Benchmark Report 2023: The State of Canadian Architectural Practice

In early 2023, the Royal Architectural Institute of Canada (RAIC) and Canadian Architect partnered to refresh and update the Canadian Architectural Practices Benchmark Report, with the goal of providing comprehensive, anonymized data on the current standards for compensation, billings, equity, diversity, and inclusion (EDI), and other key indicators among Canadian architectural practices. 

This survey and report were last completed in 2011, and prior to that, in 2009. For the 2023 report, we refreshed the 2011 survey, and added new sections related to Indigenous themes and reconciliation, climate action, and EDI. To complete this work, we partnered with Bramm Research Inc., a consultancy which has supported previous editions.

The full report is now available for purchase from the RAIC. Here at Canadian Architect, we’ve delved deep into select findings in the text below and in a series of eight additional articles.

How has the profession been doing in the past decade? To start with, the average firm size has grown. In 2010, Canadian firms responding to the survey had a median of five employees and an average (mean) of 17.7 employees. Now, those numbers are eight and 19.3, respectively. Gross billings for firms in 2010 clocked in at a median of $500,000 and an average of $1,507,000; in the present survey, the median was $900,000 and the average was $2,736,000. The growth has been more pronounced as firms increase in size. While one-to-two-person firms went from an average of $140,000 in gross billings in 2010 to just $150,000 in 2022, firms of three to ten people went from an average of $550,000 to $886,000 in those years. Firms of 11 to 25 employees went from gross billings of $2,160,000 in 2010 to $3,039,000 in 2022, and firms of over 26 employees billed, on average, $7,200,000 in 2010, compared to $10,069,000 in 2022.

While categories of staff have changed over the past decade, as a general indicator, associates in the 2011 report made an average range of $81,400 to $98,300; while in 2023, they made an average range of $92,713 to $120,376—a notable increase, although one that falls somewhat short of matching the average rate of inflation of 2.39% annually over that period.

A significant change in the past decade has been in the area of proposals. In 2010, firms responded to an average of 62 RFPs and a median of 10 RFPs in the preceding three years. In 2022, those numbers are 79 and 25, respectively. The increase is particularly evident in small and mid-sized firms, where responses to RFPs doubled: one-to-two-person firms responded to a median of four RFPs from 2007 to 2010 and a median of 10 from 2019 to 2022; 11-to-25-person firms responded to a median of 27 RFPs from 2007 to 2010 and a median of 50 RFPs from 2019 to 2022. 

While the responses from individual staff (as opposed to firm owners and principals) will be included in a future publication rather than in the report currently available from the RAIC, the data provides some noteworthy insights. Some of these concern remote work. According to the surveys completed by those representing firms as well as by individual staff members, the vast majority of firms—around 83 percent of them—currently accommodate remote working. While there is an expectation that, on average, employees work at the office 2.7 days a week, staff reported actually being at the office an average of 3.2 days per week. Slightly over half (51 percent) of staff respondents worked in the office four or five days a week. While 39 percent of firms report that remote work has resulted in productivity decreasing somewhat or significantly, with only 12 percent reporting an increase in productivity, the inverse is true for staff respondents: almost half (47 percent) feel that productivity has increased somewhat or significantly with remote work, while 17 percent report decreased productivity, and 36 percent feel that there has been no change in productivity with remote work.

In terms of work hours, only a third of staff respondents (35 percent) work a regular 35 to 40 hours per week, while another third (37 percent) work between 40 to 45 hours, and 23 percent work over 45 hours per week. 43 percent of respondents report that firms offer time off in exchange for additional hours worked, although 38 percent report no additional compensation.

In a series of questions on the future of the profession, just under a third of respondents (31 percent) rated their outlook on the profession over the next five to ten years as eight or higher, on a scale of one to ten, with ten as the most positive score. More respondents—47 percent—ranked their outlook as neutral or somewhat positive, with scores of five to seven.

