Full Sail Partners Blog | Deltek Clarity Report (3)

Projects are the bread and butter of A&E firms and well executed ones are an absolute necessity to remain competitive. Based on the results of the 41^st Annual Deltek Clarity Report, A&E firms are aware of the need for project management responsibilities to be more clearly defined. Project information processes must be improved and there should be more investment in project manager (PM) training. Additionally, PMs require more visibility into KPIs to meet performance expectations. Here are some snippets from this year’s report.

Project Management Challenges

The 41^st Deltek Clarity Report showed the top three project management challenges facing firms to be the same for the third straight year. Those challenges are inexperienced PMs, staff shortages and competing priorities. PMs are at the center of project management, so they need to be better trained and be knowledgeable of firm and industry wide best practices. For firms to deliver successful projects, PMs across all projects should be keenly aware of their responsibilities. They should also become experts in their practice and to bring in other members that complement the team.

Project Status

According to this year’s report, the number of projects that came in on or under budget is slightly higher than last year. With a six-percentage point increase to 72% for architecture firms and high performers coming in with 75% of projects on target or under budget, project status appears positive. Additionally, two-thirds of projects were recorded as being current or ahead of schedule which is up two percentage points from last year. Visibility into project financials and KPIs plus targeted PM training positively impacts project execution.

Tracked KPIs for Project Management

In the survey, and consistent with last year, most A&E firms track profitability (92%) and net revenue (91%). Next is average collection period (87%) and multipliers (80%). The least-tracked KPIs remained on-time delivery, schedule variance and earned value management. The report again indicated, based on these findings, that there was a need for greater project visibility. Increasing efforts to track those KPIs would in fact improve project success, business performance and client satisfaction. In particular, the failure to track schedule variance would be reflected in the percentage of projects determined to be behind schedule.

Measuring Client Satisfaction

Based on the 41^st Deltek Clarity Report, 54% of surveyed firms do measure client satisfaction. The majority of those which are not currently doing so are considering it for the coming year. Engineering firms are more inclined to evaluate client satisfaction, and the larger the business, the more likely it is considered. Of those firms that measure client satisfaction, 58% do so for all projects. Firms use a variety of means such as in person to electronic surveys. While the executive team is usually in charge of contacting clients (50%), large firms rely on the PMs (56%) to monitor client satisfaction. Lastly, firms that do not regularly measure client satisfaction will not be very effective with process improvement.

Well Executed Projects

As seen in the 41^st Annual Deltek Clarity Report, A&E firms understand that improving project management training and providing access to KPIs will lead to improved project performance. Additionally, leveraging tools to streamline project delivery and investing in both PMs and the whole project team will make the process much more efficient. When projects are well executed, clients are likely more satisfied, and firms earn repeat business. This ultimately keeps firms competitive in the A&E industry.

“The only constant in life is change.” In the business development world, truer words have never been spoken. The 41^st Annual A&E Deltek Clarity Report was conducted at the beginning of 2020 and shows how companies performed during the 2019 fiscal year. Since then, much has changed in the world. The United States is officially in a recession - defined as two consecutive quarters of negative economic growth. Recessions in the A&E industry have proven to be a high-pressure exercise in change management. So, what can we learn from the Clarity report and also from previous recessions in the A&E industry?

Business Development Trend Challenges

The Clarity report showed that challenges from a few years ago remain the same. Time is always a challenge, especially finding time to nurture client relationships. Competition for work continues to get tighter and many firms still struggle to identify new prospects. The A&E industry is overall accustomed to in-person interactions. That dynamic has changed drastically in 2020, requiring firms to identify new ways to develop connections and build relationships.

Getting into Position

Firms that participated in the study were asked to share in which markets they expect their firm’s position to grow, tread, or decline. Over the next 18 months, the transportation market takes the lead at 67% of firms expecting to grow there. Next up is the water/wastewater/stormwater market, followed by the health care market. Firms can remain flexible and be ready for a market shift given the election year and the global pandemic. Market research is always important, and now proves this notion even more.

