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RE: Reflections on a Great Profession

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Gerard Madden said:

None-the-less, as a profession, our fees are too low for the amount of work,
expertise, and level of responsibility we take on.

<end quote>


If have a market based economy, and there is no legal constraint on the fees
which can be charged. Then aren't the fees a reflection of the correct worth
of the work? Given the objective of business is to maximise profits, not
minimise costs. Does pushing the price up really drive work away?

I've tried pushing work away by increasing fees, it doesn't work.  In some
situations maybe we are underestimating the value of the work, versus the
cost. But mostly I think we are in line with the market, and otherwise
provide better solutions and are more helpful. The best way to drive work
away appears to be to suggest a long timeframe: 12 weeks before can start
seems  to be good, since most prospective clients already have drawings in
with the building department and have 3 months to respond to request for
further information, if not supplied in this timeframe then they will have
to reapply and pay additional approval fees. Builders and building designers
may then go away, for a faster solution, but ultimately they return, get the
idea they should get engineering first before submitting for approval, and
that they get better solutions if they work with us: compared to saying they
want calc's for council.

At this point in time I don't want to grow the business and take on
employees. Mostly more concerned about turning the work over faster, and
generating higher fees. Currently all our work tackled on a priority basis,
not in order of arrival.

If I push the fees up and the prospective client goes else where, does it
matter? Basically the answer is no, if I push the fees up for the right type
of work. That is all the troublesome work, can be driven elsewhere. I don't
want to do it, so drive it away, charge a seemingly extortionate fee. Some
one else will provide a lower fee, which the market accepts. Ultimately they
will also learn, that market rate not worth the effort, so they will
increase fee, and drive work elsewhere. This is possible because as the
small business ages, it acquires clients who value the work, and even
recommend increasing fees. Architects, and builders can recommend fee
increases because, they don't actually pay for the work, their clients do.

Also from some of the work that flows through our office, it is surprising
the extortionate fees some people are willing to be pay for garbage: they
get a set of drawings and are left with their original problem unsolved. The
original "consultant" refusing to provide any further assistance. Given the
fee they were willing to pay for the garbage, then what value my solution,
given may only require a few hours work?

The time that you spend between projects researching and developing design
tools has value. It allows you to get solutions in minutes to hours, to
demonstrate during initial talks with prospective clients that you already
have the solution, or are well on the way to knowing the solution.

The value of the work is important, not the time spent on the task. Building
spreadsheets I have collapsed days of calculations into a few minutes of
work. I have also iterated through various alternatives and generated tables
and design curves. That has value. The fee for the job is not some award
rate of pay multiplied by the time taken for the job. I hate the concept of
selling time, you sell solutions.

Creative architects and industrial designers don't idle time away between
projects. They design buildings and products which interest them. That has
value, on the next billable project.

>From what I can gather Stan as the means of working that value out and
getting paid for that value.

Ok! At present driving work away is not a good idea. But pushing fees up
doesn't necessarily loose the work. If some other engineer can do the work
for lower cost, then maybe need to think about becoming more productive.

But in your locality how many engineers can the work be lost to? If they
attract too much work on the basis of price alone, then they will need to
expand resources to get the work done in acceptable time frame. To expand
they need larger offices and more supervisors: over heads which raise the
fees. So they have to charge higher fees, which will reduce demand for their
services, thus expanding resources is risky. On the other hand small
business may not be sustainable, and thus small businesses become absorbed
by the larger business. So may have to accept changing from owner operator
to employee. In other environments change from employee to owner operator.

So there is a price the market is willing to accommodate. And business is a
real world experiment so finding the appropriate price takes time and
experimentation: risky if got employees.

If cannot accurately cost the work, and estimate time frame for the work,
have little feel for the market and its expectations of quality, and do not
experiment with pushing fees as high as possible, then will not find out
what fees are feasible.

Just because lost last job to lower price doesn't mean need to lower the
fees on next job. Try increasing the fee instead, and improve the quality of
the dealings with prospective clients. And if you have regular clients, do
everything feasible to keep them happy.

Some interesting quotes:

Thousands of engineers can design bridges, calculate strains and stresses,
and draw up specifications for machines, but the great engineer is the man
who can tell whether the bridge or the machine should be built at all, where
it should be built and when. [Eugene G. Grace quoted in Beakley &
Leach(1977), "Engineering : an introduction to a creative profession"]

"To define it rudely but not inaptly, engineering is the art of doing that
well with one dollar which any bungler can do with two after a fashion."
[Arthur M Wellington :The Economic Theory of Railway Location]

The successful producer of an article sells it for more than it cost him to
make, and that's profit. But the customer buys it only because it is worth
more to him than he pays for it, and that's his profit. No one can long make
a profit producing anything unless the customer makes a profit using it.
[Samuel B. Pettengill]


Put simply it is necessary to demonstrate the value of your work to the
client. If it seems that all your effort is just telling them what they
already know then your effort lacks value. If its seems that you just push
buttons, and everything just flows out off a computer, then your efforts
lack value. Any one can buy software, but who really wants the solutions it
outputs? Most software can code check, but it cannot find design-solutions
to the clients real problems. Really need to communicate and take an
interest in the clients needs, and be sociable, and avoid the all too common
"engineers" arrogant sense of superiority.

I think the profession could easily push its fees up if that is what it
really wanted. But do the members of the profession really want more money,
or more time to pursue interesting design problems. Why wait for the
architect to propose something unusual, why not present a regular architect
client with the unusual?



Regards
Conrad Harrison
B.Tech (mfg & mech), MIIE, gradTIEAust
mailto:sch.tectonic(--nospam--at)bigpond.com
Adelaide
South Australia







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