Job satisfaction ratings also cluster towards the mid-range. About two of five staff respondents (41 percent) are satisfied or very satisfied with their job, rating this as eight or higher or a scale of one to ten. Another 44 percent ranked their job satisfaction as five to seven on the same scale. Half (50 percent) of staff respondents state they have a good to excellent work-life balance, rating this as a seven to ten on a scale of zero to ten.

For both firms and staff, the greatest challenges to the profession in the next five years will be in the area of economic factors and market challenges (48 percent of staff respondents and 50 percent of firm respondents), followed closely by workplace and human resources (48 percent of staff respondents and 34 percent of firm respondents). Climate change and sustainability was also identified as a key concern by 15 percent of staff respondents and 29 percent of firm respondents, along with technological advancements and AI—a concern for 18 percent of staff and 20 percent of firms. Firms also identified public perception and awareness, along with regulatory and industry challenges, as key concerns (18 percent and 17 percent, respectively), although these were less of a concern for staff respondents, who identified these factors 5 percent and 12 percent of the time, respectively.

Ultimately, many of these factors are intertwined. “Fees are getting lower and costs (staffing, IT) are getting higher,” writes one firm leader. “It is not sustainable. Contracts put undue risk on architecture firms. In competitions and RFPs, there is no ability to negotiate contract terms, and other architects don’t review or understand what they sign.”

This sentiment is echoed by other firm leaders, who point to the need for greater advocacy, including work towards establishing an architecture policy for Canada. “There is an ever-increasing pressure to lower fees and poor public understanding of the value of design and architectural services,” writes one respondent. “Government and institutional procurement practices are among the worst, often placing the highest weight on price before quality or comprehensiveness in design. Getting a commitment from all levels of government to adopt higher sustainability standards, policies and laws [is important to] force a new baseline for development of the built environment—much like most Scandinavian countries have done over the past three decades.” Other architects reiterate the need for advocacy, at all levels: “Architects need to start pushing back on what scopes of work we are engaged in, and stress that back to clients,” writes one.

The intersecting issues of public perception and the increasing complexity of architectural work were foregrounded in several responses. “[A key challenge is] maintaining the value proposition that our services are worth what we cost,” says one respondent, who also points to “the overwhelming complexity of practice from changes in building code regulations, climate/energy performance requirements, social justice and equity considerations, accessibility, and so on.” They write: “It is becoming practically impossible to execute projects in anything resembling a timely fashion, or without employing [large] teams of specialty consultants. It is enough to have me considering leaving the profession.”

“The erosion of fees during economic downturns is rarely recovered,” notes one respondent. “It is disheartening to know real estate agents in hot condo markets are paid four percent fixed fees on sales, while architects are lucky to get one to three percent of construction value. Until architects are respected by the client groups and, more importantly, by themselves, the challenges of commissions (fees) and procurement will not change, and likely will continue to erode.” They add: “I have witnessed the decline for well over 40 years.”  

Young professionals are especially challenged in the current marketplace. “[There is a] lack of innovation and few opportunities for emerging practitioners to access work that is larger in scale than single-family housing or small commercial projects,” reads one response. Younger architects embedded in firms are also feeling discouraged, says another respondent, who points to the “retirement of those 50 and over leaving little legacy within the profession” and “reduced expectations of success among the younger generation.” At the present moment, they continue, “the pandemic has exhausted the usually energetic architects who led or who were likely to lead.” Parallel challenges are present throughout the industry, leading to a reduced quality of construction, say several respondents, one of whom notes the “shrinking pool of good GCs and trades” as a factor in “increasing architects’ scope and liability.” On a hopeful note, they add: “This could be an opportunity if addressed correctly.”

Both firm and staff respondents pointed to the need for procurement reform. “[The] biggest challenge is how to open up the commissioning and procurement process to a wider range of practices, moving beyond current habits of minimizing risk and awarding projects to a handful of established baby boomer firms, [and] moving the criteria for project award beyond the ‘How many of these have you done before?’ approach,” writes one respondent. 

Several respondents were comprehensive in their analysis of the need for better procurement reform.

