Nearly 10% of practices do not believe they will survive the fallout of the pandemic, according to the latest RIBA Future Trends survey.
But practices who will emerge stronger from the crisis have already used this time as an opportunity to re-think how they’ll operate in the future – from four-day weeks to setting up satellite studios in low cost countries.
Mark Shaw, who runs Studioshaw, is planning to introduce a four-day week in a bid to retain staff. He thinks employees would be happy to put in the extra hours in return for one free day a week.
“If there’s a deep recession and I can’t pay salaries, I’d rather staff stayed with me than go off and work for BDP,” he says.
Keeping staff has been a recurring theme for practices during lockdown – a marked contrast to 2007 when architects were laid off in droves. Some of this is driven by the departure of EU nationals following the referendum vote in 2016 – although practices are less pessimistic than they were.
In a bid to retain staff, some practices are accelerating their plans for employee ownership and shared equity while others are looking at a salary-for-shares scheme, where staff will continue to take a cut in pay in return for shares in the practice.
Retaining staff could also mean more generous summer breaks in addition to the freedom to work from home.
Last summer architect Carl Turner gave Turner Works staff two extra weeks holiday to be taken in August, which added to their existing allocation, meant the studio was effectively mothballed for the month.
Turner says: “Having seen this first hand in Denmark on trips to Copenhagen I thought we should give it a go.
“It has been a great success and with a few tweaks this is now how we will operate in future. It’s about recognising that while we can’t offer extraordinary levels of pay, we can do other things around lifestyle.”
While there’s general agreement that the 9-5 work pattern is being challenged, practice heads are warning that this will go hand-in-hand with reducing overheads and limiting risk to the balance sheet.
“Architectural practices will need to be far more nimble and agile in years to come,” says Mike Stiff, of Stiff + Trevillion.
And reducing overheads by taking smaller premises won’t be enough to save those that are struggling in the long term, he warns.
“Reducing the size and cost of premises may look very attractive” says Mike. “In a typical architectural practice fixed overheads are around 15% of the overall running cost, most of the other 85% is salaries, NI, tax – and then hopefully profit. So even cutting premises costs by 50% won’t make a big difference. On top of that homeworkers will expect the same salary and holiday allowances, so there will be no savings to be made there.”
Instead he predicts a new wave of practices setting up satellite studios in low cost countries to service their UK work. After the recession in the early 90s, the profession briefly flirted with back offices in countries like Vietnam – with limited success. But with digital communications tested and proven, the benefits to the employer may well outweigh the complexity of setting it up, says Mike.
“If you rarely see 60% of your staff, and they are banging out drawings on Revit from their spare rooms, do practices need the high wage and revenue costs of employing them in the UK? “
Aside from cutting staff and premises what else can architects do to ensure survival?
One answer could be in diversification.
This has always been tricky territory but with big challenges facing the built environment, it once again raises the question whether the definition of what it means to be an architect should be changed in order to fit better with the challenge of designing for the ‘new normal’.
Some practices have already created new companies in order to reach more diverse markets and branch into areas such as property development – which if successful can also support the architectural side of the business.
For example, Turner Works now specialises in container construction and the conversion of multi-storey car parks. Carl says the impending shake-up has only reinforced his belief that architects need to move “beyond the constraints of a service model into the value side of the equation.”
“I think the industry has been sleepwalking for many years. We all knew things were not as they should be, or at least things could be a lot better. While the music played we all kept up with our merry dance but the music has stopped, the party is over.
“While this is shocking for many and is going to lead to job losses, things have to change. I’m seeing it as a positive opportunity for our industry to take stock and ‘pivot’ as entrepreneurs say, for the benefit of not just ourselves but wider society.”
