Not only are the times a-changin’, so is the workforce. While this is true for virtually every industry, many AEC firms believe that our industry is at the leading edge of a dramatic change in the AEC workforce.

Not only are the times a-changin’, so is the workforce. While this is true for virtually every industry, many AEC firms believe that our industry is at the leading edge of a dramatic change in the AEC workforce.

Over the past six months, this topic has dominated conversations, publications, and meetings, and it will only increase in the months ahead. In fact, during the recent “2004 CEO Conference for AEC, Building Design, and Construction Management Firms,” hosted by Greenway and A/EFCG, the changing AEC workforce was rated by CEOs as one of the most significant business issues they face.

The issue is comprised of three main factors:

A significant change in workforce age demographics

A growing diversity of the workforce that we have not yet accommodated as an industry

Significant differences between the needs and motivators of architects, engineers, and constructors in the WWII and Baby Boomer generations and the needs of those in Generations X and dot-com.

Shortage of AEC Industry Professionals

The shortage of AEC industry professionals is twofold: a current shortage of quality 20-year professionals and a rapid change in workforce age demographics. Industry leaders note that they are particularly concerned about finding and keeping 20-year professionals that are leaders and strong client managers. One leader noted, “A strong client manager is the key to getting and keeping clients. He or she must have excellent management, communications, and decision-making skills. Our biggest challenge is keeping our key client managers, and recruiting new ones from our competitors.”

There is also concern among CEOs and owners that there are fewer professionals at this level interested in moving into leadership and ownership positions than there were in the past three decades. This will create challenges in ownership transition in the future.

Another significant trend involves family flexibility. Industry leaders note that mid-level professionals are less flexible than they once were, due to more two-income families. Thus, it is harder to get employees to travel for extended periods and devote large amounts of family time to work. It is predicted that by 2005, both partners will work full time in 75 percent of U.S. households.

Workplace demographics are also of interest to AEC firm leaders. Overall, it is estimated that one-third of the AEC workforce is age 50 or older—which leads to a growing concern of a future experience gap. The National Science Board estimated that a quarter of the entire U.S. engineering and science workforce is older than 50 and will retire by 2010. This will be partly, (but not significantly) offset by the trend for people to work later in their careers.

By contrast, approximately 14 percent of the AEC workforce is under 30. And at colleges, enrollment in architecture has decreased slightly: in 2002, there were about 18,000 full-time students, down from 22,700 students in 2000 and 21,000 students in 1995. Engineering enrollment has increased slightly; the 2001 freshman class was 106,000 students, a 5 percent growth over the previous year.

However, the majority of that growth was in computer engineering, which represents about 20 percent of all engineering students. That field is projected to grow 15 percent annually, at the expense of other engineering disciplines.

There also appears to be a growing lag between students entering college and the workforce. Colleges note that students under 20 are taking longer to complete college, and thus delay entering the workforce.

The concern of industry leaders is not in regard to the total college enrollment in AEC professions—rather, it is that these graduates will have greater opportunities outside of the traditional AEC industry, and particularly outside of the building design and construction industry. There is significant migration toward high-tech careers such as computer engineering, design animation, product design, biotech, and biomedical engineering. Thus, there is a need to reinforce AEC industry career options with younger students to ensure an ample future workforce.

Diversity of Professionals

Consistent with the growing diversity of the U.S. population, the diversity of the AEC industry is expected to change significantly in the next 50 years. The U.S. population is expected to increase by about 50 percent by 2050; during that same period, world population will double. The U.S. non-Caucasian population will increase from 34 percent in 2000 to 50 percent in 2050; increasing diversity and the general population. The trend has already begun: in 2000, 39 percent of children in the U.S. had at least one foreign-born parent.

These changes will create a more diverse AEC workforce that comes from a different socioeconomic base and different cultures than the current workforce. These are the AEC industry leaders of tomorrow!
The National Science Board estimates that only 7 percent of the total U.S. science/engineering workforce was non-Caucasian in 2000. The AEC industry is growing slightly more diverse: during that time, approximately 22 percent of architecture students and 23 percent of engineering graduates were non-Caucasian.

Forward-thinking AEC industry leaders are already addressing workforce cultural and racial diversity issues, via the following:

  • Sponsoring racial diversity programs to introduce students to the AEC profession, particularly at the K-12 level

  • Hiring college graduates that are not U.S. citizens on work permits. In some cases firms sponsor these individuals for green cards

  • Mixing teams of U.S. and non-U.S. professionals to work on international projects

  • Exporting work to lower-cost work areas, such as India, China, and Mexico

  • Creating partnerships with design institutes in other countries, particularly in Asia, to anticipate a future when those professionals will come to the U.S. seeking work

Next Generation Needs

Much has been written about Generation X (age 26-40) and the Millennial or dot-com Generation (age 25 and younger). As Jim Cramer and Scott Simpson noted in How Firms Succeed, “It should come as no surprise that different generations behave differently. People who grow up in different times, under different influences, develop different values. This is called progress … With your help as a leader and mentor, Generation X and the generation that succeeds them will grow and learn. And if you’re smart, you’ll make a point of learning from them as well.”