“Public RFP processes ask for more and more work in completing a proposal, most of which is not necessary for evaluation,” writes one respondent. “Public RFPs are asking for three to five completed projects of the same type and scale in five years. Only large firms/multi-nationals will continue to be able to provide this, and it will reduce the ability for smaller and newer firms to be competitive.”

“Public sector contracts put undue risk on the architecture firms,” they add. “Project managers in the public sector are poor quality. Their lack of competence increases project time required and lengthens the project timeline (with no ability for further compensation on a fixed fee project). The skills shortage in construction trades means longer project construction timelines and more work for the architect, which put strain on the architect’s fee in a fixed-fee contract.”

Some of the reforms needed are in the way RFPs are structured. “The commodification of procuring architectural services by local and provincial governments as if we are simply any other service or good is continuing apace, and will be a significant challenge,” writes one respondent. “Purchasing departments are already implementing complicated, text-entry-only submissions to online platforms that disallow creative writing, sharing of images, and other elements that allow architects to fully share and sell our experience and services. This is done under the guise of fairness, but results in fee-based awards. Architecture is a creative service that cannot be purchased fairly without the ability to share that creativity at the RFP stage.”  

Another respondent writes: “Public tenders should be evaluated on quality, and not only on price. [There is a need for clients to] choose the right delivery method for the right projects. The involvement of contractors/builders is not justifiable for all modes, and this affects the quality of the architect’s work. Clients are not sensitive enough to the responsibilities of architects versus builders, and they only prioritize cost reduction. They therefore choose implementation methods that do not take into account the real issues of the project. On the other hand, customers should be more aware of the analysis of the lifecycle of the project, and thus avoid making decisions only on the economy of construction costs. By reasoning this way, they ignore the long-term financial impacts of these decisions. Clients should consider the recommendations of professionals, who take into account the quality, durability and cost reduction of the building over its lifecycle.”

Lifecycle costs are linked to sustainability, which is also at the forefront of concerns for many respondents. Some are hopeful that architects will be able to better serve society through centering sustainability in their practices. One respondent notes the challenge of “dealing effectively, creatively, and positively with climate change,” including “building more with less because of dwindling resources, as well as material and labour costs [and] designing buildings for post-disaster situations.” Another notes that “with the question of degrowth, the direct impact of climate change and the increase in the use of artificial intelligence, the role of the architect will be called upon to change and it is to be expected that our profession will undergo a major transformation in the type of support that we will offer to our private and public clients.”

What is the path forward? In the pages ahead, we take a deep dive into several aspects of the report, and the way they describe both the challenges confronting architects in Canada and the opportunities available to move in positive directions. You’ll hear from experts who have used the Benchmark Report to assess the financial health of firms in Canada, the relative state of architecture markets in the United States compared to Canada, and the new norms for hybrid and remote work. We also include analysis on the effectiveness of marketing and branding work among Canadian firms, advice on compensation strategies needed to attract and retain talented staff, and guidance for succession planning—one of the key challenges identified by survey respondents. Finally, you’ll find in-depth coverage on the state of gender equity and sustainability expertise among Canadian architects.

This article is part of Canadian Architect’s series on the Canadian Architectural Practices Benchmark Report (2023 Edition). The full report is available for purchase from the RAIC

See all articles in the November issue 

Read additional articles in Canadian Architect’s series on the Canadian Architectural Practices Benchmark Report (2023 Edition):

·        Benchmark 2023: How’s your firm’s financial health?

·        Benchmark Report 2023: Mixed Prospects

·        Benchmark Report 2023: Architecture and Capital “M” Marketing

·        Benchmark Report 2023: Firm Expectations—Managing Remote Work and Flexibility

·        Benchmark Report 2023: Women in Canadian Architecture—An Update

·        Benchmark Report 2023: Competitive Compensation

·        Benchmark Report 2023: Looking Ahead—Succession Planning and Firm Value

·        Benchmark 2023: Future Forward—Adaptive Change in Architecture Education and Practice