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Tuesday29 July 2014

Is there anything we can do to tackle the problem of low pay?

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BD has recently given extensive coverage to the issue of low pay in the profession, but there has not been much focus on the answer. What is the BD Practice columnists’ solution?

The solution is obvious, but not simple. The root cause of low pay is the low fees charged by architects; this is in turn is connected to the value that clients put on architects’ services. If you add a global recession to the mix, with falling workloads and intensifying competition for work and jobs, you have a complex equation to solve.

To increase pay levels for architects, we need to work on the three inter-related areas of value, fees and pay together.

Increasing value

To convince clients to pay more for architects’ services (as they do for their lawyers, accountants, surveyors), we need hard evidence of the value that good design brings to clients and skills in selling the benefits of our services. Easier said than done. The real value of good architecture is hard to quantify, such as the social, economic and operational benefits and quality of life. But this is not impossible. An easier target would be measures of improved building performance, delivery and operational efficiencies – focus on the big benefits of improved cost-in-use, reduced staff/occupancy costs, not just on the initial capital cost of construction.

Good work is already being done on this by Cabe and the RIBA, with value toolkits, researching evidence as well as campaigning to government clients and decision-makers. Also celebrating excellence and promoting architecture through awards and exhibitions, which the RIBA champions.
Architects also have a crucial role to play here by becoming far more client focused and selling “benefits” rather than “services” to their clients, collecting and promoting evidence of the real value their previous work has brought to their clients and the end-users.

Increasing fees

Even in a difficult market there are ways of finding and creating more lucrative opportunities. Architects are inventive people. There are big issues out there requiring their creative input, such as achieving low-carbon targets. Practices need to improve their business effectiveness, demonstrating and harnessing “value” to get those extra fees. The RIBA is focusing on this issue, providing business training and benchmarking tools. There is a plethora of business skills assistance out there to tap into. Maybe we need to look at putting more of this into our qualification curriculum.

The political and economic realities of our current age mean it is unrealistic to try to achieve more influence and reward by greater protectionism for architects, such as regulation of function, mandatory fee scales, etc. We live in the information age of free-flowing global economies, which resist restriction.

Increasing pay

It is primarily up to the individual to value their own worth. Despite the desperate work situation, we need to focus on selling the value and benefits we can bring to our employers. Employers also need to have a more intelligent approach to pay and reward. Talented and motivated people are the most valuable asset to any business, and particularly architecture. Employment conditions, including pay, need to be fair and incentivising to get the most out of our employees. If low basic pay is economically unavoidable, it should at least be linked to sharing in any future success, such as performance bonuses.

The government has to create the regulatory environment to ensure fair and enabling employment conditions. It needs to curtail the non-paid “intern” system, by limiting its use and differentiating short-term work experience from longer-term apprenticeships and professional development; insisting that PEDR (professional education and development resource) type experience for architects has to be paid at at least the minimum wage. The RIBA does encourage practices to have fair pay through its chartered practice scheme and code of professional conduct.

RB

Will waiving fees stop legal action?

A client has made a complaint about the work and is threatening to sue me. Can I just agree to waive my fees to make them go away?

Whether you know the client’s complaint is fair, or you just don’t think it makes commercial sense to argue with them, one of the first things you should consider is notifying your professional liability insurer. You will not want to find that, by making an offer or admitting liability without your insurers’ consent, you have somehow prejudiced your insurance cover. Your insurer may also arrange for legal assistance with the resolution of the complaint or the drafting of any settlement agreement.

Subject to that, and assuming you are resolving matters yourself, there are some key points to bear when seeking to achieve any compromise with the client.

First, it is usually sensible to make it clear that negotiations are being conducted on a “without prejudice” basis. This means that any concessions you make cannot generally be disclosed if matters escalate to formal proceedings.

Second, think about the nature of the dispute and the extent of the “release” that you will be seeking. Will the settlement cover just the existing complaint, or any broader potential claims that the client could conceivably have against you? Ideally, you will want to conclude matters as fully as possible without the risk of further claims down the road.

In turn, you should make it clear what exactly you are agreeing to waive as part of any deal. You will wish to ensure you do not unwillingly lose the right to any further fees than intended. Also, what future issues need to be tied up, such as ownership of the designs and papers?

Another important consideration is whether the terms of the settlement should remain confidential. You may also, for reputational reasons, want to make any deal “without any admission of liability”.

Bear in mind who you are settling with. Usually this will be clear, but think about whether there is anyone else that you think should be bound by the settlement (for example, a sub-contractor or parent company), or whether a third party might be affected by what you are trying to agree.

As the above illustrates, there can be a number of considerations to bear in mind when seeking to resolve any complaint. It is important to record any resolution in writing - clarity is key. You may want to consult a solicitor to ensure that the agreement contains all the relevant terms, particularly if any future dispute could be high value.

PP

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