The situation is changing quickly, but versatility and fast decision-making have become necessary.
On Thursday, March 12th, Zweig Group launched a survey to see how AEC firms are reacting to challenges presented by the situation surrounding the coronavirus (COVID-19). As of Sunday, March 15th, 77 firms from nearly every geographic region of the U.S., size range, and AEC discipline, had responded to the survey. The majority of the respondents to the survey were firm leaders, directors, and managers with decision-making capability in their organizations.
At the time of this survey, just 8 percent of firms had suspended all business travel, with the majority of firms (55 percent) conducting business travel on a case-by-case basis. Twenty-two percent of firms stated the virus has not impacted travel policies at their firm in any way. Zweig Group expects these numbers to shift rapidly as the government institutes more strict policies around social distancing in an effort to stop the spread of the virus.
With many organizations across all industries encouraging or requiring employees to work remotely, more than 14 percent of AEC firms that participated in this survey do not currently allow for any employees to work remotely and had not issued any policy changes in response to COVID-19.
WGI, a 600-person national design and professional services firm, was early to institute policy changes: “At WGI our number one priority is the health of our associates and their families. Our Crisis Management Team is working hard to review countless sources of information from a diverse array of experts and communicate across 18 offices in eight states in a calm, consistent, and clear voice. The reality is that there is no crystal ball that provides perfectly clear guidance on how to proceed. The data and trends are alarming and the COVID-19 pandemic is a very fluid and quickly changing situation. In real time we must evaluate the data before us and use our best collective judgement. Our goal is to implement a plan that addresses the potential serious health and operational consequences without adding to the fear and overreacting,” said Michael L. Davis, senior vice president and chief strategy officer, WGI.
Firms that already have the policies and technology in place to allow for remote work have a leg up, but are still seeing some challenges related to the virus.
Blackstone Consulting LLC, an environmental firm with 55 employees, currently has a completely remote workforce. Although the firm didn’t start out this way, they have found many benefits to having everyone work from home.
“As a nationwide consulting firm, this allows us to be in many markets, and the flexibility is incredible for employees,” said Stephen E. Manelis, principal, Blackstone Consulting LLC.
Manelis also cites investments in technology for virtual meetings, presentations, and the ability to share documents, as important steps in allowing for this type of workplace to flourish, as was an intentional hiring strategy of individuals who are “self-starters” and appreciate teamwork. Another benefit of this strategy: “It’s very good for retention – we have very little turnover here,” said Manelis.
The Zweig Group survey found that the average amount of workforce at an AEC firm that could work remotely was only 55 percent. Obstacles to remote work included a workforce that routinely works on-site at project locations (for example, land surveying, construction sites), and a lack of computers/equipment that could be used away from the office.
Just over half of all firms responded that so far challenges presented by the virus have not led to project cancellations, with 55 percent stating that no projects had been cancelled and no cancellations or delays were currently anticipated. Only 3 percent of firms had cancelled or delayed a project, but 12 percent were experiencing client-related delays, and the other 32 percent were still considering.
Manelis said that his firm has a couple of delays on projects from clients and expects a few bumps in the road as investors move to the sidelines with this uncertainty.
“We’re hearing from clients that there’s some hesitancy, but it’s temporary,” Manelis said.
As far as planning for an economic downturn, Blackstone’s remote workplace has a few other advantages: “Looking at our own fixed costs, knowing that we don’t have leases really helps us, but still, a lot of revenue is derived from traveling and we have to be very careful right now and do not want to contribute to the spread of this virus.”
In the survey, when asked about COVID-19’s impact on the firmwide budget, firms were evenly split, with half reporting they did not anticipate any budget changes and just under 50 percent still considering changes.
Sixty percent of respondents felt their revenue would be impacted in 2020 by an average decrease of 12 percent, and nearly 70 percent of firms stated they felt the virus would affect their overall business development activities in the next 12 months.
Despite fears surrounding the logistical challenges presented by firms’ individual and government mandated responses to try to stop the spread of the virus, most firms are feeling OK about the economy at present, with 45 percent stating economic conditions in their market are “the same” as one year ago, and 34 percent of firms stating economic conditions are “somewhat better.” On the other end, 13 percent reported that conditions are “somewhat worse.” Small percentages reported they felt the current economy was much worse or much better. Looking forward, the bulk of respondents, 47 percent, stated they felt that the economy would be in “somewhat worse shape” in another 12 months.
The best advice of all? “‘Crisis does not make leaders, it reveals leaders.’ Those firms with open eyes and a plan can address the challenges and perhaps come out strong,” said Davis.
Christina Zweig Niehues is director of marketing and media at Zweig Group. Contact her at firstname.lastname@example.org.
Zweig Group’s AEC Industry Outlook & Response to COVID-19 Survey is still open for participation. This is a very short questionnaire that should take no more than 10-15 minutes. Participants will receive a free report of this survey’s findings as well as a $100 discount on any Zweig Group research publication.