AEC industry leaders note that there is great optimism for these generations to make a positive impact on the profession, but also great concern about whether the industry is prepared to meet their motivational and workplace needs. Of course, it is not fair to judge individuals and make business decisions based on generalizations based on the accident of a person’s birth year.

However, there are consistent trends worth noting about the inclinations and motivations of future generations that will become AEC industry clients and leaders:

Generations X and dot-com are the most educated and most computer-literate generations ever. They are well equipped for work in an increasingly high tech world. As consumers and employees, they will continue to demand even more advanced telecommunications and Net-based transactions. To these generations, information is power.

To them, “paying your dues” and “company loyalty” are obsolete concepts. They have not witnessed a lot of loyalty in their lifetimes, so it will be hard to retain them if firms don’t work on it. This generation has the highest tendency to job jump in history.

They harbor very little trust for public leaders. They also do not have automatic respect for seniority and age. They expect leaders to consistently demonstrate knowledge, passion, and competency as a condition of respect.

“Prove it to me” is a typical mantra for Generations X and dot-com. This starts as young as elementary school and continues throughout the education and work cycle. College professionals note that students are far more likely than ever before to question the applicability of subject matter to their future careers. In fact, students typically request tangible proof of benefit to them before committing to study of a given topic.

For these generations, life-long learning is a way of life. It is estimated that the half life of an engineer’s knowledge today is five years; in some areas such as electrical engineering, almost half of what a student learns in college will be obsolete within 3-4 years.

Generations X and dot-com are also gender-blind and quite open-minded about racial and cultural diversity. In fact, many people in these generations feel they have more in common with their peers across the world than with their parents or people of the baby boomer/ World War II generations. Increasing communications across the world will continue to blur the lines between regional and cultural differences.

Generation X is creative and nontraditional; most employees in the AEC industry in this age range are genuinely interested in pushing the building design practice to new levels. They also have significant energy.

Generations X and dot-com are the most entrepreneurial generations in history. Developed societies will increasingly take their cues from these generations rather than the Baby Boomers who have dominated western thinking for four generations. Ten percent of Workers under age 30 are actively trying to start their own business, compared to 3 percent in previous generations.
Generation X is economically conservative and interested in near-term return on investment. AEC industry leaders note that this is an increasing challenge for ownership transition, as it is often difficult for a company in this industry to demonstrate similar near-term ROI to other investment options.

Generations X and dot-com thrive on challenge, opportunity and training. They are interested in whatever will best prepare them for their next career move. Cash is just the beginning of what they expect.

Responding to the Challenge of Change

While each firm needs to chart its own course in responding to the changing AEC workforce, the following ideas can provide an basis for reflection, discussion, and action.

Examine your firm’s workforce demographics. What types of employees are you best at attracting and retaining? Are your firm’s statistics aligned with future workforce demographics?

Do you have a good balance of 20-year client managers and future principals? Are you doing everything you can to retain them and to move them into firm leadership positions? Do you know where to find more like professionals in the future?

Do you have a program to capture and transfer the knowledge and experience of senior staff? Will your employment and/or ownership policies allow you to take advantage of their experiences and wisdom well into the future, if you so desire?

Are you actively working to encourage architecture, engineering, and construction as a profession to coming generations? Are you working to improve racial diversity in your firm and in education programs?

Evaluate your firm in terms of its ability to accommodate and be relevant to a workforce that includes people of other nationalities and cultures. What do you need to do to be an attractive employer to this, your new workforce?

Evaluate what it takes to motivate younger employees and future leaders to want to be owners in your firm. Is your stock attractive? Are you recruiting and/or retraining the younger stars that will want to stay with the firm and own it in the future?

Learn about the real needs of Generations X and dot-com, as related to the AEC industry and your firm. The next 10-15 years will be the toughest in terms of blending the cultures and practices of firms established and led by WWII and Baby Boomer generations to the Gen X/dot-com generations.

Firms will need to adjust policies and practices to the values of these new and different generations, including finding new ways to motivate and reward them. Now is the time to recognize new generational needs and respond.

Evaluate your training and technology programs. What do you need in order to attract and retain the next generations? Understand the impact of lifelong learning and the incremental technology rate of change on Generations X and dot-com. The current practice of obtaining CEUs and attending sporadic outside training classes will need to be supplemented by more frequent and active learning experiences. Companies that can provide diverse, cutting-edge training will have a strong recruiting advantage over those that offer fewer opportunities for younger employees to continually improve their knowledge and skill base.

This is an exciting time in our industry—one that will likely generate new leaders and followers, and one that will also require a significant commitment to flexibility and change in order to maintain and create new value. In the words of a prophetic Baby Boomer:

“Come gather ‘round people
Wherever you roam
And admit that the waters
Around you have grown
And accept it that soon
You’ll be drenched to the bone.
If your time to you
Is worth savin’
Then you better start swimmin’
Or you’ll sink like a stone
For the times they are a-changin’.”*

—Jacqueline Rast

Rast is an engineer and management consultant with more than 20 years of experience in the engineering and construction industry. As a principal with Greenway Consulting, she specializes in advising facility owners and architecture, engineering, and construction (A/E/C) firms in the areas of business strategy, brand/image management, marketing communications, and sales strategy/coaching.