Tracking the Hit Rate

The Clarity report shows that there’s room for improvement in how firms can use hit rate as a valuable metric. The six-year trend has varied from a 40% - 50% hit rate. Recently, more small and medium-sized firms have formalized a go/no go process, but consistency may be the biggest challenge. Formalizing the system can streamline processes, dedicate resources effectively, and drive the hit rate up. Firms should push business development teams to focus on quality of pursuits, rather than quantity. This is even more important when resources are limited to avoid burnout.

Bringing in the Work

As seen in the 41^st Annual Deltek Clarity report, most roles within a firm have some level of responsibility for business development. Executive teams take the lead on the responsibility along with business development staff if that is an option. Marketing groups seem to lead some efforts and the seller/doer model is common in A&E firms. Regardless of who is bringing in the business, only 41% of firms have a formal business development process. Streamlined processes could ensure teams are working efficiently and communicating effectively.

As part of broader marketing efforts, the study asked about marketing techniques for the first time. The survey showed social media posts are the primary marketing technique used by 87% of firms. Traditional trade shows and exhibits are a primary technique for 65% of firms. From there, thought leadership and content marketing are of importance as this showcases the industry experts. This will be a good one to track year after year to see where the trends take us. The survey also asked about the importance of these techniques over the next five years. Social media remains at the top, followed by thought leadership. Trade shows and exhibits surprisingly bump down to the number four spot. In today’s marketing, focusing on your online presence is even more critical.

The Outlook for Business Development

Change brings opportunities. Now more than ever, business development teams should concentrate on strategic planning to narrow in on how to refocus existing business opportunities and develop new business prospects. Firms focused on being flexible and adaptable will continue to flourish in our ever-changing world.

Every year, Deltek collaborates with ACEC, ACEC Canada, AIA and SMPS to conduct a study to measure the health of the AE industry. The 41^st Deltek AE Clarity Report provides a comprehensive assessment of the 2019 performance of AE firms. Furthermore, the study collected responses from more than 415 firms of all sizes within the AE industry. While many of you will eventually read over the findings, here is a summary of what you will discover in detail.

Clarity on AE Technology Trends

With no surprise, technology is a leading focus for AE firms. It seems like this is a trend every year, and it is now becoming even more important for AE firms to invest in technology to be competitive. Surprisingly, augmented and virtual reality is driving a deeper interest into technology investments for AE firms. Even more, firms that have been challenged by the costs of emerging technologies are finding them more affordable as they become more mainstream. According to responses from the Deltek Clarity survey, firms have accepted that the cost of investing in technology has a significant and beneficial impact on the efficiency of their operations.

Clarity on Financial Statements

2019 proved to be another great year for the AE industry in regard to financial performance. The report explains that over the past 10 years, the financial stability of the AE industry has remained strong and has shown growth. While many of the core metrics measuring financial strength demonstrate small changes from year to year, the changes are continuously positive. A significant finding is that operating profit on net revenue and net fixed assets per employee did rise in 2019. Furthermore, the benchmarks for operating profit on net revenue and net labor both surpassed the high performer thresholds which backs the findings of financial stability in the AE industry.

Clarity on Business Development

This section has some interesting findings. Win rates were down and so was revenue from the firm’s top three clients. However, there may be some factors that can explain these results. Is it because firms are lacking a formal go/no go process to improve new business pursuits, or are firms pursuing business in new markets? Are your firm’s top three clients doing less work? Perhaps it is a combination of all these things. But one thing remains certain, that business development continues to be a challenge for AE firms.

Clarity on Project Management

What, what, what? The 41^st Deltek Clarity Report found that AE firms, which are project-based businesses, have recognized they need to improve their project management capabilities. Yes, you read that right. Many AE firms are reporting they need to better define responsibilities and processes, develop better practices, and invest in project management training. How fantastic that AE firms are recognizing that project management and delivery is hindering the overall performance of their firm and acknowledging there is a need for change.

