Structural Engineering Fees - is it broken? 20

[Enhineyero]

Hi guys and gals, do you think that the current level of our fees is where it should be? In my experience, structural + civil fee is usually no more than 2% of the total construction cost.

I've seen numerous debates about how real estate agents get 5% commission for what seems to be less responsibility and work, this is for each time the property is sold (imagine selling the property 10x over and benefiting from the capital gains!). Do we (engineers) just have it bad? or do they (Real estate agents) just have it soooo good?

If we have it bad, does anyone have a solution? Most engineers talk about this issue but no one really does something or tables a solution for it. I even saw a video of Ashraf (founder of ETABS) discussing this issue but, again, no solution presented.

 

[XR250]

Honestly, I am compensated quite well doing mostly residential and light commercial work. I am fortunate to be in an area with a fair amount of money and I have a pretty good reputation for my drawings making sense and not being overly onerous. I'm quite sure I make as much as most Doctors in my area.

 

[phamENG]

XR - is that you wages, or your wages + profit? With my wages + profit I can easily see where I could make as much as a general practitioner's wages in a small practice. But I don't see it ever coming close to what the owner of said small practice makes (wages + profit) unless I hire a few engineers and drafstmen to crank out a higher volume of work.

 

[XR250]

XR - is that you wages, or your wages + profit?

It's what I take home at the end of the year - wages plus LLC distributions. I have very little overhead - under 20k per year as I work out of my house.

 

[Enhineyero]

Can't help but feel that we are the suckers in this industry. Our brothers/sisters i.e. builders, realtors, and architects (hmmm not sure if they have it as good as the first two) are doing well and that's good for them. But what can we do about this issue? to make engineering great again (LOL)? It seems from the discussions above that there is no real solution or rather everyone is too busy thinking about their bottom line.

I feel ashamed that I advise young people not to get into our profession (structural engineering), especially those planning to study civil engineering, it would be irresponsible not do so. I just cant encourage people to be a structural engineer given the amount of knowledge (both technical and practical) required, responsibility/liability, and time the job demands for a pay that is next to nothing (or at least when compared to their peers).

One of the few things I worry about is that the profession will slowly die (I imagine that information, about how bad the industry is, spreads faster now that we have internet compared to the 80s/90s, just look at university engineering enrollment trend) and those in it (us) didn't do anything to protect the profession they once loved.

 

[IRstuff]

One issue with price inelasticity is over-supply; if there were fewer SEs, people wouldn't be so cavalier about low fees, since they would presumably have trouble finding a replacement at the same price point. Many other professions have built-in scarcities to ensure good fees.

Nevertheless, don't feel that EVERYONE is doing well; my wife is family practice, and she make less than me, and WAY less than almost any other medical specialty, e.g., dermatologists, etc. pull in double or triple what she does. Anything to do with surgery, even in-office, pulls in big bucks.

TTFN (ta ta for now)
I can do absolutely anything. I'm an expert!

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[KootK]

But what can we do about this issue? to make engineering great again (LOL)? It seems from the discussions above that there is no real solution or rather everyone is too busy thinking about their bottom line.

I have a solution that I've been espousing here for years. I promised myself that I'd stay out of this thread because these ones always just leave me feeling sangry. But, alas, I can take no more.

STEP #1: Recognize the true nature of the problem. Because of the graphs shown below, it is the deliberate nature of our work that very few problems actually arise regardless of the quality of the engineering. Effectively, poor structural engineering has no meaningful consequences for our clients (sounds odd, I know). That is a goddam huge problem because it means that the people who hire us cannot discern the work of a good structural engineer from the work of a bad structural engineer. This leads to us all racing to the bottom technically and, instead of competing on the basis of our core competency, competing on the basis of stuff that anybody with a decent head on their shoulders can do such as responsiveness, buildable designs, pretty drawings, project management, and oral pleasuring from the sales guys at Xmas.

STEP #2: Structure things such that good structural engineering has meaningful consequences for our clients. Since we can't dial our safety factors down to unity, I propose that all structural engineering work should receive a truly meaningful peer review from someone truly qualified to conduct such a review (me, Fazlur, or Leslie probably). I propose that this review be anonymous, be capable of putting an indefinite hold on permitting, and be associated with a fee designated of X% of the building cost no matter what the EOR charges. It is conspicuous that many of the jurisdictions that currently pay structural engineers well are high seismic jurisdictions with some combination of a) meaningful peer review and b) obvious consequences of crap design in the public's recent memory.

One of the few things I worry about is that the profession will slowly die (I imagine that information, about how bad the industry is, spreads faster now that we have internet compared to the 80s/90s, just look at university engineering enrollment trend) and those in it (us) didn't do anything to protect the profession they once loved.

That would probably just reduce the supply of structural engineers and, therefore, improve the demand and the compensation for them. If the rest of you would like to commit seppuku and leave me as the lone guy capable of designing Mega-Talls, I'd be down with that. Not that I actually am capable of designing Mega-Talls but I'd not let that stop me trying.

