A/E firms predict growth in incentive compensation for 2006

October 2006 » Business Briefs
Architecture, engineering, and environmental firm leaders are predicting an increase of 5.0 percent in incentive compensation spending for this year. Of the more than 100 firms surveyed for ZweigWhite's 2006 Incentive Compensation Survey of Architecture, Engineering, Planning & Environmental Consulting Firms, half are predicting some level of increase, while 29 percent are expecting spending levels to remain the same. Only 11 percent predicted a decrease, and the remainder was undecided. The survey defines incentive compensation as any kind of additional pay or award offered by a firm to its employees, in addition to base wages, as a means of stimulating increased effort and motivating employees. Survey data show firms spent a median of 5.0 percent of net service revenue on incentive compensation in 2005, or $4,545 per employee.
Architecture, engineering, and environmental firm leaders are predicting an increase of 5.0 percent in incentive compensation spending for this year. Of the more than 100 firms surveyed for ZweigWhite's 2006 Incentive Compensation Survey of Architecture, Engineering, Planning & Environmental Consulting Firms, half are predicting some level of increase, while 29 percent are expecting spending levels to remain the same. Only 11 percent predicted a decrease, and the remainder was undecided.

The survey defines incentive compensation as any kind of additional pay or award offered by a firm to its employees, in addition to base wages, as a means of stimulating increased effort and motivating employees. Survey data show firms spent a median of 5.0 percent of net service revenue on incentive compensation in 2005, or $4,545 per employee.

Additional survey results indicate the most common incentive plans among architecture, engineering, and environmental consulting firms are performance bonuses, signing bonuses, referral bonuses, and profit sharing. Firm leaders report performance bonuses and profit sharing plans have been their most successful plans, citing that performance bonuses most accurately reward performance and profit sharing encourages employees to think like business people and concentrate on the profitability of the firm.

The 2006 Incentive Compensation Survey of Architecture, Engineering, Planning & Environmental Consulting Firms is available from ZweigWhite for $395, plus $8 shipping and handling. Order online or call 508-651-1559.

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