Clarity on Human Capital Management

Human Capital Management is a not a problem unique to the AE industry, and it affects nearly every profession. For AE firms, talent acquisition is the top challenge leaders face each year. Since a firm is only as good as the people it employs, acquiring and retaining top talent is essential to staying competitive. Unfortunately, talent acquisition is going to continue to be a challenge for AE firms since the number of available experts is limited. Also, AE firms continue to fall short due to lack of succession planning. This is something AE firms should evaluate as we approach a generational change and baby boomer retirements.

Learn More with the 41^st Deltek Clarity Report

For many, the Annual Deltek AE Clarity Report is a valuable tool used to benchmark the performance of your firm. It’s important to keep in mind that using this report from 2019 to compare to your current fiscal year of 2020 may give you skewed results as the global pandemic’s effects are still unseen and predicting the impact is nearly impossible. Good news though, you can still compare your 2019 results against the report findings, and Deltek plans on releasing the 42^nd Annual Clarity Report in 2021, which will most certainly shine light on the impact of the global pandemic.

Summary of Human Capital Management in 40th Annual Deltek AE Clarity Report

The results of the 40^th Annual Deltek AE Clarity Report regarding Human Capital Management (HCM) indicate similar trends from the past few years. There continues to be a tight labor market, and firms still struggle with finding qualified candidates. With the talent that they do hire, firms are working to engage their employees especially by offering better career development which ensures retention. Let’s take a look at some of the key findings regarding HCM.

Talent Acquisition Challenges

The top three challenges firms are dealing with regarding talent acquisition are the availability of good candidates in the marketplace, the ability to offer competitive compensation and matching qualified candidates to open positions. Continuously nurturing qualified talent is must in this competitive talent pool. Firms must also take a hard look at their compensation plan to ensure they can recruit the desired staff to fill open positions. Utilizing a talent management software such as Deltek Talent Management will help with these talent acquisition needs.

Issues Regarding Managing Talent

Succession planning, employee engagement and performance management seem to be the primary concerns for firms regarding managing talent. Unfortunately, the report showed that only 45% of participating firms in the survey had succession plans in place. Lower on the priority list for firms were learning and development and recognition. Both of these actually go a long way towards improving employee engagement and should be looked at more closely. Therefore, it is wise to keep in mind that performance management is easily trackable using a talent management software.

Developing Talent

It is clear from the study that firms are in fact encouraging the development of talent that they are able to recruit. 75% of firms reported that coaching and mentoring are used to develop their talent with 54% using external education programs. 80% of firms prioritize professional licenses with 77% making conference attendance a focus. With the addition of 76% endorsing professional certifications and 72% offering continuing education reimbursement, the results show that firms are interested in investing in their talent which is always a plus!

Human Capital Should be Smartly Managed

Having the best talent in place now and a plan for the future is the secret to success for any firm especially project-based firms. With the constant flux in project management, talent needs to be qualified, available and engaged. Additionally, learning and development is crucial to not only keep employees retained but to ensure that projects are run as efficiently as possible. For a more detailed look at the HCM results from the 40^th Annual Report available in the link below.

How well an engineering and architecture (AE) firm can deliver a project is core to the firm’s success. However, the 40^th Annual Deltek AE Clarity Study found that AE firms still continue to have trouble with delivering great project management. Let’s take a deeper dive into these findings and identify areas your firm can improve on in regard to project delivery.

Top Project Management Hurdles

Surprisingly, the top three challenges reported by AE firms were the same as last year. We should take note so that these challenges do not repeat themselves in next year’s study. The leading challenge firms reported was the competing priorities of project managers. This entails managing and delivering projects while also being responsible for designing future projects and tasked with business development.

Even more, the second largest challenge AE firms have experienced with project management is staff shortages. If project managers are responsible for the aforementioned competing priorities, then it is clear the firms are understaffed. More allocated staff would balance the workload, so projects can be run more efficiently. In third place, AE firms reported that they are challenged with hiring and retaining experienced project managers with firms stating that inexperienced project managers actually hinder the successful delivery of projects.

