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Few industries felt the adverse impact of the Great Recession as much as construction . Overall, the recession that started in 2007 downsized the industry by 30 percent, but since 2008, pay for construction professionals has increased more than 40 percent.

By analyzing market pay trends and data based on FMI’s industry surveys for construction professionals, the industry is well on the way to recovery. However, job pay levels are changing and revealing underlying shifts in the industry, according to FMI’s white paper Post-Recession Transformation.

To assess the overall labor market, an index based on FMI pay surveys for more than 15 job families was created that averages all positions. Each position’s base salary is given equal weighting (i.e., the index is a weighted average of the base salary across all positions). The base weighted average is then divided by a reference year average, for 2001 in this case, to produce an index.

As shown in the figure below, the pay index for professionals in the construction industry has increased more than 40 percent since 2008. Construction has seen a steady rise or recovery, while engineering saw a dip in 2012 but shot back up in 2013.Figure-1-FMI

In addition to the index, FMI tracked five key benchmark job families: business development, project management, project superintendent, estimator and general foreman. In general, pay levels have been increasing since 2001. Although employment levels may have receded during the recession, those with the most talent and who offer the most value have experienced pay increases.


All five positions follow a linear trajectory that is forecast to continue at the same rate. One dramatic deviation from this trend is the rise of business development, which can be seen pulling away from project management. The industry is turning to an emphasis on sales in an increasingly competitive environment. This goes beyond nurturing relationships and extends to a better understanding of owner needs and to providing solutions. A more complex sales process requires more highly skilled professionals who, in turn, require higher compensation.

By 2020, base pay averages for business development and project management are forecast to exceed $140,000. Project superintendent will exceed $120,000 while general foreman will exceed $80,000. As the industry recovers and organizations ramp up to hire, it is important for firms to incorporate these increasing labor costs into their strategic plans and budgets.

The following tables show the five jobs in the FMI construction professional database showing the greatest and least increases since 2010.

Table 1 FMI


Table 2

As expected, business development shows the greatest increase. Note that estimating, safety and project accounting show large gains, indicating that cost control through accurate bidding, safety and effective accounting are increasingly important to profitability. The rise of project superintendent pay indicates the emphasis on quality field personnel for bringing projects in on schedule and on budget.

At the same time, some traditional positions like project management have experienced slower growth since 2010. This is happening because the reduction in demand for construction projects has reduced the need for hiring in traditional positions, which in turn places downward pressure on wages. However, this is not a simple response to the business cycle; the construction industry is fundamentally changing.

A recent FMI research report points out the rise of low-bid procurement approaches such as reverse auction sites as well as diversification of delivery methods, including design-bid-build, design-build, construction manager, construction manager at-risk and integrated project delivery. Commoditization of construction is forcing the construction industry to revise go-to-market strategies and channels for new business, as well as the talent pool. One surprise in this is the slowdown in BIM, which has shown significant increases in the past. It may be that BIM has finally peaked out in the market place, at least for the time being.

The following chart shows the trend for bonuses since 2005.


Bonuses are slowly recovering for key positions such as business development, project management and estimating, while still falling for general foreman and project engineers.

One salient trend is the rise in importance of sales. Although bonuses for business development and client acquisition may be down in difficult times, they are quick to recover. The rise in base pay indicates their value in driving future business. The marketing and sales process is growing increasingly complex, as reflected in base pay increases for these jobs (construction — business development, engineering — client acquisition and proposal manager).

The future is bright for construction companies, but to be successful, firms must recognize and navigate important trends that are fundamentally reshaping the industry.

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