The AEC sector is rapidly growing and evolving.
Firm building blocks for growth were laid last year with the passing of the $1.2 billion Infrastructure Investment & Jobs Act (IIJA), infusing the sector with years of funding for projects and jobs.
Today, key trends include shifts to kinder company cultures and highways to transformational new technologies.
But the highway ahead is not without some forks in the road. An aging workforce, coupled with the great resignation, has created a critical talent shortage. Inflation and supply chain crunches are also headwinds.
How will AEC firms come out on top?
In this article, we explore key trends shaping the industry and offer valuable tips and advice for engineering a prosperous path forward.
Funding as a foundation
A core foundation for AEC’s burgeoning boom is government investment. According to an analysis from the American Council of Engineering Companies (ACEC), the IIJA will boost engineering and design services firm sales by $126 billion over six years, add 82,000 jobs to the sector, and deliver $62 billion in wages.
“The historic levels of investment in the bipartisan agreement will unleash the talent and ingenuity of America’s (AEC) industry to transform our built environment in ways that will benefit the nation for years to come, “said ACEC President and CEO Linda Bauer Darr in a release.
And it’s not just roads, bridges, highways, buildings, and traditional infrastructure that is reaping these rewards. A major beneficiary of this stream of cash is in the environmental space, where hydrogen, fresh water, and wastewater companies stand to gain immensely from the flow of funds.
“We’re optimistic about any dollars that go to things like transportation because every time you install roads, you also have to put in catchment basins and other water-related infrastructure,” said Reese Tisdale of Bluefield Research in an article by the American Society of Civil Engineers. Tisdale notes water is a top priority for corporations seeking to improve their operations. And water technology to deal with droughts in the American west will continue to spur business in the hydrogen space.
“It definitely drives new project activity, where there are greater considerations for alternative water supplies,” said Tisdale. “That could be everything from desalination to water reuse and just basic conservation. There’s a whole ecosystem around all of that, including smart-home or more efficient household water management.”
Let’s get digital
Another hot trend and cornerstone of advancement for AEC is the adoption of new, digital technologies.
One such example is the use of Building Information Modelling (BIM), a digital representation of all the physical and functional characteristics of a building/facility. BIM enables AEC teams to gain shared knowledge and data about a facility in real-time, which empowers wise decision-making and smooth project management, from conception to demolition.
“As the market matures, awareness of the (many) benefits of BIM increases, government mandates for BIM usage grow….and integration possibilities between BIM and more recent technologies increase,” according to i-scoop magazine. “Examples of integrations include drones, artificial intelligence, augmented reality, 3D scanning (acquiring data from an object, building or site using a laser scanner to generate a BIM model) and 3D mapping, 3D printing, and far more.”
Consider how drones are revolutionizing building site inspections. In the past, several people were hired to inspect a site. To get clear views, inspectors had to use an array of devices, such as boom lifts, binoculars, or even ropes. This frequently limited access led to poor viewing angles, and with permit requirements and associated documentation, was a complex, bureaucratic process. Now, by setting up drones to take live images of sites, the entire process is safer, faster, easier, and far less labor-intensive.
Tight fight for top talent
Stellar talent in all areas of AEC organizations, from executives to skilled laborers, is in chronic short supply.
Over 40% of the current U.S. construction workforce is expected to retire over the next decade, according to data reported by Forbes. This year alone, the construction industry will need to attract nearly 650,000 additional workers to meet the demand for labor, according to the Association of Builders and Contractors. Moreover, an article published by Verdict reports only 29% of STEM professionals are interested in staying in their current roles.
In our own executive search practice, we are seeing robust demand for people at the highest levels of AEC firms. The aging workforce, retirements, burnout, a shift in work-life balance aspirations, a strong desire for more diverse leadership, and other facets of the Great Resignation are all challenges.
Bridging the labor gap with cultures of trust
While the labor market is in a bind, there are proven ways to attract and retain excellent people and expand the talent pipeline.
A smart solution to bridge the labor gap is cultivating authentic and resilient cultures of trust.
Trust is “even more critical in (our) industry where our projects involve an army of collaborators—from architects, engineers and interior designers to program and project managers, contractors, tradesmen and more,” according to McKissack & McKissack, a national architecture, engineering, program, and construction management firm. “Every member of this expansive ecosystem must trust that every aspect of the requisite work will be completed as specified and on time. Trust must be maintained internally between co-workers in each company, and externally among all the firms that work on each…project.”
Indeed, research consistently shows that increased levels of trust in companies and project teams correlate with significantly higher profit margins, employee retention, and repeat business.
As a result of the pandemic and the pivot to hybrid work models, AEC firms have learned that flexible work cultures, both in terms of schedules and work locations, along with the interpersonal dynamics between people and teams are paramount.
Final thoughts
Hundreds of millions of dollars in government investment and leading-edge technologies are the hot trends that have set the wheels in motion for a bright AEC future. While there are some bumps to navigate, culture has the potential to cement success.
Leaders must build cultures that foster trustful environments and drive collaboration, belonging, innovation, inclusiveness, and resilience. People are the brains and brawn behind brilliant designs, skilled craftsmanship, and visionary ideas; put their needs at the center of your business decisions and your organization will be well on its way to hitting the high road.