Key Area of Need for Improvement

Project status visibility was identified as a key area of need for improvement. AE firms that participated in the study identified four areas to be improved regarding project management visibility. First, cost variance from original expected cost to deliver a project needs to be monitored closer. Secondly, ensuring projects are meeting predetermined KPIs throughout the project’s lifecycle needs to be a priority. Next, schedule variance from the original and proposed plan needs to be carefully watched. Finally, there needs to be a focus on client satisfaction.

If the top three areas are missing the target, then the client is going to have an unsatisfactory experience dealing with your firm. However, client perspective can be better managed if your firm uses the right tools. One tool that can help firms ensure client satisfaction is the Client Feedback Tool. Learn more about the Client Feedback Tool and how it integrates with Deltek Vantagepoint and Vision to give your firm better visibility into its project delivery. 

Projects are Busting Budgets

AE firms reported that 29% of projects ended up being over budget. Even more worrisome, this is a 9% increase from last year’s findings. Looking more into this finding, one might wonder if those responsible for managing projects have the information to keep project budgets on track. And let’s go deeper. Firms are also reporting that 36% of projects were behind schedule and only 58% of firms reported that they are confident in project reporting accuracy. These findings show that keeping to project budgets is a clear area of need for improvement for all AE firms.

Wrapping it All Up

For AE industry employees or executives, it is common knowledge that project management and delivery is the heart of their business. To continue to succeed in an extremely competitive industry, AE firms need to take a hard look at their project management processes. The challenges and areas identified in the 40^th Annual Deltek AE Clarity Study can be easily addressed if they become a priority for firm leaders. You can check out all the details about project management challenges in the latest Clarity Study.

The 40^th Annual Deltek AE Clarity study uncovered some interesting trends regarding business development from last year. The results indicated that AE firms still are struggling to find new opportunities early enough to convert them into sales. Additionally, a large number of firms that participated in the study identified the need to be more strategic about which potential projects to pursue. Here’s a quick summary of some business development findings from the 40^th Annual Deltek AE Clarity Study.

Business Development Challenges

One of the most significant findings in the study is that firms have trouble with prioritizing time to nurture client relationships. More importantly, this is a leading challenge for the second year in a row. The seller-doer model seems to be the go-to business development method for AE firms where not enough attention is given to focusing on potential new business opportunities. If firms stay with this outdated model, this trend will unfortunately continue.

Diving deeper, the number 2 and 3 challenges firms reported are increased competition and identifying new prospects. In regard to competition, this is going to occur in any industry and this challenge sounds more like an excuse. However, identifying new prospects has a direct correlation to firms using the seller-doer model. 61% of firms stated that project managers are almost always responsible for business development. With project managers being tasked to do their core job, delivering projects, they struggle in their efforts to successfully generate new business.

Revenue Growth Forecast Findings 

Less shockingly, net revenue growth remained at 5.1% on average. This is very little change from last year. So, why is this not surprising? The findings that firms lack having a dedicated business development team pinpoint the reason for net revenue growth staying stagnant.

Another notable discovery from the study is that smaller firms continue to pursue small projects that have shorter timelines as opposed to focusing on trying to win larger long-term projects. This business development model is proving to be less effective for generating increased revenue year after year. Smaller firms should take this under consideration when making plans for long term growth.

Key Takeaways from the 40^th Annual AE Deltek Clarity Study 

Out of all the firms that participated, less than half of the firms stated that they have a formal business development process. This is astonishing since creating new business is essential for future firm growth. Even more, firms are continuing to use the seller-doer model, and as a result, project managers face the challenge of balancing expectations which can hinder the success of their projects. Learn more by downloading your free copy of the 40^th Annual Deltek AE Clarity Study.

You’ll be happy to know that the 40^th annual Deltek AE Clarity Study found that AE firms’ financial metrics increased across the board. However, what you’re really wondering is how your financial metrics matched up against the findings of the AE Clarity Study. By comparing your metrics with the study findings, your firm can see what it must do to ensure it has an even more successful future when compared to past performance. Here are some financial highlights from the 40^th Deltek AE Clarity Study.