 

[KootK]

Oh, and setting up this universal peer review process will be a form of collusion. But it will be collusion in the form of professional self regulation and industry betterment. We'll keep our halos in tact. Because of market pressure to do less technically, I truly believe that the public is currently not getting structures of the quality that they think they are getting, that our codes and standards imply that they are getting, or that our profession tells them they are getting. I think this fight is the good fight.

 

[skeletron]

You actually have a point with the peer review issue. They are doing similar to that in BC and have been pushing for it for years. So, if everyone adhered to that notion (consequently viewing all Part 9 buildings as Part 9 with multiple Part 4 areas), Engineer Alpha would need to include a review fee on their project to pay toward Engineer Beta's review. In a cyclic method, the collective fees would increase a nominal amount that also puts the "butter" but not necessarily the bread on each Eng's table. So, an increase in workload Yes, but also security that a minimum standard (and fee) are being provided.

 

[structuralCADspecialist]

By BC do you mean British Columbia? They only have selective peer reviews in British Columbia. Larger unique or higher-risk projects such as Vancouver House would be reviewed by an external, 3rd party. Most of the taller concrete buildings have only been peer reviewed internally, which is partially responsible for spawning this beauty of a web page:

https://www.theultra.win/

. There's currently another tower in Langford (near Victoria, B.C.) with apparent problems as well. I wonder if this is as much an issue as our codes being too hard to follow, as it is an issue with the firms themselves. I can only suspect there's worse examples that will never be discovered.

I've always thought that California (and the other Pacific states) had much more stringent requirements regarding how buildings were peer reviewed compared to Western Canada? Their drawings look world's easier to deal with.

I can see why firms are dead-against 3rd party reviews. You have your intellectual property raped and pillaged. Ultimately it's better for the industry, the general public, and immensely helpful for young graduates. It would also increase demand. In the city I live there is a 'click' of engineers who kind of have one another's backs, but work at separate firms. Not to mention the fear of retaliation. There would therefore actually need to be peer reviews of peer reviews.

 

[Enhineyero]

I promised myself that I'd stay out of this thread because these ones always just leave me feeling sangry.

KootK, I apologise if my post made you sangry. Just want a healthy discussion about a relevant issue in our profession, in the hopes that it pushes us in the right direction. My observation is that many of us know and experience this issue (in varying degree). However, I don't see any professional organisation talking about this, so here it is.

Its like a cancer that slow kills us but we don't really talk about it or do anything to fight it, it is as if we have already accepted our dire fate.

 

[phamENG]

Its like a cancer that slow kills us

Not that it's much consolation to those of us practicing now and in the next decade or two, but I think you're taking a short view on things here. Just as most of us have local market cycles, our entire market also has macro cycles. Right now, we have a situation where supply and demand are in balance at a value point lower than what we want, but still within an "acceptable" range. If it weren't acceptable, we wouldn't be here. It's likely that our fees will continue to decline for reasons KootK mentioned so eloquently above until they either reach an unacceptable range or they start forcing hiring freezes in the majority of firms. Once that happens, supply will begin to decline and fees will begin to stabilize. As long as supply remains constant or continues to grow relative to demand, then no - there really isn't much we can do short of collusion.

Perhaps somebody can put together a really detailed, informative, and convincing (probably needs to be near brain-washing level) continuing education series and take it on the road. Go market by market and convince people that they all need to make a collective bump in fees. Of course, until supply contracts, they're will be someone willing to buck the trend and pull a bunch of work away from those who have driven up their fees.

 

[OSUCivlEng]

Stop working for architects. Market the architect's clients and make the architect work for you.

Yeah I know it sounds crazy and it wouldn't be easy, but I don't see another solution to the problem.

I don't care much for architects and the way they beat down their subs (structural, civil, mech, elec.). That's why I didn't stay very long in the vertical world.

 

[CrabbyT]

Here's my solution: we need better words and phrases. We need language that people immediately recognize as important, but have no real understanding of what the important thing is. And they have to sound expensive, and there can be no compromise. The words also need to imply a threat.

Class I Div 1 comes to mind. That phrase deals with explosions, and people will pay a premium to make sure they don't explode.

We need things like that.

So, Client, you want to build a Mega-Tall? Well if you don't want it to fall over and crush everybody, you'll need a Grade 5 Sector 3 Big Chungus Brace. And it's gonna cost ya twice, because it's about to get complicated.

