Melbourne Market Update – Winter 2015

11th June 2015 / Market Updates

As we arrive in the cooler months for the start of Winter, we are pleased to say that there is a lot of heat in the market to keep us all busy.

The past 6 months has seen a steady increase in the range and scale of projects that have been committed, with a resultant increase in the number of roles being created at various experience levels.

Whilst this increasing activity and demand has been seen as a positive by all in the industry, there are still sectors that are trailing others, and as a result, there are still some timid forecasts from some practices, with others being at a frenetic pace.

It’s now well documented about the level of medium density and high rise apartment projects underway, with many practices in heavy recruitment mode around this project sector.

There have been a number of new projects initiated in one-off sectors in the Melbourne market, spanning new commercial, retail, aged care and hotel sectors, however with some projects being held in the early concept and feasibility stages, and others charging ahead into construction. There are also some clients looking at some very interesting “anti-cyclical” projects in the second half of the year, although we have been sworn to secrecy regarding these – of course.

Institutional projects sectors are showing some increasing levels of activity, although still not to a high degree across the board.

From an Interiors perspective, again an increase in overall activity, with apartment interiors, hospitality and retail being most active, although there are some positive signs from the commercial workplace sector recently.

In terms of recruitment intentions from Architecture and Interiors studios, demand has been consistently strong for experienced design and project delivery professionals with client facing and team leadership experience, ideally with either Revit or ArchiCAD exposure.

High demand has continued for Architects, Interior Designers and Architectural technicians with Revit or ArchiCAD experience, or high rise experience generally. We have also seen some really interesting roles for younger Architects with strong 3D design skills with the ability to be with projects from early to mid stages.

The continued demand for Revit experience has seen experienced professionals with these skill often having the choice of multiple roles when exploring new options, resulting in a much more competitive environment for employers seeking these skills.

There has been an increase in demand for Architects with strong design skills who are active in Revit, Sketchup and increasingly those with parametric modelling skills, and we see this demand as part of the continuing trend to parametric modelling that only some studios are currently pushing strongly.

Interior Designers with Revit and strong 3D software skills are readily sought by studios of all sizes presently.

This has increased the difficulty in finding good talent for shorter to medium term contract roles, with many job seekers now in a position to consider permanent roles over shorter term ones. Whilst salaries have increased based on this demand, some firms are still looking to offer project specific contract roles and managing the increased remuneration expectations of job seekers is becoming more of an issue. Certainly clients who are flexible in terms of the software background they can consider will have better access to good quality personnel for such roles, however there may be a lead in time based on them making the transition to new software.

Whilst we are hearing competitive fees on projects are less of an issue for practices compared to the same time last year, many current projects were won in a competitive fee market and there are some difficulties in matching higher rates and salary expectations by practices – always a tricky situation in a changing market.

Increasingly, we are discussing strategic roles with studios who are considering elevating talent within or looking at succession planning strategies, and based on this are in a position to offer interesting roles that offer key career development opportunities that may include progression to Associate level and equity potential roles. It is vitally important for these studios to have a clear plan of what is available and what is attractive about their business in an increasingly competitive recruitment environment.

We anticipate rates and salaries to move ahead of CPI for the second half of the year, and practices undergoing mid year review would need to be mindful of this in how salary reviews are addressed at this time of the year.

Where to for the next 6 months?

Many practices are now looking into next year in terms of securing project flow, however Melbourne is still missing the next few “major or mega projects”, and based on this progressive studios are focused on winning the next stream of projects along with delivering existing projects as efficiently as they can.

The change last year of State Government has resulted in very few substantial Government projects in the wings, and further we are waiting to see how large development sites such as Fisherman’s Bend are to be treated, so whilst there are many potentially exciting opportunities ahead, we look forward to the large decisions that will underpin major scale projects into 2016 and beyond.

Bruce Whetters

Group Director – BT&P Melbourne

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