Hey, it’s Collin. Welcome to Engineering Echelons, a newsletter full of ideas and insights to help engineers excel at management.

Here’s what I’ve got for you this week.

• New and noteworthy news

• A management perspective to consider

• Leadership insights to delve into

• And more…

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Alright, let’s get into it.

Noteworthy Headlines

What is the future of AI in architecture? (BD+C)

Highlights:

• Model generation, document generation, code compliance, and more are expected gains in the next 5 years.

• Further out, expect real-time design cost analyses and auto-generated designs based on past projects and project parameters.

Workers’ Confidence Has Dropped to a New Low (LinkedIn News)

Highlights:

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Management Perspective

Since COVID-19, salaries in the AEC industry have climbed significantly. Nearly every role has seen increases driven by talent shortages, inflation, remote work competition, and a shift in worker values.

Some managers are waiting it out, hoping the talent market will cool off a bit. A common phrase I’ve heard many say is, “Salaries have gotten out of whack. But they will come back into whack at some point. They have to.”

Maybe. Maybe not.

What’s important to know is that this decision to sit tight has consequences if they are wrong. Let’s look at the potential outcomes.

Outcome #1: The market cools off and labor isn’t in as much demand. As a result, fewer staff are needed and there is downward pressure on salaries. This is the best outcome for the managers who are waiting it out.

Outcome #2: The market plateaus. In this scenario, the market cools off and labor isn’t in as high demand, but it’s not contracting like Outcome #1. That means the elevated salaries stay level. This outcome isn’t great for the managers who are waiting it out.

Outcome #3: The demand for talent continues to grow. Consequently, salaries continue to rise as there is a need for professionals who can win and deliver work. This is the worst option for managers who are trying to wait it out.

If we equally weight these outcomes, that means the managers who are waiting it out have a 33% chance of a favorable outcome. Said another way, they have a 67% chance of undesirable outcomes, such as:

• Losing top talent to competitors who adjusted to market conditions

• Slower project delivery due to understaffing

• Lower quality work from lost expertise

• Lower morale among staff who feel undervalued

Again, that’s equally weighting the outcomes. But I don’t think the three have equal likelihood of happening. I’d say there is a much greater chance that Outcome #2 and/or Outcome #3 happen than Outcome #1.

Choosing to wait it out may seem a conservative or neutral approach. It’s not. Failing to react to underlying market forces is risky.

The leaders who are adjusting salary bands and rethinking total compensation—and how to get revenue in the door that covers increased labor costs—are pulling ahead of those who don’t.

Management Insights

Mervin Kelly on compensation at Bell Labs:

“You get paid for the seven and a half hours a day you put in here, but you get your raises and promotions based on what you do in the other sixteen and a half hours.”

—

David Chapman on multidisciplinary learning:

“Learn from fields very different from your own. They each have ways of thinking that can be useful at surprising times. Just learning to think like an anthropologist, a psychologist, and a philosopher will beneficially stretch your mind.”

—

Ed Catmull on great teams:

“Give a good idea to a mediocre team and they will screw it up. Give a mediocre idea to a great team, and they will either fix it or come up with something better. If you get the team right, chances are that they’ll get the ideas right.”

Management Resource

Bosses Should Never Speak First, or Even Second, in a Meeting (WSJ)

A good reminder that as a leader, you influence your team whether you know it or not.

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Looking forward to hearing from you. See you next time.

Collin

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