to adopting the latest and greatest technologies since they generally have larger budgets and the ability to spend. As such, larger AE firms that participated in the Deltek Clarity study stated they are continuing to move forward with making large investments in emerging technologies like geolocation, big data and data science with no indication of slowing down. More importantly, large firms revealed in the Clarity study that they have less of a challenge with employing internal technology experts that can provide guidance on future technology investments that are aligned with the needs of the firm.

Similarities Deltek Clarity Identified for All Firms

According to the 42^nd Deltek Clarity study, firms of all sizes have some shared challenges regarding technology initiatives. Unsurprisingly, data and cybersecurity lead the way like previous years and will likely continue to be the leading concern for AE firms well into the future. An encouraging finding in the Clarity study is the common strategy all firms are taking to mitigate these risks, with nearly half of respondents stating they are implementing new security policies and protocols. Even more, thirty-four percent of respondents said their firm is planning to outsource their IT administration and infrastructure. Although there are no fail proof safeguards against a cyberattack, being proactive can certainly reduce the risks which is what firms are trying to accomplish.

Do More with Technology and Deltek Clarity

One thing is clear from the Deltek Clarity study, AE firms of all sizes will have to continue to invest in technology just to stay competitive. For small and medium-sized firms that indicated they lack internal experts to help make technology investment decisions as a challenge, maybe they need to consider enlisting the assistance of a company that specialize in the technology needs of AE firms to help with these choices.

Lastly, big data and data science are quickly being adopted in the AE industry. As a result, AE firms will begin to see new technology solutions specifically tailored to meet their needs being brought to market over the next few years. Which adds more complexity for firms when it comes time to decide which technology solutions they should pursue in the future.

Overall, the majority of respondents to the Deltek A&E Clarity study shared an optimistic view about opportunities and growth potential in coming years. Conversely, the long-term effects of the global pandemic did shock the industry with handshakes and face-to-face meetings becoming collateral casualties. As a result, the loss of these interpersonal connections was far greater and impactful than many could have imagined, and this sudden mandate and frankly need to socially distance inevitably left its mark on the way people interact and nurture relationships. As a result, this year’s Deltek A&E Clarity results are that much more significant as they shed light onto the future of A&E business development tactics that firms have embraced and will likely continue to utilize well into the future.

Top Three Business Development Challenges

Finding time to nurture client relationships seems to be a list leader year after year for the A&E industry. However, the number of respondents that listed this as a top challenge grew five percent from prior years. Increased competition is second on the list with 22% of respondents putting this as their top BD challenge. While the third top challenge was identifying new prospects, with 15% of respondents listing this as their top challenge.

Interestingly enough, 14% of respondents indicated that their firm’s business development model has dedicated BD staff, 39% have a seller/doer model, and the remainder a combination of both. Even more, firms reporting having a formal business development process declined from previous years. Identifying the exact correlation on how these different BD models and lack of processes impacts these top BD challenges is difficult to measure, however there is with some certainty a direct relationship.  

Bidding to Winning

This year’s Deltek A&E Clarity study found that more firms are employing a formal go/no go process with an increase to 75.7% with 51% stating they use a formal process for all opportunities. For firms not using a formal go/no go process, 25% are considering implementing one in the future.

For small and medium A&E firms, proposal win rates decreased by nearly two percent from last year while large firms had an increase of almost two and a half percent. On the contrary, firms of all sizes saw an increase to their capture rate with a cumulative increase of three and half percent. These differences between win rate and capture rate can be attributed to the type of work firms are pursuing and the use of a more strategic go/no go process.    

Deltek Clarity on A&E Marketing Techniques

Respondents to the 42^nd Deltek A&E Clarity study indicated that they predict traditional marketing techniques like in-person trade shows and exhibits, and public relations initiatives will see a sharp decline in utilization with a transition to more modern techniques. Specifically, firms stated they will increase the use of client-specific marketing, social media, thought leadership and content marketing as the core to their overall marketing strategy. This is not to say that trade shows will be abandoned, but these will likely become more virtual and/or hybrid versions which can reduce their benefit and importance to A&E firms. Overall, it’s encouraging that A&E firms want to adopt more modern marketing techniques, but their willingness to make significant investments into these changes has yet to be seen.  

Deltek Clarity on the Future Outlook and Forecast of A&E Industry

Small firms expressed a bullish outlook when reporting on their revenue growth forecast while medium and large firms expected to experience gains in the coming years. When asked to look further out to nine years, respondents expected to see growth of five to six percent in most years indicating there is still some level of uncertainty in the market, but still being sanguine there will be an upward trend in the years to come. Generally, A&E firms are optimistic about the markets they serve and believe they will be able to increase their position within them.

Significant Deltek Clarity Business Development Findings

In summary, the 42^nd Deltek A&E Clarity study found that firms are going to need to continue to rely on passive sources for new opportunities which will require nurturing existing client relationships to win more work from them and to gain referrals as well. Firms will also need to embrace business intelligence tools and strategic business development models and processes to remain competitive. Additionally, the pursuit process itself has changed and became more virtual and digitized. As a whole, A&E firms have recognized the need to revolutionize their business development strategies if they want to remain relevant and viable in the future.