Hurdles that Firm Financial Leaders Experience

A shocking reality to many firms is that finding and retaining top talent is becoming very costly. In fact, this challenge was introduced to the survey this year, and it was the largest one faced by financial leaders last year. To put this into perspective, it typically costs a business 1% to 2.5% of its total revenue to hire and onboard a new employee according to a study by MIT. For a firm with over $1 million in revenue a year, this is an astonishing amount.

However, there are other standout challenges firm financial leaders faced. Some of these included business development challenges such as increasing profitability and managing firm growth. But when closely reviewing the Clarity Study financial findings, human capital management issues were very common. Succession planning and ownership transition ranked as the fourth leading challenge for financial leaders.   

Key Financial Findings from the Deltek AE Clarity Study

Overall, the 40^th Annual Deltek AE Clarity Study found that the majority of firms are improving their financial performance. For instance, the study found that firms have increased their operating profit on net revenue by 1.2%. On the other hand, firms experienced only a 0.4% increase in utilization rate and a 0.05% increase in net labor multiplier.

Surprisingly, overhead rate changes affected firms differently depending on size. Whereas large firms experienced a decrease by 5% in their overhead rates, small firms reported an 11% increase. However, the increases are most likely associated with firms making investments back into their companies and their employees. Other reasons for these increases may be related to inflated office space costs and the general increase in the cost of doing business. Keep in mind, this is just a summary of the financial findings, and you will find more details in the actual report.

Finding Ways to Overcome Financial Hurdles

During the study, firm financial leaders were asked to rank their top three initiatives to overcome the hurdles they face. The majority listed business process improvement as the most important. This makes sense, as a more streamlined business process will quickly cut hidden costs. The study next revealed that firm project managers often lack financial understanding. Therefore, firms are increasing financial training for project managers to create more profitable projects. Lastly, financial leaders want to improve business forecasting which will also help with human capital management.

Benchmark Your Firm Against the AE Industry

The Annual Deltek AE Clarity Study is a great tool that allows AE firms to compare themselves to others in the industry. What makes this study so significant is that it uses information from over 700 companies of all sizes with over 2,500 individuals responding to the survey. As a result, the information contained in the study represents the entire AE industry. So, take advantage of this free study to discover how your firm measures up to the industry standard.

Technology is a huge part of any growing business and leaders are constantly searching for emerging technology trends that can drive their businesses forward. Originally, the A&E industry strayed from embracing new technology because of the time and effort it took to learn and adopt the new trends. However, firms are now identifying technology as a strategic and innovative way to educate staff, identify key initiatives, and implement incremental changes to improve business.

Top Three Technology Trend Challenges

In this year’s Deltek Clarity Survey, firms were asked about their top technology trend challenges. The results presented in the 40^th Clarity Report showed that the top three challenges were the struggles of prioritizing trends, the cost of technology, and the lack of time to learn. Other challenges included client education, lack of leadership, and buy-in from firms.

Emerging Technology Trends

For the second year in a row, firms were asked how important nine emerging technology trends were to their businesses. Lining up with the top four from last year, The Internet of Things (loT) and Geo locations ranked in, closely followed by big data and data science.

The loT is the interconnection of devices embedded in everyday objects, enabling them to send and receive data. It is important because connected devices offer the potential to better manage certain projects. The key is being able to extract and manage actionable data from the loT devices to make informed decisions.

Geo location is more prominent now than ever. Firms can leverage geo location information to make things easier for the employees and clients. Geo locations can be used to determine an employee’s location, to track how long an employee is on a job site or deliver valuable details about the client when you arrive at a project or client office. Firms can use this information to better manage projects and improve client satisfaction giving them a competitive advantage.

Application of Technology Trends

This year, firms were also asked to which areas of their business they apply technology trends. Most firms are looking at implementing these trends into projects themselves through either project management or project execution. Futhermore, more than half of the firms want to apply technology to improve their business development and marketing.

The problem is that not enough firms are seeing the value of technology and how it can improve human capital management. Potential and existing clients are wanting businesses to be tech-savvy, and those that can deliver streamlined services that use up-to-date technology will stand out from the rest. Embracing technology today can create a clear competitive advantage, while those who are not will have to play catch up later.

