This year’s group of Best and Hot Firms provides a treasure trove of information across thousands of data points, from employees up to the C-suite.
This year’s Zweig Group award winners – Best Firms to Work For and Hot Firms – have been announced. As the awards manager, I’m on the front lines, so I see a lot of the things these successful firms are doing. Having gone through the grading process this year, I can say without a doubt that the trend lines are impressive.
The Best Firm survey is our largest source of data that we collect about the industry. This year, we received more than 13,000 responses totaling more than 1.6 million data points from employees and the C-suite. The results are telling.
S-corps continue to lead the way for ownership type, with just over 50 percent of responding firms identifying as an S-corp. That is followed by C-corps and LLCs at 22 percent and 15 percent, respectively.
Ownership transition has been a hot topic across the industry, and to an extent, the Best Firm survey bears that out. Sixty-five percent of firms said they have a select group of professionals who receive leadership training, and 61 percent have a select group of professionals who have been told they are being groomed for future leadership positions. Seventy-two percent of firms said they share their working strategic business plan with all staff, up from 69 percent in 2016. However, less than 50 percent of firms said they have a formal ownership transition plan in place.
At Zweig Group, we have an open-book management philosophy. Revenue data is shared firm-wide on a monthly basis. We believe this is very important to the positive culture of our firm. Twenty percent of survey respondents said they share revenue data firm-wide on a monthly basis, while 23 percent share it annually, 7 percent semi-annually, and 17 percent quarterly. On the other hand, 17 percent don’t share revenue data firm-wide at all.
With the labor shortage in the industry, firms are coming up with creative ideas to attract top talent. Different options for employees such as flexible starting times, condensed work weeks, and other perks continue to rise. Seventy-one percent of firms say they offer these options and 60 percent offer telecommuting for select staff. Referral bonuses and performance bonuses were the most common types given in 2017, at 72 percent for both of them.
The big headliner was the sheer amount of bonuses handed out to employees. According to our survey data, a collective $224.3 million was paid out to Best Firm employees in 2017, an obvious indicator that the AEC industry is healthy. The average number of all paid time off offered by our Best Firms in 2017 was 18 days, with eight more days given for holidays.
Scores were up across the board for how employees felt about different aspects of their compensation, signaling strong compensation growth and meaningful benefits. For example, 57 percent of employees say their firms offer a professional development curriculum that will lead to career advancement, and 82 percent of employees can use work time for professional development/continuing education.
Our Hot Firm list also provides us with great information about the top growing firms in the industry. Firms on this year’s list saw an average of 76 percent growth over the last three years, and grew by an average of $25.2 million over the same time frame. Firms that placed in the top 10 averaged 133 percent growth and grew by an average of $96.8 million over the last three years. While the percentage growth has continued to slow down over the last few years, dollar revenue growth is up.
Efficiency for Hot Firms also continues to improve. Net service revenue per employee for the top 100 reached $187,664, and for the top 10, it was $252,442. M&A activity remains strong, too, with 40 percent of the top 100 firms buying or merging with another firm, and with the average number of transactions being 3.3 over the last three years. M&A is a great way for firms to continue to grow and add talent at a time when organic growth can be difficult, and the survey tells us Hot Firms are finding ways to execute their growth strategies.
I could go on and on about the treasure trove of information mined from our Best Firm and Hot Firm surveys, but with what I’ve shared, I think you get the point. Best Firms and Hot Firms continue to distinguish themselves in a highly competitive industry by taking care of their employees and improving their operations. To show appreciation for all their hard work, Zweig Group is celebrating their achievements at the annual Hot Firm & A/E Industry Awards Conference on September 20-21 at the Fairmont in Dallas. Grab your cowboy hat and boots and join us!
Kyle Ahern is awards manager at Zweig Group. Contact him at firstname.lastname@example.org.