Over the past few years, running a landscape architecture practice has become increasingly harder due to several issues. The pressure of these issues has become more acute in the past few months with rising costs, labour shortages, greater compliance, tighter fees and competition.
Increased Costs and slowing work
Increasing costs have continued for all businesses but it is especially the case for landscape architects as there have seen fewer local graduates entering the market, along with qualified and experienced staff requesting higher salaries due to inflation. Although this may no longer be an issue with the signs of a coming recession, some firms may see a slow down in work. Businesses will need to be more careful about hiring and forecasting their future work and cash flow as some clients may start to hold onto cash longer. Increasing costs have continued for all businesses, but it is especially the case for landscape architects as fewer local graduates enter the market, along with qualified and experienced staff requesting higher salaries due to inflation. Although this may no longer be an issue with the signs of a coming recession, some firms may see a slowdown in work. Businesses will need to be more careful about hiring new employees and forecasting their future work and cash flow as some clients may start to hold onto cash longer as the market changes.
As the private sector starts to see a reduction in profit margins and governments start to reduce spending after the COVID stimulus starts to tail off, landscape architects may see a reduction in projects and work. There will be a need to better manage projects and also review short and long-term work to ensure that they will be able to keep employees on; this may also see a reduction in hiring in what has been a ‘hot’ market for the last 12 to 24 months.
Contractors may be more combative
With rising material and labour costs, some contractors may become more combative as their profit margins are squeezed. Contractors are also rushing to complete work to reduce labour costs while increasing the speed of turnarounds on payments. Landscape architects need to be careful that they are working with contractors collaboratively and work to assist them with queries and changes as quickly as possible to avoid delays or rework.
In recent times governments have increased compliance and, simultaneously, with labour shortages, have tried to streamline processes and contracts with a one-size-fits-all approach. This has meant that the requirements for tendering(quotation) and contracts have become the same, whether for a small park or a large billion-dollar sports complex. This approach places more pressure on landscape architects as they often don’t have the time or resources to complete numerous forms and schedules to meet compliance requirements. Many governments are also creating greater compliance requirements through online registers, panels, submissions, and planning approvals, as they seek to take advantage of the increased capabilities of portals and web3 applications. For landscape architects, we will have to increase our digital skills and determine how to streamline information into the various formats and portals that we will be required to register and meet compliance requirements.
Project costs are increasing along with the costs of financing; therefore, some government departments are seeking to cap design fees for hourly and daily rates across the industry. This move will see either less competition, below-market fees and possibly fewer firms bidding for government work as the capped rates may be lower than their labour costs. Landscape architects need to fight against such moves by the government. Many governments introduced legislation in the early 2000s to eliminate and ban industry fee scales and minimum fees to increase competition, however, they are indirectly distorting competition through capped fees during a market in a period of inflation. Also, the use of capped fees may flow from the public to private sector, creating even greater pressure on professional services businesses to tighten fees. This will, in turn, stop firms from paying salaries in line with inflation and therefore, people will leave the design industry. Thus creating a greater shortage in landscape architecture and allied design services such as engineering.
Voice your concerns
With increased pressures on running landscape architecture practices, it is time for landscape architects to raise their concerns with their local landscape architecture organisation, government departments and clients. In a market that has tightening work whilst also increasing costs, it is these times that governments need to assist design industries, not create greater pressures. The assistance should not be through tax rebates or funding more projects, it should be through taking a more collaborative approach and through tailoring their approach to tendering, fee approvals, compliance and reporting requirements. The landscape architecture profession is only a small part of the broader built environment industry and should be given more assistance as we lead projects and initiatives in assisting governments to reach their livability, sustainability and carbon reduction goals. I implore all landscape architects to voice your opinions and concerns to your local landscape architecture organisation and government departments.
Article written by Damian Holmes, Founder & Editor of World Landscape Architecture.
Image Credit: Flickr Christophe BENOIT
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