The Benefit of Great Benefits
January 24, 2016
As a small business owner, I’m constantly looking at the numbers and strategizing to keep Board & Vellum on a great trajectory. I am continuously evaluating where to dedicate our resources, and the biggest budget item is obviously employee compensation and benefits. It is one of those areas that is all too personal to me, as someone who only five years ago was also an employee. I knew too many other depressed architects who would sit at their desks and look at the photos of their friends sitting under the sun on some beach. Professionals in the architectural and design industries are simply not compensated well, contrary to public perception.
There is a huge pile of articles and blog posts written about how, as a bunch of creative types, we devalue our contributions, work for free, and undercut each other in fee to have “the privilege” of designing a project. It is a nasty cycle that eventually trickles down to the people who have to do that work with reduced pay and minimal benefits.
Quite frankly, it stinks. Architects often don’t make enough to cover their costs. The client gets awful service as the architect cuts back to try to stop the bleeding. The client feels he's overpaying as the deliverable is not great, while employees can’t afford to take time off or live in a decent place, and on and on. Many architecture firms do a great job at trying to stop this cycle, and I applaud them. Still, it is far too rare.
I made the decision early on to try and draw a line in the sand and treat employees well to find out if that would create a culture that shifts how our clients view our services.
You know what? It worked.
Here’s the basic premise that I operate under here at Board & Vellum: Give employees the best benefits in the industry, and make it an awesome place to work. Happy employees treat their clients well and add value to the fees that we charge in exchange for our service.
Sounds simple, right? Everyone must be doing this!
Surprisingly, no. Time after time, when I interview candidates for jobs and tell them a bit about our benefits, I get jaws dropping to the floor. Maybe because I had worked at a firm that treated its employees well, I’m always shocked at how depressing the working conditions are out there - even in a booming economy. I know that we architects have tough bottom lines and razor thin profit margins, so it requires some creativity. In the end, though, I believe it adds to our bottom line, rather than detracts from it.
Is it free? Nope. We target a conservative 12-13% profit margin to stay competitive, and it would easily jump up to 17% or higher if we pulled back our benefits and compensation. But when I factor in the non-monetary perks of this - that I don’t have to constantly train new staff (we don’t really have “turnover” here) and that our employees are loyal and are all “anointed ambassadors” of what we do here – I think the numbers more than make sense.
In the interest of raising the bar for everyone, here’s what our benefits package consists of. You may think it is a little nuts to reveal our “competitive advantage” but I’d rather just be a great place to work and have employees come here because they like us, not because they’re relieved to get some time off. Hopefully, this will inspire other architects out there to raise their benefits accordingly. We’re a secretive bunch, but I don’t see any risk, just the benefit, of pulling back the curtain. You can do it!
The Board & Vellum Benefits Package
Four weeks of vacation time. For everyone.
This is the big one that seemed so radical at first. In the end, though, the benefit is unmatched in the way it allows our team to spend quality time with their families and friends that the mental recharge rate benefit just made sense. And honestly, if you’re constantly retraining new employees, I can guarantee you that time and cost is far more than granting your team more time off. I actively encourage the staff to take time off and I model that behavior myself with plenty of generous vacation time with my phone turned off. The world still rotates.
Paid parental leave, with equal time off for dads and moms.
This is a new one that is certainly not cheap, but vital to supporting and valuing those of us who choose to have kids. In particular, so many female architects leave the profession to have children and never come back into it as there’s no great support for taking that time off. We offer 12 weeks of paid time off at 60% of your salary. I wish we could do more, and I wish that the government would jump in and match almost every other developed nation but in the meantime, this helps our team support their growing families.
A flexible schedule.
You’re welcome to work part time here, or full time and set your own hours. You’re a professional. I have no interest in noting what time you came in, whether you took a 90-minute lunch break or an hour-long lunch break, or if you want a day or two off each week to take care of your child. So many firms clock it when you come in late but not when you STAY late. It is bogus. Do your job and take care of your life. Jobs come and go but families don’t.
Normal working hours.
Aim to work 40 hours. If you work more than that because of a crazy deadline, then I’ll notice it and reward you. We don’t like making a habit of it and try to structure our workload so that we don’t get overloaded. In no way are we perfect on this front with such a booming economy, but ours is not a culture of being forced to work endless late nights or weekends. While many of our residential clients often have busy work schedules that require meeting in the evenings or perhaps weekends are ideal for them, it is critical that we as architects remind them that we have families and lives too. You wouldn’t ask your doctor or lawyer to meet you at 8pm on a Thursday, would you? We always steer our clients back to our normal working hours. When clients absolutely can’t make that work (which does happen and we’re happy to oblige from time to time), we charge those clients a 50% premium on our billing rates to help compensate the staff for the inconvenience.
Great healthcare at no cost to you.
We gave full transparency to our team when selecting a new healthcare plan. We wanted a low out-of-pocket maximum and great benefits, and we let our team select from the options presented to us. Healthcare is a huge cost, but opening up the discussion with your team about the associated pros and cons helps everyone understand what they're getting. We also offer vision,
but NOT dental insurance. The cost-benefit ratio is really horrible for dental and we presented that clearly and let the team make the decision if it was worth it, or if they’d prefer our resources to be spent elsewhere.
2018 UPDATE: We made the call to add dental insurance regardless of the fact that it isn't a great cost to benefit as people need clean teeth! We also added a secondary vision plan on top of our base one to add more coverage.
We offer a 401k plan with the company matching the first 2% equally, and then matching half of the next 2% (to encourage you to put in 4%). I hope to increase this in years to come, and right now everyone is contributing.
Paid time to give back.
