Word on the Street: Issue 210

AI for the AE CEO in Houston (October) and Nashville (November)

As a CEO, you know you need to make important decisions around artificial intelligence (AI) for your AE firm. But, if you’re like many CEOs, you’re unsure about where to begin or how to proceed. Or maybe you’ve tried to get a firm-wide AI initiative off the ground but have lost your way and stalled out. It’s frustrating. We hear this time and time again from AE industry CEOs.

What you need is an expert guide, or coach, to help you break through, figure out AI, and move quickly and confidently from AI-novice mode to being an AI boss. Here are two such opportunities for you to accomplish that before the end of the year.

AI opportunity #1: Our partners, the AI brainiacs at Thrivence, have come up with exactly what you need—The AI Accelerator for AE CEOs. Here are the vitals:

• What: A highly curated AI workshop exclusively for, and limited to, 15 AE CEOs (the small group format allows for lots of one-on-one coaching by the Thrivence AI ninja coaches). 
• Where: the Wond’ry, Vanderbilt University’s Center for Innovation, Nashville, TN
• When: November 14 & 15
• Pricing: $1,750 ($1,400 when you use the code MG at registration)

At the one-and-a-half day AI Accelerator for AE CEOs on the campus of one of the nation’s leading universities in the field of AI, you and 14 other AE CEOs will immerse yourselves in a hands-on, learning environment facilitated by AI experts, practitioners, and coaches—all dedicated to helping you become the AI boss you need to be. Importantly, you’ll walk away with your own 30/60/90-day plan for AI success. 

Registration is limited to the first 15 CEOs, so we recommend registering today. 

AI opportunity #2: If you can’t make it to Nashville in November, we’ve just added some powerful AI content to the Texas and the South M&A and Business Symposium being held October 16-18 in Houston. BST Global CEO Javier Baldor, a recognized thought leader on AI for the AE Industry, will be sharing his AI experience and vision for the industry in a keynote address titled “The AI Imperative: A Trailblazer’s Perspective.”

This is in addition to the already scheduled two pre-symposium AI workshops specifically tailored for AE CEOs co-facilitated by Morrissey Goodale Principal Brendon Cussio and Thrivence’s Gary McClure. 

If you’re a CEO and you’re looking for an AI roadmap specifically for your AE firm, then put Houston or Nashville on your calendar and get ready to infuse AI into your AE firm in 2025.

You can contact Mick Morrissey at [email protected] or 508.380.1868.

The Vanishing Act: Why Mid-Level Talent Is Scarce in AE Firms and How to Build It Back From Within

There isn’t an AE firm that I know of that isn’t grappling with a growing, pervasive issue—the vanishing mid-level employee. It’s a problem that just keeps getting worse. This gap in the talent pipeline isn’t just a nuisance—it’s a fundamental constraint that’s disrupting client service, stalling project delivery, and complicating leadership transitions industry wide.

The vanishing mid-level talent—a snapshot

In AE firms, the mid-level employee is often the backbone, the linchpin holding the firm together. These are the experienced professionals—not fresh out of school but not yet in the corner office (assuming they still come into the office)—who translate high-level strategies into actionable plans, manage teams, mentor juniors, and, importantly, keep the client happy. Yet, this crucial group is increasingly hard to find.

So why is this happening? The reasons are multifaceted:

1. The great exodus. Many experienced mid-level employees have left the industry, whether due to burnout, retirement, or shifting to other industries where their skills are more recognized or better compensated.

2. The bottleneck. There’s a bottleneck in career progression. Senior roles are often held by individuals who have been in place for years, if not decades, creating limited upward mobility for those just below them.

3. Generational shifts. Younger generations, including Millennials and Gen Zers, have different expectations. They seek rapid advancement, meaningful work, and work-life balance, and if they don’t find it, they move on—often to startups or tech firms that seem to promise more.

4. Inadequate training and development. Firms are often too focused on immediate project delivery to invest in the structured training and mentorship that would develop mid-level talent.

This combination of factors has led to a perfect storm—a hollowing out of the mid-level, leaving firms scrambling to deliver on projects today and worrying about who will lead tomorrow.

