Running to stand still

Words:
Vince Nacey

Despite signs that things may have stabilised – earnings slightly up, unemployment slightly down – the picture is patchy with no clear trend. Vince Nacey discusses this year’s research

This year there are some small improvements in architects’ earnings and employment. Last year RIBA/The Fees Bureau Architects Employment & Earnings Survey was the second in a row in which average earnings fell – the first time earnings had fallen in two consecutive years since the survey started in 1987. Its key findings are: 

> Architects’ average earnings on 1 April 2012: £41,100
> Change in average earnings 2011 to 2012: rise of 3 per cent
> Inflation over the same period: 3 per cent
> Average earnings rise for salaried architects in private practice by 1.3 per cent
> Principals in partnership recorded a rise of 1.6 per cent
> Largest fall is in the earnings of sole principals (down 7 per cent) and private in-house (down 13 per cent)
> One quarter of sole principals earn less than £20,000
> Largest rise recorded by architects working for central Government (up 7 per cent)
> Per cent unemployed: 3 per cent; per cent not working for other reasons: 3 per cent – the unemployment rate has fallen from last year’s 4 per cent

This year, average earnings have recovered a little, rising by almost 3 per cent. There is also a small upward move in the level of fringe benefits while the unemployment rate has fallen back, also by a small amount. But when the headline rise in average earnings is set against inflation – also 3 per cent – then earnings are standing still. Nevertheless, ‘standstill’ is better than the decline we recorded in the previous two years. 

These small changes suggest the employment and earnings of architects have stabilised. But the statistics reveal a profession split between sole principals and everyone else.

 

Tough at the top

Sole principals are having a torrid time. Their earnings have fallen again, in 2012, by another 7 per cent. From a peak of £45,000 in 2008 they have seen their average earnings fall nearly every year since to reach just over £32,500 now: 28 per cent lower.  In 2008, their earnings were 7 per cent higher than the average for all architects; now, sole principals earn 20 per cent less than the average architect. Significantly, a quarter of sole principals earn no more than £20,000 (the lower quartile figure). And remember, this is the figure for full-timers. It’s not just earnings which have fallen; receipt of benefits is lower too. Now, just 9 per cent of sole principals say they pay into a pension, and 15 per cent drive a company car. This compares with 17 and 20 per cent respectively last year.

Numbers game

Part of the reason for lower earnings for sole principals is probably that there are more of them; the number of sole principal architects is estimated to have grown by as much as 32 per cent since 2010. This might also be part of the reason why unemployment has fallen back; previously unemployed architects may be setting themselves up as new practices, but these young firms may not yet be well enough established to find sufficient work – and income.  

Another reason for lower earnings among sole principals may be related to the rate of under-employment; as many as 29 per cent say they are under-employed. This rate of under-employment is higher than for other staff categories – for example, among salaried architects in private practice it is 10 per cent and is even less, 5 per cent, among public sector architects. The number of principals in partnership who consider themselves to be under-employed is also high, at 22 per cent, and the highest rates of under-employment.

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