Top Technology Trend Initiatives

Additionally, firms were asked to identify the top three initiatives they are employing to address technology challenges in the next three years. Two-thirds of the firms identified creating a strategic plan as one of their top three initiatives, followed by educating staff and identifying and developing technology subject matter experts. With these initiatives in mind, how can firms get this information and learn from it and eventually apply it to their work forces?

First, firms just need to know where to start. Industry associations and partners are a great resource they can use to learn more about technology. Firms should not be nervous about integrating new technology into their organization because of the fear of failure. Once they gain an understanding of the technology, developing a budget for implementing these trends will become more manageable.

Learn More From the 40^th Annual Deltek Clarity Report

This is simply a summary of technology trends from this year’s report. For more details, download a copy of the 40^th Annual Deltek Clarity Report today. You may also find other topics of interest to keep your firm ahead of the competition.

Measuring your firm’s achievements and shortcomings are important to ensure continued future success. However, many firms are unsure of what factors indicate the health of their business. Also, some firm leaders believe one indicator, such as financial reports, is more important than other areas like talent management. Well, that is not necessarily the case. Let’s take a look at some of the indicators your firm should use to make informed decisions to improve business performance.  

Employee Recruitment and Retention Rates

One of the largest factors affecting the growth of architectural and engineering (A&E) firms is human capital management. Having the right people working on the right projects has a significant impact on the profitability and overall success of an A&E firm. From highlighting experienced staff members during the RFP process to actually delivering the project, talent affects all aspects of your business. Looking at recruitment rates, employee turnover rates and several other talent management metrics is essential to evaluating and measuring success.

Measuring Business Development

Wasted time on winning new business is very costly. Measuring win rates, revenue from top clients and net revenue growth will prevent wasted time. For some, this seems like a logical thing to measure, but many firms don’t track this information and they should. If you’re tracking these numbers and they continue to decline, then you know you have some major issues. You can quickly change this trend by evaluating what types of projects you’re winning and losing, and why.

Financial Metrics

Without a doubt, financial metrics are extremely important. Knowing things like total employee cost, overhead rate, and total payroll multiplier are necessary to keeping your finger on the pulse of your business. Diving deeper, measuring performance using metrics like operating profit on net revenue, utilization rate and the net labor multiplier from previous years can provide a clear picture of the performance of your firm. If these numbers slip in a negative direction, other metrics mentioned in this article could provide useful insight.

Overlooked Technology Needs

Historically, the A&E industry has been hesitant to adopt new technology. As a result, firms continue to use outdated technology that lacks the abilities to keep up with the changing A&E industry. This has become the number one hurdle for little firms to keep up with larger and faster growing firms. A&E firms need to evaluate their current technology.  Are your systems connected or is there a lot of manual entry from one software tool to another? Is your software up to date? Being behind on technology can greatly hinder your ability to even measure performance indicators.

Comparing Your Firm to Others

Ok, let’s assume your firm will measure these metrics and keep track of them. Even better, it will use current metrics and compare them to historical metrics to notice trends. However, does it compare itself to other A&E firms to determine where it stands in the industry? Well, it can. Make sure to download the Deltek A&E Clarity Industry Study to see how your firm stacks up against your competition. The Deltek A&E Clarity Industry Study is created in collaboration with ACEC, the Association Consulting Engineering Companies Canada, SMPS and AIA. The data collected comes from 386 US and Canadian firms and draws from over 250,000 data points.

Each year Deltek conducts a survey of firms in the architecture and engineering industry to identify key issues impacting the market, highlight bright spots, and forecast future trends. Guided by industry experts, the survey focuses on financial statements, business development, project management, human capital management, and technology trends. This year, in total, 952 individuals took the survey, and nearly 450 companies provided input. Firms in this study are of varying sizes and headquartered across the US and Canada.