The implications of the mid-level void

The absence of mid-level talent has big implications on many aspects of an AE firm, including:

1. Client service. Mid-level professionals are often the direct contact with clients, managing day-to-day interactions and ensuring that projects stay on track. Without them, the burden falls either on overextended senior staff or inexperienced juniors, neither of which is ideal.

2. Knowledge transfer. Mid-level employees are key to mentoring the next generation. They pass on institutional knowledge, technical expertise, and the firm’s culture. Without them, knowledge gaps widen, and the continuity of expertise is at risk.

3. Leadership transition. The current senior leadership can’t stay forever. Without a robust mid-level, there’s no one to step into those shoes. This dynamic could lead to rushed or ill-prepared transitions (internal or external) that destabilize the firm at a critical juncture.

4. Innovation stagnation. Mid-level employees are often at the forefront of innovation, finding new ways to solve problems, improve processes, and bring new service offerings to clients. Their absence can lead to stagnation, leaving firms stuck in the past while rivals surge ahead.

So, what’s to be done? How can AE firms reverse this trend and rebuild their mid-level ranks in the next 24 months?

Building the mid-level back from within—a strategic approach

Here’s how to go about it:

1. Create clear career pathways. Create transparent and achievable career pathways. This step means defining what mid-level roles look like and the outcomes they are expected to produce for the firm, what skills are needed, and what the path to senior roles entails. More importantly, firms must actively communicate these pathways to their employees and ensure that the steps are attainable.

2. Invest in professional development. Over-invest in continuous learning opportunities, from technical skills to leadership training. Consider offering structured mentorship programs where senior staff actively guide mid-level employees in their career progression. Training should be a non-negotiable part of the firm’s culture, not just a box to tick during annual reviews.

3. Promote from within. In addition to bringing in outside talent, promoting from within is crucial for building a strong, cohesive mid-level. It not only motivates junior employees to stay and grow within the firm, but it also ensures that those stepping into mid-level roles understand the firm’s culture and client base intimately.

4. Offer competitive compensation and benefits. Offer competitive salaries and benefits—or lose out to aggressive rivals and other industries. It’s not just about the money—though that’s certainly important—but also benefits such as flexible working arrangements, professional development allowances, and clear paths to ownership or equity in the firm.

5. Focus on work-life balance. Yeah, I know. You probably hear it in your sleep. I just can’t leave it off the list. Explore flexible working hours, remote work options, and wellness programs that address burnout before it becomes an issue.

6. Leverage technology for efficiency. Mid-level employees are often the ones managing multiple projects, teams, and client interactions. Investing in the right technology—project management tools, communication platforms, data analytics, and AI—can streamline their workload, making their jobs more manageable and allowing them to focus on higher-value tasks.

7. Foster a culture of recognition. Actively recognize and reward the contributions of mid-level employees. This can be through formal awards, bonuses, or even simple gestures like public acknowledgment in meetings. A culture of recognition boosts morale and motivates employees to stay and contribute at a higher level.

8. Prepare for leadership transition—now. Identify potential leaders early and provide them with the opportunities to lead, whether through managing projects, client relationships, or internal initiatives. Learn how to let go—and make some room.

Get going!

The next 24 months are critical. Act now before the vanishing act becomes permanent.

To talk with Mark Goodale, call 508.254.3914 or email [email protected].

Market Snapshot: AE Employment

The U.S. is facing a shortage of architecture and engineering talent that will continue impacting not only firms, but also governments that perform these types of services. According to the Bureau of Labor Statistics (BLS), there were over 1.7 million AE industry jobs (NAICS Code 5413: Architectural, Engineering, and Related Services) in the U.S. as of December 2023. We gathered a few insights:

States with the most AE jobs in governments (federal, state, and local) as a percentage of total AE industry jobs:

States with the lowest percentages of AE jobs in governments:

States with the highest ratios of AE jobs per 100,000 residents:

To learn more about market intelligence data and research services offered by Morrissey Goodale, schedule an intro call with Rafael Barbosa.

Weekly M&A Round Up

The M&A momentum continues: With 12 more transactions this week, the consolidation wave in the AE and environmental consulting industry shows no signs of slowing down. Last week we reported transactions in NC, GA, NY, and SC. Global deals were announced in Germany, Denmark, Belgium, and the UK. You can check all the week’s M&A news here.