Carpe Diem! the Time Is Right

Conditions are right for the consulting engineering community to address the real, or perceived, inadequate fees that they have been receiving to date.

First, we have an economy that is strong. This means there is the economic push, social demand and political will to plan, build, and develop transportation infrastructure, new housing for the burgeoning population, supportive municipal infrastructure services, not to mention the energy sources necessary to support this growth.

The increased development and growth means that there is an unprecedented demand for engineering and engineers. As anyone in the profession is aware, there is a shortage of experienced engineers.

Despite the demand for engineering skills, we continue to see salary levels that don’t adequately reflect the importance and value of the service being provided. While engineers might be relatively on a par with doctors, they earn far less than lawyers and management consultants. In 2004 a top consulting engineer in Canada might be earning about $135,000, a general practitioner doctor would be taking home about $100,000, while the top lawyers in the country could be earning in excess of $600,000.

In any industry, product or service, it is quite normal for the price or fee to adjust when demand exceeds the supply. This adjustment is partly taking place in engineering, but it still isn’t drawing the industry away from competition based on lowest price.

There is, however, one factor that might help consultants — the recently introduced and extended privacy legislation, which restricts the release of salary figures tied to individuals. It has been normal for consulting engineering firms to build their fee based on salary figures and multipliers. However, under the new legislation, no longer is it appropriate or legal to release the personal information of individuals, putting an end to the practice of costing by salary levels. The new privacy legislation means that when firms are bidding on projects, they could and should bid based on the quality and value of the services they are providing, without divulging the salaries of the men and women working on the project.

Legalities aside, if consulting engineers are to increase their fees and raise the level of compensation for their work, then they should not respond to cattle calls, or do work at fee levels that do not remunerate the firm (and individuals) fairly for the service and value they provide and the increasing level of liability they take on. As an aside, these principles apply equally to consultants when they are hiring sub-consultants — they should not further grind the fees of those helping to make projects possible.

Recognizing all the positive conditions in the current Canadian marketplace and industry, the consulting engineering community has an opportunity to return to the kind of fair remuneration levels that it once commanded. The question is … will we do it?