FEES BUREAU REPORT

After many years of near zero unemployment, it has now emerged a key feature. And yet salaries are up. Vince Nacey suggests why.

The main findings* of this year’s RIBA/The Fees Bureau Architects Employment & Earnings Survey 2009 are:

• architects’ average earnings on 01.04.2009: £45,000

• increase in average earnings 2008 to 2009: 7 per cent

• change in average earnings of All Principals: 0 per cent

• change in average earnings of Sole Principals: decrease by 11 per cent

• change in average earnings or salaried architects in private practice: increase by 6 per cent

• per cent unemployed: 4 per cent

• per cent of architects under-employed due to lack of work: 17 per cent

• number of architects in the workforce: 26,000

• per cent women: 20 per cent

• per cent working part-time: 11 per cent

• per cent of women working part-time: 24 per cent

• average full-time working week: 38 hours

• average number of days holiday: 24

*data correct as of 1st April 2009

The RIBA/The Fees Bureau Architects Employment & Earnings Survey 2009 reveals two contradictory findings: earnings are rising and, at the same time so is unemployment. The “headline” earnings figure is up by 7 per cent during the year. This is not an ‘across the board’ rise: in fact it is limited only to those architects who are salaried, that is not running their own businesses. Salaried architects in private practice – including Associates – saw their salaries rise by 6 per cent. The average salary is now £40,300. Architects employed in the public sector also experienced above inflation rises, of 4 per cent (central government architects) and 5 per cent (local authority architects). But the largest rise has been experienced by those architects working in private or commercial companies. Their salaries are up by 21 per cent. Taken as a group, salaried architects across all sectors record a 7.2 per cent rise on last year. This is more than three times the rate of inflation (CPI, the government’s preferred measure was 2.3 per cent in the same 12 month period; the older RPI measure was actually negative, at -1.2 per cent).

The contrast with Principals is marked. Sole Principals report an 11 per cent drop in their earnings over the year, down from an average £45,000 last year to £40,000 this. Partners and Directors report no change from last year, with an average of £50,000. Although here too there is evidence of a fall; the ‘upper quartile’ figure (representing the top 25 per cent of earners) is down by 15 per cent. And remember that in many cases Principals are reporting their share of profit based on their latest set of accounts – not necessarily for the current year.

The second key finding of this year’s survey is the rise in unemployment. Last year, less than ¼ of a percent of respondents were unemployed; this year the figure has reached 4 per cent. And another 1 per cent are ‘not working for other reasons’. This survey only records unemployment levels amongst UK members of the RIBA; so it does not include UK architects who are not members of the RIBA or architects from the EU and elsewhere who may have worked in the UK and so may under-estimate the perceived level of unemployed architects.

Unemployment has been very low for many years now, indeed last year’s figure was the lowest ever recorded, so this sharp rise is significant. We have to go back to 1996 to see a similar level of unemployment; the chart below shows how things have changed. The sudden and sharp rise in unemployment this year looks very similar indeed to the rise in 1991. The bad news is that unemployment rose to an even higher level the following year, and stayed there for another two years, before dropping back sharply in 1993.

The Earnings Survey does not just measure unemployment; it measures under-employment too. This means respondents feel they have a shortage of work at the time of completing the survey. Last year, the overall under-employment figure was 4 per cent; this year it is 17 per cent. This is a massive increase right across the private sector. Sole Principals are most affected, with 24 per cent – one in four – saying they were “under-employed”. But almost as many Partners and Directors (21 per cent) say the same, compared with just 4 per cent last year. And even amongst salaried architects in private practice the figure is 16 per cent – up from just 2 per cent last year.

So to the crux of the main finding: why are earnings rising when there is more unemployment and underemployment? Here’s one possible reason: a rise in unemployment could lead to an apparent rise in salaries if architects who have been made unemployed are the less experienced or less valued (and thus less well paid) architects. Practices, perhaps, are more likely to want to retain their more experienced staff. The result - salaries apparently increase but in fact it is the profile of architects in employment which has changed, not their salaries. A second possible explanation could be that staff who remain may indeed be given a pay increase to cover some of the duties carried out by architects who have been made unemployed. There are also a couple of technical reasons why this year’s survey might exaggerate a rise – the response from London is higher this year than last, and salaries have always been higher amongst architects in the capital; secondly, the response from male architects is higher this year, and again male architects are paid more on average than women.

Yet, it is entirely possible that there is perfectly simple reason why salaries for those in employment are rising. Many respondents to the RIBA Futures survey tell how the recession is passing them by; and in response to the under-employment question it is telling that 84 per cent of private practice salaried architects are not under-employed. Many of the competitive factors which raised salaries so spectacularly for the past few years are still out there, and even though recruitment may have dropped away, practices recall how difficult it has been to get new staff and need to ensure they take a long-term view in order to retain staff.

Regionally, architects in London are paid the most. This is consistent with previous years. Architects are paid 7 per cent above the UK average in London, but this is a smaller differential than last year (when it was 16 per cent) and suggests earnings are tending to converge.

Average earnings for architects working part-time are 1 per cent lower than full-time earnings (when adjusted up to reflect ‘full-time equivalent’). This is an improvement on last year’s 6 per cent differential. But part-time salaried architects are being paid slightly more (2 per cent more pro-rata) than their full-time colleagues.
This year’s survey shows that of the 20 per cent of architects who are women, 69 per cent work full-time and 24 per cent part-time. This level of part-time working is three times the level of men who work part-time (8 per cent). The unemployment rate amongst women (4.6 per cent) is marginally higher than for men (4.1 per cent) although another 3 per cent of women (compared with 0.5 per cent of men) are ‘not working for other reasons’. Women continue to experience lower average earnings: the differential between women and men overall is 14 per cent, while amongst the more homogenous private practice salaried group it is 10 per cent. Particularly striking is the differential at the ‘upper quartile’ figure – the top 25 per cent of all male architects are paid in excess of £60,000. Compare that with the top 25 per cent of women, who are paid above £47,000:  22 per cent less.

RIBA Members can download a free, summary report of this survey from The Fees Bureau website, at www.feesbureau.co.uk/earnings.asp

A full report on the survey, which includes detailed tables and charts, is also available to purchase from The Fees Bureau, see www.feesbureau.co.uk or telephone 01243 551 302.

Conducted in association with The Fees Bureau, the annual RIBA / The Fees Bureau Architects Employment & Earnings Survey is conducted exclusively amongst RIBA members and excludes members based overseas. A sample of members was invited by email to complete an online questionnaire form in April and May 2009. Nearly 2,500 architects responded; we are most grateful for these members’ willingness to provide their earnings information and for continuing to support the survey. Together these 2,500 participants represent all areas of architecture: private and public sectors; full-time and part-time; men and women; and all ethnic groups. The profile of the sample by age and region is broadly consistent with previous years.