Professionals in the consulting engineering sector must rely less on fee scales and work out their fees using an online system.
This is the word from Simon Berry, director at Fresh Projects, who says the industry suffers significantly due to the actual costs of a project versus the fees derived from scales that are quoted to win business.
According to Berry, getting the costs right is critical as the current trend of discounting will continue the downward spiral and result in massive damage to the industry.
Consulting engineers must find technology-driven ways to calculate appropriate fees, he states.
"There are too many consulting engineers who resort to offering heavily discounted project fees against the fee-scale structure, without knowing the actual cost of the project. This effectively reduces profitability to unrealistic lows and makes for an uneven playing field. It is also dangerous as businesses make losses they are not necessarily aware of when quoting," says Berry.This approach has such significant knock-on effects and does not bode well for the future of the industry in terms of general business growth, overall profitability and skills development, he says.
A significant drop seen in the civil engineering sector, coupled with the fee-scale discounting issues will adversely affect the market. "Not only will there be less work, but the fees earned, based on uninformed discounting, will make it near impossible to declare any reasonable profits. This will not only kill an industry, but it also sends the skills within the industry packing."
Berry says in an effort to be more fairly remunerated, many engineers move into other sectors or immigrate to get better salaries and growth opportunities: "This adds to an already acute skills shortage within the engineering sector in South Africa."
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