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AJ100 Key findings: salaries stagnates, redundancies drop, margins cut

Key findings from the AJ100 survey reveal practices have frozen pay and cut margins and fees in response to the economic downturn. However the AJ100 fee scale shows a  slight rise in percentage fees for small-scale work, and a fall for large-scale jobs.

Pay Freeze

Salaries have stagnated for architects working for the AJ100 practices, with the average wage for qualified architects having dropped to £36,000 from a peak of £38,000 in 2008. Though associates’ salaries rose slightly to £47,000, take-home pay for directors and students remained static – representing an overall decrease in income once inflation and tax are taken into account.

But, according to the AJ’s survey of more than 1,000 employees of the country’s largest practices (see page 116 for full statistical breakdown), architects remained largely satisfied with their pay, suggesting many were happy just to have a job.

Intriguingly, practices that were more generous with their pay packets at senior level – 15 AJ100 companies reported directors earning more than £100,000 – were also willing to offer their junior staff higher salaries.

Practices that paid their directors and partners £80,000 a year also paid their associates an average of £5,000 more per annum, architects £2,500 more and Part 3 students £1,000 a year more, compared with those that were less lavish payers at senior level.

Cutting margins, not jobs

While the overall number of UK qualified architects employed by the AJ100 fell from 5,825 to 5,639 since 2010, the majority of practices said that making redundancies was no longer among current strategies to weather the storm. Cutting margins was the most common response to financial troubles, cited by 84 per cent of firms, along with lowering the cost of providing services (79 per cent) and lowering fees (78 per cent).

Companies that laid off staff tended to let support staff go before qualified architects.

Big reputations, big fees

The practices with the biggest reputations also reported the biggest fee income per employee. Zaha Hadid (CMA-CGM Marseille headquarters scheme pictured), Norman Foster and MAKE all boast fee income above £100,000 per head.

Fee scales

Worryingly, the percentage fees that practices charge for larger-scale jobs has dropped, for instance from 4.3 per cent on design and build refurbishment projects with a value or more than £10 million in 2011 to just 4 per cent this year.

Percentage fees charged by AJ100 practices have actually gone up on smaller-scale work – 7 per cent on traditional new build schemes with a contract value of £250,000, compared with 6.4 per cent in 2011.

For overseas work, practices are eyeing non-EU Eastern Europe and Singapore. Many remain confident of ongoing work in the emirates, but there has been a surprise drop in those targeting Saudi Arabia. Companies also seem to be turning their backs on Australia and New Zealand, despite recent figures showing housing growth (AJ 10.05.12).

Though Hopkins dropped 21 places this year, more than 40 per cent voted the firm’s Olympic Park Velodrome their favourite building of 2011.

Top 20 practices ranked by fees per employee (£)

Zaha Hadid Architects 137,111
Foster + Partners      119,152
Make     101,440
Fletcher Priest 99,518
Allies and Morrison   98,105
Avanti Architects        94,647
John McAslan        92,828
S&P        92,592
John Thompson    90,983
Squire and Partners 87,903
tp bennett       87,878
ORMS    87,209
Page\Park          83,745
ArchitecturePLB        80,020
Hawkins\Brown          79,268
Associated Architects 79,245
fch Architects             78,160
Stock Woolstencroft   78,048
Stanton Williams        77,570

 

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