Salary survey has good news for employment and the lower paid
The seismic changes almost everyone is experiencing as a result of the pandemic have affected this profession in three ways, according to results from the latest RIBA/The Fees Bureau survey of architects’ earnings.
First, the number of architects has stopped growing. In the five years to 2019, more than 1,000 new architects were added to the profession every year. Some of these came from overseas, others were home-grown as the rise in university places saw many more emerging as newly qualified architects. But by the end of 2020, the number of architects on the ARB register stopped growing. In so much of the economy, it is difficult to separate the effects of the pandemic from the effects of Brexit. But the rise in numbers of architects continued for four years after the referendum vote. Unlike other sectors of the economy, EU nationals did not leave the profession after the referendum. It’s a different story after the pandemic; across the country, as people realised the work from home order was to be a long-term change, EU nationals have been moving back home.
Second, average earnings have moved erratically. Pay fell substantially in 2020 but much of that fall has been reversed this year. Last year’s drop needs to be set in context – earnings had been falling anyway. Until 2015, architects’ average earnings had risen consistently for 13 years. This came to an end as average earnings flattened out and then started to fall. The most likely reason for the end of rising earnings is the large increase in the number of architects, where the influx of many more young, less experienced and therefore less well paid architects brought the overall average down. But in the last two years, changes have become more exaggerated. A large fall last year has partly reversed this. Uncertain times lead to uncertain moves in the figures.
Third, there have been structural changes to the profession. In 2020 part-time working rose massively, partly on the back of furlough. We went from 16 per cent part-time in 2019 to 24 per cent in 2020. It has now moved back to 15 per cent this year. At the same time, the number of architects who are unemployed or not working for other reasons is broadly unchanged (3 per cent in 2019, to 4 per cent in 2020 and now back to 3 per cent) - a remarkable outcome.
Average salaries in 2021 have increased for the largest group, salaried architects in private practices. That excludes partners and directors. The average rise for salaried architects is 5 per cent, although because salaries fell last year, this year’s figure is only 1.2 per cent higher than in 2019.
Delving within those figures, though, shows that salaried architects’ average earnings have fallen a little compared with 2019 in medium sized practices (practice size 11-30 staff was £40,000 in 2019, compared with £38,000 now) but earnings are higher in large practices. The average for salaried architects in practices with more than 50 staff is up from £41,000 in 2019 to £43,900 now. These rises in larger practices may reflect what is happening in the broader economy, where labour shortages are being addressed by offering more cash to recruit and retain. That could be a growing trend for the next 12 months and it is possible that rising salaries could filter down to architects working for smaller practices, too.
The upward trend in average earnings of salaried architects in private practices contrasts with the average earnings of partners and directors in those same practices. These are 4 per cent lower this year than last, but the fall is even greater compared with 2019. The average earnings of all partners and directors this year is £47,800; compare that with the average of £60,000 recorded just two years ago. This year, average earnings for partners and directors have fallen in all practice sizes. We are also seeing a fall in average earnings among sole principals, whose average earnings are 3 per cent lower than in 2019, although higher than last year’s figure.
The highest earning architects this year remain those working for private in-house departments. Last year, their average earnings fell sharply, while this year it is up a little – but still below the 2019 level. Also trending down are average salaries for architects working in the public sector; local government architects’ average this year is £41,500 (lower by 5 per cent) and those working in central government average £43,000 which is 6 per cent lower than last year. It is possible that this downward trend in the public sector might be due to older architects retiring and being replaced by younger, less experienced and less well paid architects.
Closing the pay gap
We do not have enough data to confirm that theory. But the idea prompted us to look a little more at how the gap between average earnings for the younger and older architects has changed over time. And it highlights a paradox; even though older architects are paid more, it is they who are experiencing falling earnings. Younger architects are paid less but are witnessing average salary rises even through the pandemic.
The first millennials started to turn 40 this year, and our snapshot of architects aged 30 and 40 in 2021 (right) shows that their average salaries are rising. It may have been a little uneven in recent years but this year’s improvement in base salary is clear. More dramatic is the fall in average earnings for Generation X (shown by the line for an architect now aged 50) and for the baby boomers (now aged 60). Those who are now aged 50 saw their earnings peak as long ago as 2017 – since then, average earnings have dipped each year.
It suggests the profession – specifically, private practice – may be moving forward at two different speeds. Large practices are more likely to have corporate clients with more stable funding. Consequently they may be feeling more secure about the future, keen to retain staff by paying them more. The other part of private practice is the one person, small and medium-sized practices whose workloads may be more volatile, as smaller clients and developers put projects on hold, hitting practices’ profits and reducing principals’ pay. Large practices are more likely to employ a younger demographic, while partners and directors – who tend to be older architects – are likely to form the majority of staff in small and one person practices. This is probably an over-simplification but the separation of architects into large, international practices and everyone else has occurred in other professions, notably accountancy and legal. The challenge for the architectural profession is for smaller practices to maintain profit and salary levels for their partners and directors. And that relies on the difficult balancing act of maintaining or even improving upon current fee levels in a difficult and competitive market.
Aziz Mirza is a director of The Fees Bureau
The annual RIBA / The Fees Bureau Architects Employment & Earnings Survey is a research survey conducted among RIBA members and excludes members based overseas. A sample of members was invited by email to complete an on-line questionnaire form in May to August 2021. We are very grateful for respondents’ willingness to provide their earnings information and for continuing to support the survey.