We offer each staff member up to 24 hours of paid time to volunteer and support any non-profit or community group they wish. If you solicit a request for financial support on a volunteer effort, we’ll help that way too. I’ve spoken before about our role as Citizen Architects and this supports that.
Incentive to bring in work.
We’re a 19-person firm with 1 Principal, which is a bit of a rarity. Part of making that work is that our marketing and business development efforts are completely transparent. Everyone is trained and empowered to meet with clients and win projects. We routinely send all staff on client interviews, but sometimes the staff will have a connection and bring a client to the firm. To encourage this effort, any Project Associate who brings a client or project to the firm will receive 5% of the project's gross architectural billing revenue as a bonus.
We’ve declared as part of our firm’s ‘painted picture’ that we will pay ourselves in the top 25% of the local industry. We’ve carefully gone through a variety of salary reports and the AIA Compensation Report and we’re generally there. This is challenging when you realize that our firm primarily competes with much smaller firms and we have to keep our fees down accordingly, while competing for salary with much bigger firms. Still, it is worth it, and we’ll continue to do better.
Short and long term disability insurance.
This one is an easy offer, but super helpful if you get sick or need to be away from work for a long time.
If you’re a member of a professional membership that supports your career, we pay your annual dues. Period.
Support for becoming a licensed architect.
While I didn’t love the process of becoming a licensed architect, I realize the benefits to being one. Consequently, we strongly encourage and support our employees on their path to becoming licensed. We pay for study materials, classes, and all exams you pass.
Take an awesome class somewhere in something that you love. Pottery, sketching, who cares. Just love it and become a better person. We’ll pay for that up to a stipend each year, (which can shift higher if you propose an awesome class that benefits more than just you).
10 paid holidays.
In addition to the normal 8 holidays that most companies pay for, we give you the day after Thanksgiving and a floating holiday for Christmas Eve. You’re likely going to take those days off as vacation days anyway and it just seemed insulting NOT to pay our employees to take that time off. Days off like that shouldn’t be robbing from your actual vacations.
It isn’t sick time, it is discretionary time.
You’re an adult. I don’t want you to have to pretend to call in sick. Just like most places, you get 5 days of time off if you’re sick or if you need a personal day, or if you’re hungover (just don’t miss a deadline in that case, OK?). We all need those random days off from time to time. Eliminating the obligation to pretend to be sick just seemed right.
Equality in titles.
This is a big one for me that I’ve written about before. I strongly believe that all of us have something to offer our clients and part of supporting that is ensuring that we do not use demeaning titles such as “Intern Architect” or assign a strict hierarchy that tempts people to ignore the staff member with a perfectly valid idea for the person speaking with the title. We obviously all have different levels of experience, but all in different areas. Some of our staff with only a few years of experience can run circles around me when discussing numerous topics. I value that and our clients do as well because we value knowledge and not just seniority. This allows all staff to feel empowered to bring in work, be ambassadors for what we do out in the community, and have a strong foundation of self-respect.
Ownership in the direction of the firm.
Every year we have at least one retreat where the entire staff works for a day on the direction of the firm. We set clear goals with firm deliverables of how we’ll achieve them and then constantly check in on them throughout the year. The best ideas win, and it doesn’t matter who they come from. I often get sold on an idea that's different than what I thought I would have wanted. Seeing the value of the opposing position helps us all buy into what we are doing and move ahead. When things aren’t working perfectly, we all know that there’s a way to fix it, or we’re OK with living with some minor inefficiency because we know that things aren’t languishing. Knowing you aren’t stuck and that you have a say on how to keep moving is invaluable to our success. I’m sure it is also pretty great to tell your boss NO and present your counter proposal and change the direction of the company accordingly. Everyone here is smarter than me in many areas and that’s why we make such a great team.
Freedom from pigeon-holing.
Obviously some of us prefer to do certain skills rather than others. Still, we’re all exposed to all parts of the project process and consequently understand how the whole project goes together, which helps us be efficient and have ownership of how things are going. All staff attend interviews (I love the look of shock when potential clients see me walk in the room with a bright 20-something employee who shines and contributes), write proposals, review invoices, have access to our financials, run our project management tools, and participate in the specification and document production. Now, that 20-something employee isn’t leading the structural design on their own, or reviewing the final drawings, but they are exposed to how it is done properly, what their expected hours need to be and why, and how the details come together. The learning curve here is fast and steep and that’s inherent in our approach.
An Awesome Environment.
This one is the band-aid approach that many firms start with but it really needs to be the icing on the top. Having a cool office (although, in our case, our office is literally HOT which is one more reason we can’t wait to move) and an awesome space to work, of course, is a great benefit. But don’t make it ALL that you offer. Our new office is going to be a great place to work, allow space for people to store their bikes, shower, have areas to relax, play, and work. But by itself, it just wouldn’t cut it.
In short, I strongly believe that the financial cost of treating your coworkers the same way that you would want to be treated is a great business decision. Architecture firms have struggled for years with undercutting each other in fees and driving our wages and benefits lower and lower. Things have certainly shifted for the better recently, and I hope that we continue to raise the bar and give as great a quality of life as we can to our awesome team members. Architects and clients are better for it in the end.
And, when those increased benefits mean seeing more and more sunny vacation photos while I’m sitting here in the rain, it just makes me smile all the more because I know that my turn will be here shortly.
Here is what we’ve added since this post was first published.
As the firm has grown, we have continued to grow our benefits, as well. At the start of 2018, we now include great dental coverage, up to 40 hours of paid time off to study for licensure exams, reimbursement for health club memberships, a transportation stipend, and a family leave policy that offers 60% of your salary for up to 6 weeks to take care of sick family members.
Having a spot to work that values your personal life means that we have staff focused on delivering great design and service and not worrying about their personal life.