Market Watch

Funds to Flow in Texas, Tennessee, and Minnesota

A roundup of the latest construction funding news includes billions for projects in Texas, Tennessee, and Minnesota and concerns for the Infrastructure Investment and Jobs Act (IIJA):

Lone Star bond bonanza

On May 6, voters across Texas passed bond measures that authorized billions of dollars for K-12 school construction and renovation projects. In metropolitan Houston, voters in the Fort Bend Independent School District (ISD), the state’s sixth-largest school district, approved $1.2 billion for infrastructure and technology projects, while $3.4 billion in bond measures passed in 15 metropolitan Austin school districts, including $698 million for the Leander ISD. K-12 construction bond measures that passed in Dallas County included $1.1 billion for the Garland ISD, $716 million for the Carrollton-Farmers Branch ISD, and $539 million for the Irving ISD. Outside Fort Worth, Northwest ISD voters approved $1.9 billion in funding for 12 new schools and three new high school stadiums, while Crowley ISD voters agreed to $948 million to fund eight new schools.

Minnesota makes history

Before concluding its 2023 session, the Minnesota legislature passed the biggest capital investment package in the state’s history. The $2.6 billion infrastructure bill, which will fund hundreds of capital improvement projects, included $501 million for water infrastructure, $402 million for transportation, $317 million for higher education facilities, and $247 million for natural resources and park projects.

Tennessee decongestant

Facing a $26 billion backlog to address traffic congestion issues resulting from a booming population, Tennessee lawmakers approved legislation that authorizes the Tennessee Department of Transportation (TDOT) to enter into public-private partnerships to design, build, finance, operate, and maintain new toll lanes on existing urban interstates. The $3.3 billion Transportation Modernization Act also expands TDOT’s existing alternative delivery tools such as design-build and CM/GC.

IIJA funding squeeze

Inflation is taking a bite out of funding authorized by the IIJA. According to an Eno Center for Transportation analysis, highway construction costs soared 50% from December 2020 to September 2022—in large part due to the rising cost of oil, which is used to manufacture asphalt and operate machinery. That construction cost inflation resulted in a $21.5 billion loss in buying power for the Federal Highway Administration during that time period. 

Technology Corner

Deltek Study Highlights Tech Challenges, Opportunities

Manual labor

Beyond reporting on another banner financial year for the AE industry, the 44th annual Clarity: Architecture & Engineering Industry Study—which was released in May by software provider Deltek—offered a snapshot of AE firms’ technology use. One finding is that the AE industry remains reliant on manual data entry for many job functions. While 81% of respondents were completely to moderately reliant on manual data entry for administrative and management functions, those numbers were nearly as high for operations and resource management (74%) and accounting and finance (72%). The numbers suggest that opportunities exist for most architecture and engineering firms to reduce inefficiencies and streamline workflow by automating data entry.

Passive power

The study found that technology services are a profit center for a growing number of AE firms—but still a distinct minority in the industry. Only 17% of surveyed firms offered revenue-generating technology services, while an additional 6% said they were considering it. The most common service offering among those AE firms was technology consulting (59%), followed by application development (37%), smart buildings/smart infrastructure (33%), and digital twins (18%). Only 8% reported that their technology services earn passive income through recurring subscription revenue. “The power of passive income from recurring revenue streams stands to be a game-changer for firms who previously relied almost exclusively on project-related, transactional revenues and should be explored further,” the study concluded.

Cost conscious

Cost was the top technology challenge cited by surveyed firms. More than half (57%) of respondents ranked rising technology costs among their top three challenges. Nearly one-third (29%) of small firms ranked it as their number-one concern, up from 26% the prior year. The second-greatest challenge cited by firms was prioritizing which technology trends are the most applicable. Among large firms, the top technology challenge (cited by 26%) was educating employees about trends and their applications.

The New Workplace

Now Hiring: Employee Experience Managers

Number five with a bullet

When LinkedIn released its 2023 list of the 25 fastest-growing job titles over the previous five years, a new entry cracked the annual ranking for the first time in a lofty fifth-place position—employee experience manager. As companies struggle with the post-pandemic threats of worker burnout, the Great Resignation, and maintaining corporate culture in hybrid and remote workplaces, some companies are looking beyond the HR department for help. “The rising number of employee experience managers is an acknowledgement that traditional HR managers have had their hands full managing COVID-19 workplace protocols, the shift to remote work, and the return to office,” reported the Wall Street Journal.

Support staff

What are the responsibilities of employee experience managers? According to LinkedIn, “Employee experience managers oversee processes that support employee engagement, well-being, and development within an organization, which may include training programs and mentoring initiatives.” 

Beyond HR

Employee experience—or“EX”—managers are tasked with improving not just staff engagement but also worker productivity, performance, and retention—a particular challenge for AE firms facing burgeoning backlogs and a tight labor market. Along with onboarding new employees, organizing training sessions, and implementing and analyzing employee surveys, employee experience managers move beyond traditional HR responsibilities into more strategic realms. They track and analyze project workflows, interview employees and examine how they can work more efficiently, run virtual workshops to instill corporate culture in remote workforces, and monitor staff for signs of burnout.

“EX” factors

LinkedIn reports the top locations for hiring EX managers are New York City, San Francisco, and Los Angeles. The position, which commands an average salary of $55,000 to $125,000 depending on the industry, skews heavily female. Men account for only 17% of employee experience managers. The most common roles EX managers transition from are office manager, human resources business partner, and program manager. 

Searching for an external Board member?

Our Board of Directors candidate database has over one hundred current and former CEOs, executives, business strategists, and experts from both inside and outside the AE and Environmental Consulting industry who are interested in serving on Boards. Contact Tim Pettepit via email or call him directly at (617) 982-3829 for pricing and access to the database.

Are you interested in serving on an AE firm Board of Directors? 

We have numerous clients that are seeking qualified industry executives to serve on their boards. If you’re interested, please upload your resume here.

Weekly real-time market and industry intelligence from Morrissey Goodale.

Read Newsletter

The AE industry’s weekly go-to source for the latest information on M&A deals and trends.

Read Newsletter

Bringing you snapshots of key market sectors, business management ideas, and must-know information for managing and leading your firm.

Read Newsletter

Brining you new ideas for impacting people performance including the latest on company culture, work-life balance, time management, developing next-generation leaders, and new management ideas being implemented in other industries.

Read Newsletter

An insider’s look at the latest trends in attracting, recruiting, retaining, and hiring people in the competitive AE industry.

Read Newsletter

A guide to help you better understand how AE firms are valued and – perhaps more importantly – what you can do to build value now.

Read Newsletter

Overviews on what industry consolidation means and forecasts for where activity, deals, and pricing is headed.

Read Newsletter

At-a-glance snapshots of key market indicators in various market sectors and geographies.

Read Newsletter

Achieve goals and outcomes and reshape your future!

Purchase Today!

Subscribe to our Newsletters

Stay up-to-date in real-time.