 

[Brad805]

Kootk, the new APEGBC firm regulations will curb a little of the problem. They plan to complete firm audits within 24mon of registration. Having been thru a random review years ago they are quite thorough.

https://www.egbc.ca/Registration/Registrant-Firms/Firm-Regulation

Much of this problem boils down to us (myself included), not being incredibly good at the business end of things. You can see it here time and time again when people are talking about fees. The first thing we do is start figuring out how much time to design, engineer... Even after that process many of us end up beating ourselves down because it seems like an interesting project. Business people start with, how much should I be paid for the risk I am being ask to take on. We take on ludicrous risk in many cases for what we are paid. At one of our annual insurance conferences the gross profit of consultants was compared to a grocery store (1.8%). That is so sad. I know one of our clients targets 18%. We are also terrible at promoting ourselves. I was at the Lillehammer Ski jump on a tour. The tour guide was going on and on about the Architect during his talk, so after I went up and asked him who the engineer was for the project. He had no clue and seemed perplexed when I said, the structural engineer was infinitely more important in this design. The talk at the Japan Skytree gave a bit more credit to the massive engineering feat, but there was still a bit too much talk about the Architects. I did finally find a statue of a Civil engineer in Norway.

 

[KootK]

Thanks for the info Brad805. It sounds as though I'll have to do a little work to be street legal in BC myself in the near future.

As for self promotion and public perception, I feel that we really lost out when master builders split streams into being Architects and Engineers. For most buildings now, it seems to me that it truly is the case that:

1) Architects develop a vision and exert most of the creativity that goes into a project and;

2) Structural engineers mostly just do their darndest to make the architect's vision a reality without obstructing it too much.

In the imagination of the public, it's always going to be the creatives and visionaries who are most celebrated. It took some very talented people to make Steve Job's visiion come to life. But, outside of arcane groups of specialists, nobody gives a crap about any of those folks. And we kind of are those folks in our own space I'm afraid.

 

[MIStructE_IRE]

Architects get the credit, engineers get the blame. Look at any historic success vs failure headlines and you’ll see that’s true.

Changing the public’s perception is difficult when our whole purpose on many projects is to make it look like we were never there!

I even had one client on a domestic job in the past, where I was hired under the architect’s wing, refuse to pay me and then ask “what did you even do?! I can’t even see any of the structure!” Christ almighty! THAT’S EXACTLY WHAT I DID!! Maybe a nice chunky column through her dining room table would have kept her happier!

 

[Tomfh]

You joke, but that client probably wanted some expressed structure, and you’re telling her, No, you didn’t, you wanted hidden structure, which is what I gave you.

Architects have beaten into us that structure is dirty, and is to be hidden. But it’s not always the case.

 

[North2South]

I work for a small firm, and our fees seem to be steadily rising and we bring in a lot of work. One thing I have noticed is the senior engineer always does a great job of:
-Building relationships with his clients (architects or contractors or owners)
-Explaining what we did during design to save the client money, keep complex design elements and/or facilitate and/or speed up construction.
-Staying involved during construction to make sure it is built per the drawings. When it’s not, the contractor has the option to tear it out or pay us to design a fix.

At the end of the day, we get repeat clients, some who tell us to name our fee, who enjoy working with us, see our value, and end up with a structure built to the drawings. I’m sure it took the senior engineer a while to build his reputation like that, but it sure seems like a great model.

 

[Akeee]

I partially agree with KootK,
But in my opinion things (at least in my area) are going south because mainly of : 1.us (as engineers community) and 2.government. I will explain why I think this:
1. There are 2 parts here :
a. As KootK explained very well with that graph, problems (real ones, not some extra cracking or extra deflection) are very rare and so there is no clear border or performance criteria evaluation and because of this some part of our community decide that the risk of doing a bad job (going under code limits and underdesign it)is financially worth it. So they win projects by low construction price/m2 (our final clients are only interested in costs) and also create a pressure for the other firms to make compromises so that they survive in this market. This creates a big pressure for final steel and concrete quantities - if we want to take a project beside the architectural demands are also quantities ones that most of the time put us in the situation of making compromises.
b. As I call them "damping prices", low design costs made by small firms with no maintenance costs, no software license, no office. Of course this projects are poorly made but again there is clear design performance criteria so for their clients low cost means more money for them (especilly architects). This creates a pressure for the price of the design.
So, at least here, if you have low/medium price for design and low steel and concrete quant consumption you are a jackpot for the market. Nobody will ask anything else, there is no verification for your design (no real one at least). I design in an active seismic zone with high pga but everybody seems to forget the last big earthquake and the only thing that matter are short term profits.
2. Government - they should supervise and make sure that what I said in 1. is not happening.
I did not say what low price are or by what constructions costs are acceptable, this are changing every time from bad to worst. The more firms take risks or damp prices the lower the "market standard" goes. This is a delight for our clients because they get low design costs and low building costs at our own risk ... and we did this, our community. Its sad but is true, at least where I am this is like..

 

[MIStructE_IRE]

If buildings actually fell down I’d be driving a ferrari..

The real problem is there are no consequences for being a bad engineer. Which means, us good engineers (or at least I like to think I’m one of the good ones) get nothing more than the bad ones.