As we stand on the precipice of a rapidly changing industry, the echoes of the tumultuous events of 2020 continue to cast a profound shadow over today’s talent market. I thought it would be fitting to launch our newsletter by reflecting on the past few years and the enduring impact the pandemic continues to have on our industry.
It’s hard to know where we are going without looking at where we’ve been, so here’s the first in a series of articles that will paint a more nuanced perspective on how the challenges faced by our profession in the recent past continue to shape the current business landscape.
The Pandemic’s Impact on Architecture Staffing
In the years prior to 2020, we enjoyed a robust business climate – one that steadily ascended, turbulence free, through two presidential administrations for almost eight straight years. Thinking back can make you wonder if we’ll be so lucky again.
What has occurred since March of 2020 has been nothing short of unpredictable. A chaotic and nerve-wracking time where the business climate has not just merely ebbed and flowed – but rather convulsed wildly, lurching forward and drawing back. We’ve had periods of irrational exuberance and unfounded optimism, dashed at a moment’s notice and replaced by doubt and insecurity. Our collective will, strung along mercilessly by stock market gyrations, Fed reports, and geopolitical crises.
2020 was awful. However, in the period immediately following March 16th (the day NYC officially shut down), we did not suffer the “shock to the system” we felt immediately after the great recession. Business was paralyzed, some projects were shuttered, and some companies cut talent—but most held on, hoping the situation would be short-lived. Thankfully, the Fed responded immediately to shore up payrolls, and the industry remained largely intact. Disaster averted (at least within this context).
However, as time wore on in 2020 and we moved past the midpoint of the year, the architectural labor market began to diminish steadily, albeit quietly. New York City saw a sharp decline in employment, mainly due to the service sector, but the government’s efforts to maintain stability in the workforce kept the professional workforce largely intact. However, the statistics did not articulate the more nuanced story unfolding in design. Some verticals within the industry were under real strain (hospitality, retail, commercial interiors) and organically shed employees along the way, but it was not the only pressure felt in the market. Overall, employment in the field was diminishing through a combination of measures: domestic and international migration away from urban markets, cultural shifts, and competition – setting us up for what would later develop into a very real and unforeseen labor scarcity issue that continues to weigh on us today.
Urban Market Migration. People were seeking space to move closer to family, to take advantage of record-low interest rates, and they had confidence in the future of remote work. All of which spurred a dynamic change in talent demographics. In particular, New York also lost its luster for young professionals. Recent grads failed to arrive in New York as usual, with the lingering effects of the pandemic still visible and much of the city’s social amenities erased.
The Shrinking International Talent Pool. There was an exodus of international employees. Some were furloughed and could not become re-employed quickly enough to satisfy their visas and were required to leave. Some left of their own accord to be with family or care for aging parents abroad. Whatever the reasons, we must acknowledge the “brain drain” suffered by departing international talent. Surging housing costs and ever-tightening immigration policies ensure that many have not and will not return.
Shifting Cultural Attitudes. Cultural attitudes towards employment also quickly shifted, putting enormous pressure on the industry as workers’ priorities shifted to higher wages and work/life balance. The “long game” of architecture, seeming out of step with immediate gratification needs of its employee base. Some in the workforce decided to leave the industry and seek employment in new fields. Many simply chose to move from employees to employers, and entrepreneurism flourished post-pandemic.
Shift Towards Entrepreneurship. The surging private residential market allowed vast small business creation in the architectural market. In fact, in July 2020, housing starts were up 23 percent, the biggest gain in nearly five years. For many, it was a unique opportunity to respond to a confluence of events in the U.S. housing market that saw surging home values, the dire need for space, and unprecedented levels of household savings (courtesy of financial stimulus), driving the private residential design market.
Why This Matters Now
The confluence of these factors contributed to an acute lack of supply, which became a factor immediately following the pandemic when the Federal stimulus took hold and work increased. Much like many other major economic events like the dot-com bubble burst, 9/11, and the ’08 financial crisis, the pandemic has continued impacting the design field, shaping everything from demographics and culture to fees, scope, work integrity, and more. The talent market continues to fidget uncomfortably as we attempt to find footing in this new environment. In sharing insights on the ever-changing labor market, I hope we can start even more great conversations.
We look forward to hearing from you with comments, questions, and suggestions for future topics and content. Stay tuned for part 2 as we continue to examine the underlying issues of today’s talent market.