Market Update: Melbourne Architecture & Interior Design, May 2022

12th May 2022 / Market Updates

As we head into the cooler months, the market remains hot across most sectors, and 2022 seems poised to continue on a positive path following a strong year in 2021.

This buoyancy has been driven by a number of factors and the reality is it’s an employee’s market at the moment, with a large number of practices of all sizes looking to engage new staff. That said, the second half of the year looks to potentially bring with it some challenges.

Photo: Mitchell Luo

Let’s first have a quick look at the last two years, which has seen extremes in job opportunities; from large numbers displaced in the early stages of the pandemic in 2020, to then rebounding so quickly that further lockdowns just saw more projects coming online during 2021, with a large demand for staff as a consequence. An additional driver is that savvy studios now are addressing strategic growth after two years of reactive recruitment, so we now are in an environment that is recruiting around high current project demands and at the same time focusing on strategic recruitment – building strength in leadership, design capability and business development areas.

Given these high activity levels, many practices are working hard on their employee offerings to ensure they are an employer of choice, not only to attract new recruits but equally, to retain their existing stars. Our recent Employee Survey has highlighted several factors driving employees and job seekers currently – flexibility, finance and future.

(Please click here to request a copy of our Employee Satisfaction Report)

Currently, many candidates come to us looking for a workplace that offers flexibility through hybrid work practices. and employees feel as though they have worked hard through this time, so they are now looking for increased salaries. Interestingly from the survey, few are seeking roles that offer future career development; possibly a result of so many battening down the hatches during the pandemic era – indeed the majority appeared to feel safe in their future given how busy things are. This is quite a striking element, as practices are offering strong salaries and ongoing financial incentives for those who are ambitious and want to push their career forward, seemingly however, the number of people that want to elevate themselves are at a relatively small level. This opens massive career opportunities for those that want to step up the ladder now! For many, the “future” part of the equation relates to a feeling that they do a good job and will leave an employer if they don’t get what they want. Having said this, the great resignation for the sake of it hasn’t been a large driver – it’s more what people want, they will go for.

Photo: Lycs Architecture

Salaries have indeed risen steeply around high demand, and salary reviews mid-year will be an interesting time for studio management. How to balance expectations of large salary increases from staff with longer term business viability is already a point of discussion given the potential headwinds in front of us all.

So why is the market so busy now – what is driving these high levels of activity given there are so many external factors that are creating uncertainty?

Certainly, the pandemic period skewed certain project sectors – universities, aged care, commercial, retail and hospitality that were all placed into mid-term uncertainty have now rushed back into viability as we open up post COVID. Government spending in health, education and infrastructure continues solidly, along with a number of sizeable commercial / mixed use projects taking off, and the medium density residential market remaining strong. Interiors is following through strongly with many opportunities currently available.

Photo: Fabian Mardi

So, what roles are out there?

Simply put, we are hiring across all sectors and levels with strong demand from graduate through to Associate Director appointments for Architects and Interior Designers, along with Revit and ArchiCAD skilled technicians at all levels of experience. Positions are predominantly permanent salaried roles, however numerous contract opportunities offering six-to-twelve-month contracts at enticing hourly rates. Our current roles are available here (insert link to Melb jobs on website).

All this to say, as we know, markets can change rapidly, in either direction, and these are unusual times.

Interest rates are now on the rise, State and Federal elections are locked in this year, and the international situations in Europe and China are having an impact on confidence, along with supply issues and their inherent cost pressures. Add to that staff shortages, and it’s clear there are many moving parts that will have an impact on the architecture, interior design and construction sectors. Inflation is one area to watch closely as its impact will be a key driver ultimately.

With the volume of work already underway, and a whole lot more yet to kick off, we anticipate good demand for staff going forward. However, it may be that we have reached a peak in the market and the myriad of external forces will impact activity going forward, so we can expect the potential for volatility in some project sectors whilst others remain strong over the next 18 months.

Confidence and availability of finance have always been the biggest drivers of our industry, and in some respects, these will be challenged in the coming six months, and at the same time, more projects will emerge – so interesting times ahead!

That’s the extent of our future gazing for now. Trying to predict anything with more clarity than that requires far cleverer minds than mine!

Bruce Whetters

Partner – Melbourne

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