The third edition of AIA’s Small Firm Compensation Report has been released detailing how sole proprietorships and firms with fewer than three architectural staff employees fared during the tumultuous period between 2019 and 2021.
The report includes data on compensation trends, employee demographics, trends in pay practices, and details on employee benefits. It also details pandemic impacts to salaries, employment levels, and firm culture.
According to AIA, for most positions at small architecture firms, salaries declined or remained the same between from 2019 to 2021. Firm leaders saw the steepest compensation declines, most notably solo architects, who experienced average annual losses of 6.5 percent if they were sole proprietors and annual losses of 7.3 percent if they were not sole proprietors. Firm principals who are sole proprietors also saw losses, for an average annual decrease of 3.8 percent from 2019 to 2021.
Additionally, small firms were still heavily impacted by the pandemic even with the assistance of Covid-19 relief initiatives, such as the Paycheck Protection Program (PPP). Average small firm revenue declined by 20 percent, falling from $510,000 in 2018 to $410,000 in 2020. The number of small firms with annual revenue of $1,000,000 or more declined from 10 percent of firms in 2018 to 8 percent of firms in 2020.
One of the few compensation practices that reflected positive change involves benefits related to quality of life and firm culture. Two notable examples highlighted by AIA are flexible working hours and parental flexibility, with the share of firms offering these benefits increasing by two percent from 2018. Small firms with five or more employees led on many of these benefits. The share of small firms that offered remote work also increased, which isn’t surprising.
The full 2021 AIA Small Firm Compensation Report is available for purchase on the AIA website here.
How has the pandemic impacted compensations, benefits, or work culture in your area? Do the numbers outlined in the report reflect your personal experience? Share your feedback in the comments below.