Architecture, engineering and environmental consultancy (AEC) firms are facing unprecedented challenges simultaneously including: managing cash flow demands, navigating cost reductions and project delays, and handling changes to utilization in a work-from-home environment while preparing for the “other side” of COVID-19 to name a few. BST Global’s Executive Vice President Javier Baldor joined a panel of AEC industry powerhouses across Europe — including Nicolas Jachiet from Egis, Keryn James from ERM, Jens-Peter Saul from Ramboll and Karin Sluis from Witteveen+Bos — to share insights on how they are guiding their businesses to remain resilient during this challenging economic environment.
The webinar forum — The European Architecture, Engineering & Environmental Consultancy Industry Responds to COVID-19 Challenges — covered a wide range of topics.
- Survey Results: A survey of 207 European firms representing roughly $104 billion in gross revenue provided some interesting data to discuss.
- In terms of organic growth, firms reached a high in 2019 but expect a decline to 0% in 2020 before bouncing back to a more normal growth of 5% in 2021.
- Jens-Peter shared, “This is a bit on the optimistic side but it really depends on how your business is shaped.
- Both Jens-Peter and Keryn explained that they are running three scenarios to prepare for the worst and prepare to achieve the best.
- The survey revealed that working from home appears to have had a significantly negative impact on utilization in Europe, compared to a 2% increase in the US.
- Karin disagreed, “We haven’t seen that as a whole. In fact, we saw a slight increase in productivity.” Karin shared that the firm started weekly discussions to discuss workflow, deployed digital tooling to see gaps, and encouraged employees to move to another field of expertise if they chose to.
- Jens-Peter shared working from home has helped the firm. “Collaboration has been outstanding. People are working better than ever and that’s very encouraging.”
- According to the survey, a little over half of firms have implemented layoffs and furloughs.
- Nicolas stated that they have deployed some furloughs but that workflow has been steady. He’s also seen the firm redeploy employees to busier areas and frozen compensation increases for the year.
- Javier said for clients, it’s all about the cash and how it is being protected and managed during this time. “It comes down to a couple of key areas; it takes discipline to that process and leadership. It has been difficult for clients if they have not been centered on that before, because it is not something you can just turn on.”
- Reopening Plans: Who is making the plans for reopening and how are you communicating it to your employees?
- Most of the panel shared that the decisions were being made by a board or executive leadership team and then regional managers were executing that. All confirmed that the safety and health of the employees were most important, and regional considerations played a key role in the reopening and reentering plans.
- Keryn elaborated, “We talk about the return to the workplace because it is not just our offices. It could be a client site or a client office, not just our own, that we also need to consider.”
- Nicolas said, “we have gradual plans to reopen. Recent weeks have been devoted to reopening and June will focus more on reentering with a little bit at a time.”
- The New Normal: How has this changed your go-forward plans?
- Javier shared, “We’ve had a history of investing in recessions including the most recent GFC and this pandemic has not abated our go-forward plans. Retrenchment and shoring up have never been a part of our strategy; we will make thoughtful investments to position us for when the tides turn.”
- Jens-Peter explained that as CEO, working from home has shifted his leadership approach, creating videos at home to share with employees and being more involved in Yammer. “I believe leadership is more important than ever, to give comfort to our people.”
- Karin said, “This is a great chance to challenge our longer-term strategy around three key areas: digital transition, diversity and sustainability.”
- Keryn also discussed sustainability as it relates to global climate change. “The global pandemic has put a sharp spotlight on sustainability issues and there’s no question that this is going to generate a significant dialog around this.”
BST Global and AEC Advisors in association with Environment Analyst have partnered to host this webinar, and AEC Advisors’ President Andrej Avelini also served as the event’s moderator. Environment Analyst’s Co-Founder and Editorial Director Liz Trew introduced Andrej to kick off the session.