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RIBA Business Benchmarking - 2015 Report Page 1

RIBABusiness Benchmarking2015

Report prepared for the RIBA byThe Fees Bureau

RIBA Business Benchmarking - 2015 Report Page 2

RIBABusiness Benchmarking2015Welcome to the newlook RIBA Benchmarking Survey. Now produced by The Fees Bureau, this report together with our new online Benchmarker is designed to give Chartered Practices the tools you need to benchmark your practice.

Following the approach used in the other research reports produced by The Fees Bureau, weve attempted to analyse the data in such a way that it is of immediate and practical use to Chartered Practices. Youll find more data tables and a different visual display of the information compared with the previous reports.

The report remains our analysis of the research but start using the new online Benchmarker and you will be in control of how you examine the research findings. There are literally hundreds of different permutations you can specify, to examine the data in a way which is even more relevant to your own practices circumstances.

We hope you will find the results of this analysis stimulating and informative. For us personally, analysing and writing the RIBA Benchmarking Survey is a high point in the 25 years we have spent researching business information for architects. Please let us have your comments so we can continue to improve the survey next year.

Aziz MirzaVince NaceyDirectors, The Fees Bureau

Data analysis and reporting undertaken by The Fees Bureau, a division of Mirza & Nacey Research Ltd

Data collection by MRM Solutions Ltd

Research undertaken for the Royal Institute of British Architects66 Portland PlaceLondonW1B 1AD

www.architecture.com

December 2015

Copyright Royal Institute of British Architects 2015

This report is designed to be read in association with the Benchmarking website, available to Chartered Practices at www.ribabenchmark.co.uk

The information in this publication is based on a survey of Chartered Practices undertaken in 2015. Whilst every effort has been made to ensure the accuracy of information in this publication, each of the RIBA, The Fees Bureau/Mirza & Nacey Research Limited and MRM Solutions Limited accepts no responsibility for any omissions, errors of fact or opinions expressed. The information supplied may be used as an aid to decision making but it is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the information.

http://www.ribabenchmark.com/http://www.ribabenchmark.com/

RIBA Business Benchmarking - 2015 Report Page 1

Contents5: Salaries 5.1 Salaries & Dividends: Partners, Directors & Sole Principals 34 5.2 Salaries: Salaried Partners & Directors 35 5.3 Salaries: Associates 36 5.4 Salaries: Architects 5 years + ARB 37 5.5 Salaries: Architects

RIBA Business Benchmarking - 2015 Report Page 2

Background 00.1 Executive SummaryIts a diverse profession. Certainly, Chartered Practices share many of the same features - practices are generally headed by the people who own them; most are limited liability companies; the type of service offered is broadly similar with little evidence of specialisation or diversifying beyond core design services.

But at the same time, everything is different. Larger practices are focused more on new build work; smaller ones on refurbishment. Larger practices have more clients and jobs, but a smaller number of clients and jobs per head of staff than the small practices reflecting the fact that jobs undertaken by large practices are bigger. Small practices are very much focused on private housing, and in particular housing work for private individuals; large practices have a much wider spread of activity.

The research findings demonstrate that its not really possible to make general points about the profession. So in this new take on the RIBA Benchmarking exercise, we are focusing away from a single benchmark which may be applied to the whole profession, and instead encourage you to use the survey results to create your own benchmarks depending on what size or type of practice yours is. For example, the profit as a per cent of revenue figure varies significantly by practice size, as it usually includes some of the Partner or Directors pay. So smaller practices where Partners and Directors make up a larger proportion of the staff numbers need to generate higher percentage profits than larger practices.

2.4 bntotal

revenue

32,000

55%

staff employed in practices, includes 4,400 Partners, Directors, Sole Principals

of practice revenue is from housing. Majority of this is from one-off housing & extensions

124,000projects worked on by practices in the last 12 months

500 millionrevenue from work on projects outside the UK

RIBA Business Benchmarking - 2015 Report Page 3

0ProfitsPractices total profits add up to over 400m. This is 18 per cent of revenue. This proportion varies widely between practices of different sizes; it is considerably higher amongst small practices than for large ones. A key benchmark, but as it varies so much by size its important to consider this benchmark at the correct level for your practices size profile.

SalariesPractices spend 40 per cent of revenues on paying salaries. Average salaries increase with practice size, for all staff types.Use this benchmark as an aid to compare with the salaries you pay, not just against similar sized practices but against other practices with whom you compete when recruiting.

50+ staff

10 to

RIBA Business Benchmarking - 2015 Report Page 4

Practice size per cent 1 142 133 to

RIBA Business Benchmarking - 2015 Report Page 5

0.4 DefinitionsReporting PointAll data as at 01 May 2015 unless stated otherwise.

Financial data for the 12 months ending 01 May 2015, or the closest financial period for which responding practices had data available when they completed the questionnaire.

Practice SizeSize is based on the number of staff, Full-time Equivalent, and including both Permanent staff and Freelance / Temporary staff working in the practice on 01 May 2015.

StaffingAll staffing data is presented as Full-time Equivalent (FTE).

Equity Partner : a Partner who owns a share of the practice.

Shareholding Director : a Director who owns a share of the practice.

Salaried Partner : a Partner who does not own a share of the practice. In this instance, the title Partner would usually be to denote seniority.

Non-shareholder Director : someone with the title Director who does not own a share in the practice. The title usually denotes seniority.

Associate Director or Associate : a senior member of staff, below Director level, who has been given this title.

Architect (5 years or more ARB registered, or equivalent to ARB if from outside the UK) : an architect, who is fully qualified and registered with the ARB and has been fully qualified and registered for at least five years. The staff member may or may not be a Chartered Architect.

Architect (under 5 years ARB registered, or equivalent to ARB if from outside the UK) : an architect, who is fully qualified and registered with the ARB and has been fully qualified and registered for less than five years. ARB equivalent if outside the UK. The staff member may or may not be a Chartered Architect.

Technologist : Staff member who is likely to have received some formal architectural training, and is likely to be a member of the CIAT (Chartered Institute of Architectural Technologists).

Architectural Assistant (Part 2 qualified) : staff member who has received formal architectural training to Part 2 level. This includes people who are working towards their Part 3 examinations.

Architectural Assistant (Part 1 qualified) : staff member who has received formal architectural training to Part 1 level. This includes people who are working towards their Part 2 examinations.

Other Chartered construction professionals : professional, Chartered members of organisations which are members of the Construction Industry Council, eg RICS, RTPI, CIBSE, ICE, CIOB - see full list at CIC website, www.cic.org.uk/about-us/cic-members.php

Other fee earning staff : staff who offer services which are directly chargeable to clients, for example interior designers.

Office management / other support and admin staff : staff who provide a management, specialist or support role for the practice, i.e. everyone who has not been identified above.

Revenue, Profits, ExpenditurePractices were asked to source revenue data from their audited or end of year accounts, as prepared by their accountant. If that is not available, or respondents felt this provided an inaccurate portrait of their practice, then practices were asked to source data from their management accounts. Respondents were asked to answer all questions using the same set of accounts to permit a consistent statistical base.

Practice revenue : the turnover, or fee income, of the practice.

The profits figure is stated before the deduction of tax.

VAT is not included either in revenue or expenditure data. This remains the case for practices who are not VAT registered.

Building SectorsNew build : an entirely new structure.

Refurbishment : work to an existing building.

Conservation : work to buildings originally constructed pre 1919, or a Listed Building

Types of ServiceFull Service : preparation

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