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AJ100 salaries in doldrums but firms are optimistic for the future

While the country’s leading practices are poised for a busy year ahead, salaries have stagnated and the number of AJ100 practices making redundancies has risen

For almost 20 years, the AJ100 has ranked the biggest practices in the UK by the number of architects they employ. The accompanying survey provides a snapshot of the top 100 practices – and the state of the profession – over the past 12 months.

Salaries

Architects’ median pay remains at £36,000 for the third successive year, while pay for Part 3 students and year-out students is down fractionally to £26,400 and £19,500 respectively.

These figures chime with the proportion of practices which admitted to introducing pay freezes last year: there has been a 1 per cent rise to 55 per cent of respondents. Associates are the only group to have seen pay rises both this year and last – up £1,000 to £50,000.

According to Manchester Business School analyst Bruce Tether, the range of pay levels between practices is particularly noticeable, with directors’ earning capacity ranging from £40,000 to more than £150,000.

Tether said: ‘Associates can get anything between £31,000 and £75,000, and architects and students in the best-paying practices can get twice what their counterparts receive in the lowest-paying practices.’

For the third consecutive year the AJ100 survey results show that companies which pay directors more also tend to pay their junior staff more.

Of the 17 practices that report paying directors at least £100,000 a year, associates typically earn £55,000, architects £38,500, Part 3 students £29,000 and year-out students £22,000 respectively – all higher than the overall average.

Pay freezes are not the only strategy companies have adopted to cut costs – the number of practices making redundancies has risen from 51 per cent last year to 55 per cent, while the number of firms using freelancers and subcontractors has risen from 25 per cent to 27 per cent.

Fees

The outlook for fee levels continues to improve. For a second successive year the number of AJ100 firms which admitted to lowering their fees has fallen – with a modest 3 per cent drop since last year’s survey (from 71 to 68 per cent).

There has been a 2 per cent fall in those reducing the costs of providing services (71 to 69 per cent) and a one point drop in practices accepting lower margins (from 79 per cent 78 per cent).

Looking at future profit margins, practices remain optimistic, with seven expecting a substantial increase in margins while 51 expect a slight increase. Optimism is greater at larger practices. At the top 25, all of which employ more than 60 ARB-registered architects, none expect their margins to fall: 70 per cent anticipate improvements, while 30 per cent expect no change.

Ten AJ100 practices report having opened UK offices – compared with seven that have closed them. Eight practices say they hope to open at least one new UK office in 2014.

Where the work is

Nine practices reported opening a new overseas office in the past year. A quarter of the aggregate architectural fee to UK offices (£220 million) came from overseas work. But the industry is still not back to the levels of overseas work reported in 2008, when the profession billed as much for work abroad as in the UK.

Read Bruce Tether’s indepth analysis of all the AJ100 data here.

What are the biggest issues facing the profession today?

Carl Vann, director, Pollard Thomas Edwards
‘The time lag between an increasingly confident and ambitions market place and the reflection in fees and programmes’

Simon Bayliss, partner, HTA
‘In London there’s a growing problem of attracting junior staff with stagnant earnings set against dramatically rising living costs. More generally the increasing complexity of regulatory compliance from the early stage of the project has reduced our influence in leading the design. The loss of control of many technical aspects and cost control on projects has also reduced the capacity for architecture to deliver uplifting and uncompromising designs’

Richard Francis, practice director, AWW
‘Keeping design at the forefront of what we do in the face of budget constraints’

Greg Penoyre, senior partner, Penoyre & Prasad
‘Diminishing interest in the need for low energy/low carbon in buildings’

Gavin Sorby, managing director, Buttress
‘The devaluation of what we do. Emphasis is now on contractor-led solutions and design and build. Architects treated like taxis and only wanted for part of the journey will lead to the profession being deskilled’

Roger FitzGerald, chairman, ADP
‘Staying relevant to the construction industry when so much that is built is “building” rather than “architecture”’

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