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Clayton & McKervey is a full-service CPA and consulting firm servicing middle-market, growth-driven clients in the industrial automation sector. Based in Detroit we provide tax, accounting, assurance and business advisory services to closely held domestic and international clients. To learn more about Clayton & McKervey, visit claytonm

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A&E Talent: Money isn’t the Only Motivator

POSTED 10/07/2021

The financial health of an A&E firm hangs on three vital threads:

  1. Enough clients who prefer your firm and your people over the competition
  2. The right project/discipline management to ensure steady billables and reimbursables
  3. Sufficient process controls to prevent margin erosion and sustain a profitable multiplier

Each of these lifelines depends on your people and their commitment to the goals and values of your firm. Are they willing to invest discretionary effort in your success? Is your firm such a great place to work that they won’t be tempted to leave for an enticing signing bonus?

As important as it is, money isn’t the only motivator. Attracting and retaining a winning roster of top talent demands a creative focus on both compensation planning and cultural factors that matter to the professionals who create today’s engineering and architectural marvels.

Compensation planning considerations for A&E firms

Owners have many creative options to incentivize long-term loyalty to the firm.

  1. The chance to earn an ownership stake in the firm – especially one that’s graduated and vests over time – can be a compelling reason to stay. This can be an Employee Stock Ownership Plan (ESOP), defined stock option grants, or phantom stock (also known as shadow stock) that tracks the value of actual stock without diluting ownership.
  2. Variable Incentive Income. Bonus targets can be tied to a mix of service anniversaries and individual and project performance. For senior leaders, bonuses may also reward their efforts to retain and motivate their teams through cultural behaviors.
  3. Professional Recognition. Licensed professionals invest significant time and money maintaining credentials and expanding the knowledge base that makes them attractive to prospective clients. Consider supporting education, fellowships, or funding a sabbatical program for top performers that’s contingent on long-term service commitments.

Cultural conditions that promote A&E talent retention

Engaged employees tend to be less vulnerable to job-hopping offers – but it takes more than mere job satisfaction (acceptable pay and working conditions) to ensure that the people you rely on to deliver profitable, high-stakes jobs find real meaning in their work.

Here are six key questions to ask about the cultural health of your firm.

  1. Do your cultural beliefs feel authentic to everyone in the firm?
  2. Do you have effective two-way internal communication in place?
  3. Can your people see the impact of their work on your clients?
  4. Do you offer enough opportunities for your people to connect with each other?
  5. Do you give people enough autonomy to innovate and drive process improvement?
  6. Can your people see that they have attainable and worthwhile growth opportunities?

Contact Us

Compensation planning works best when it’s part of a holistic approach to your firm’s health and long-term success. Our A&E practice group is available to talk with you about strategies that will help you protect the value and viability of your firm today and into the future. Contact us to learn more.