Understanding the full business development findings of the 42^nd Deltek A&E Clarity study truly requires comparing the results to one’s own firm. Make sure to download your free copy and use the Clarity Scorecard to benchmark your firm.

Simply stated, strong client relationships are fundamental for thriving professional services (PS) firms. Therefore, proactively creating a positive client experience (CX) should be at the core of a PS firm’s mission. As simple as this effort may seem, many firms fall short in terms of meeting client expectations which inevitably becomes detrimental to their bottom line. However, there has been an influx in forward looking PS firms that are now dedicating resources to CX.

With this rapid growth and interest in CX for PS firms, the creation of a community dedicated to connecting likeminded individuals and firms has risen. CXps is the only client experience association dedicated to professional services firms. What once began as an annual conference has now evolved into so much more. The CXps community is now a nationwide network that offers monthly virtual meetups, regional in-person events, a rapidly growing library of CX content and so much more.

As a client-focused firm, Full Sail Partners is a dedicated partner of the CXps community with several members of the staff actively participating in the network and others joining this year. Furthermore, the 2021 CXps annual conference was hosted virtually from May 25^th to May 27^th. During this year’s annual conference, trends and ideas were presented and breakout sessions allowed attendees to collaborate and share their perspectives. Additionally, Ryan Suydam with Client Savvy discussed the evolution of the CXps community and the future outlook of this rapidly growing network of CX professionals. If you are wondering what you missed, here’s what some of the Full Sail Partners’ crew members had to say about the CXps annual conference and community.  

“As a CXps newbie, I learned a lot!”

As a first timer, I have long understood the necessity for firms to ensure a good client experience, however the 2021 CXps virtual conference was the first time I was introduced to the idea of firms actually focusing on the concept of CX in their overall business strategies. During the small group breakout sessions, I was able to discover several things about CX. First, firms appear to always be seeking to increase profits whether they consider themselves to be mission, vision or purpose driven, therefore CX is significant for that reason alone. Next, that employees, no matter what level, need to have a good employee experience (EX) in order to facilitate a good CX. We also learned that a great story about a positive experience goes a long way in CX and encourages both employees and clients to be loyal to the firm. Attending this virtual CXps conference offered me new insight and perspective on the real complexity of CX.

              – Jennifer Renfroe, Marketing Associate

“The CXps conference is one I look forward to every year!”

The Client Savvy team did an excellent job revamping the traditional conference format into a truly virtual experience. In this experience, you worked hands-on with a community of peers to build your CX program together.

One session of the conference took us through making the business case for a CX firm initiative. We were inspired by Ryan Suydam to “win the heads” of our firm leaders to begin a CX program. Then we broke into small groups to discuss the challenges/opportunities of how a managed CX program can create value for our specific firm. We were provided a list of different options that ranged from easier ones like pricing our work to value, not market, and reducing non-value-added project work to more advanced methods like increasing share of wallet with clients and measuring client lifetime value. We were asked to pick one or two ways we can demonstrate the value that a managed CX program could provide.

During another session, we were challenged to “win the hearts” by using stories. Our firms have dozens of stories like the one great story of how a client was won or kept through extraordinary conditions. Andrea Mac from Prequal, LLC showed us how CX stories can optimize the value of client experience initiatives among colleagues and leaders. Again, we broke into peer groups to begin developing our story element library and how to use them.

The best thing about the CXps virtual experience was that it took somewhat nebulous ideas of client experience and put a framework and system around it. And, when you can do that, it helps A&E firms develop and grow a proactive and thoughtful client experience program at their firms.

– Lindsay Diven, CPSM, Blackbox Connector Sales and Marketing Manager

“Being a member of the CXps community gives you access to a wealth of knowledge!”

I’ve been participating in the CXps community for over a year after joining the 2020 annual conference. My first conference and the 2021 conference were both outstanding with great presenters. Whether it was your first time being exposed to CX concepts, or if you are a seasoned CX veteran, the conference has an incredible depth of knowledge for all experience levels.

Additionally, as a member of the CXps community, you are able to access the knowledge base that the Client Savvy team continues to grow and fill with reliable informational resources and contributions from members of the community. I personally contributed last year by creating a video, “How Marketers Can Use Client Feedback” for the Knowledge Sharing Modules (KSM) which Client Savvy releases on a monthly basis. Make sure to check out all the KSM sessions on their YouTube page.

This year, I’m looking forward to the regional meetups. During the “Making CX Happen” regional events, CXps community members will meet in-person to explore challenging CX problems PS firms face. I’m also a sucker for Ruth’s Chris Steak House.

– Ryan Felkel, Marketing Manager

It’s Never Too Late to Join the CXps Community

Did you miss the 2021 CXps Conference? No worries! You can join the CXps community whenever you’re ready to take the first steps to improving the client experience your firm delivers. There are several levels of membership, and your level of commitment and participation is completely up to you.