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AE Industry Dashboard > Volume 13 issue 2
AE Industry Dashboard: Volume 13, Issue 2
Bringing you snapshots of key market sectors, business management ideas, and must-know information for managing and leading your firm.
In This Issue
Market Watch
Technology Corner
The New Workplace
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.
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