Key Findings in This Year’s Deltek A/E Clarity Report

Financial Statements

Firms’ financial statements reveal year-over-year stability in the industry, with most impacts appearing to be driven by talent management and staffing changes.

• Average operating profit on net revenue was 13.2%, up just slightly from last year’s 13% and the previous year’s 12.8%.
• Utilization rates dropped slightly to 59.4% from 60.0% last year.
• The net labor multiplier saw a decrease to an average of 2.96, down quite significantly from a spike of 3.02 last year and back in line with 2015.
• Firms reversed a five-year decline in overhead rate, increasing from 154% to 155%.
• The average collection period dropped by one day to 71 days, although high performers increased by two days to a 67-day average.

Business Development

Firms are looking to diversify opportunities and their business development efforts to stay ahead in a competitive market.

• Net revenue growth forecast was 5.2%, down just slightly from last year’s 5.3%.
• Firms are using a diverse array of staff for business development, with 19% of firms using dedicated business development staff only, 31% sellers/doers only, and 50% using a mixture of both. However, only 46% of firms had a formal business development process for their staff.
• Win rates improved to 50.0%, rising 9.8 percentage points from last year’s 40.2%.
• The percentage of firms with a formal go/no-go process decreased from 75% last year to 67% this year.
• More firms expect growth in surveying/geographic information systems (GIS), transportation, and commercial markets than any other industry, whereas nearly 60% of firms expect their position to stay the same or decline in the residential, education, and hospitality markets.

Project Management

Firms need to continue to focus on improving the project management discipline and increasing client satisfaction.

• Two-thirds of all firms have a high level of visibility on cost variance, whereas more than half of all firms stated that they had low or moderate visibility into schedule variance and client satisfaction. Compared to last year, client satisfaction visibility decreased from 53% to 45%.
• Firms this year reported that 20% of their projects were over budget and 25% of their projects were behind schedule.
• Sixty-one percent of firms had high confidence in their overall project reporting abilities, down from 72% last year. More than 90% of firms felt confident they were accurately reporting the actual cost and budget of their projects, whereas only 69% of firms felt the same about the accuracy of their schedule reporting.
• In terms of discipline maturity, only 47% of firms used a formal project management process for three-fourths or more of their projects. Overall, 18% of firms had a PMO or center of excellence. Additionally, only 39% of firms have less than one-quarter of staff with formal project management training.
• Eighty-one percent of firms are measuring client satisfaction, and of these firms, 45% are conducting these measures for all projects and 49% for strategic projects only. The majority are measuring client satisfaction irregularly, compared to 22% of firms that do so at key project milestones. 

Human Capital Management

Firms are experiencing growth, but employee turnover—particularly voluntary turnover—has increased, making staff retention and improved talent acquisition imperative.

• Staff growth is 4.3%, declining from 6.9% last year.
• Employee turnover increased to 12.8%, up from 11% last year.
• 34% of firms had more open positions, compared with only 15% with fewer open positions.
• The average time to fill positions was 31–60 days, although for 15% of firms, it takes an average of 90 or more days to fill positions. Compared to last year, there was a 7-percentage-point decrease in firms that filled positions in less than 30 days.
• Of all firms, 43% have a formal succession plan. For 68% of firms, their succession plan applies only to current leaders and next-in-line leaders, whereas for 7% it applies to all employees.

Technology Trends

In the first year tracking technology trends, firms are looking for better ways to collect data that can be leveraged for strategic decisions.

• Geolocation and the Internet of Things (IoT) were the most important technology trends.
• Most firms did not rank artificial intelligence (AI) or wearable technology as technology trends they are focused on, but it can significantly change the way we run our businesses when the time is right.

Benchmark Your Firm with the Deltek A/E Clarity Report 

While these are the highlights of the 39^th Annual Deltek A/E Clarity study, the report goes into much more detail. Using these results, you can see how your firm has been doing not only compared to your previous year, but also to other comparable firms in your industry. With these industry insights, you can develop future goals to help your firm stand out against the growing wave of competition. For an in-depth view of everything included in the 39^th Annual Deltek A/E Clarity report, download your copy today.