Tuesday, June 24, 2008

Dealing with the downturn

Came across an internal memo one A/E firm president sent to his employees last week and it had some interesting data that many of you are likely experiencing in your firms. This firm, which will remain anonymous, has grown between 12 and 15 percent annually for many years. The firm has invested in its infrastructure over the last couple of years, but the firm is unhappy with its financial performance. To remedy that, the firm plans the following actions:

* Confirm revenue accruals on every project immediately. The firm plans to do this in the next few weeks.
* Conservatively manage overhead expenses, particularly in regard to travel, training, and conference activities. The firm will defer all training until the next fiscal year, with the exception of some internal WebEx and online continuing ed training.
* Reduce G&A costs. The specific goal here is to reduce indirect labor.
* Minimize distractions and disruptions that focus attention away from project and performance success.

If this discussion hasn't already taken place in your firm, bring it up at your next management or company-wide meeting. These action items are a good starting point on how you can tighten your belts and weather the economic storm affecting A/E firms right now.


1 comment:

Anonymous said...

at your firm do you have a percentage goal of total indirect labor to net service revenue ?

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