Architecture and the Recession: The Benefits of Licensure

We’ve all heard about the possibility of an impending recession, and we’ve seen the massive tech layoffs: 18,000 Amazon employees, 10,000 Microsoft employees, 7,000 Salesforce employees, 1,300 Zoom employees—and the list unfortunately goes on and on. Whether or not the economy is actually experiencing a recession is commonly defined by unemployment rates, so seeing these numbers has people paying extra close attention to how the economy is faring overall. 

Our current unemployment rates are still holding at a respectable 3.5% (the unemployment rates during the recession in 2008 peaked around 9.5%). So while a recession may not be immediately imminent, the news of these mass layoffs in tech, combined with the news about Silicon Valley Bank this week, has people asking questions about the impact on our unemployment rates and economy as a whole. Is the tech industry an indicator of what's to come for all of us, or are they an anomaly? 

To answer this, let's look at why these layoffs are happening for the tech industry. The number one contributor to the tech industry's current turmoil was the massive hiring movement a lot of tech companies undertook during the pandemic. As the need for remote work soared, the tech industry met the demand by over-hiring. And now, instead of plateauing at the top, they’ve had to lay people off to sustain the “new normal” demands.

What Does This Mean for Architecture?

Now for the question that is more of a concern for our readers: How is this looming possibility of a potential recession affecting the architecture industry? Let's look back to where it started with the tech industry: the Covid-19 pandemic. As the pandemic shut everything down, the architecture industry froze. Firms initially lost work or had clients put projects on hold. 

But as it became apparent that this was not a short term pandemic that would end after a few weeks, clients started thinking long term and work began to pick back up for the architecture industry. Projects that were put on hold when the country shut down were put back into motion; new projects emerged with the need to combat the dangers of Covid-19. 

However, because of that initial freeze, our industry remained wary of the possible job security implications, and we didn’t see the massive hiring effort that the tech industry did. We maintained a more conservative approach—and that should give those of us in the architecture industry some comfort going into this new economic landscape. 

How to Be Recession Proof: Get Your License

Even though things aren’t all doom and gloom in architecture, there were some layoffs during these last few unstable years. As the industry tries to protect itself, we as individual architects need to work to protect ourselves as well. So how do we do that? The biggest way to make yourself the most valuable employee, or new employee candidate, is to obtain licensure. 

Firms care about licensure for a number of reasons, with the obvious being you need licensed architects to stamp projects and receive permits. But at the same time, not every member of a project team needs to be licensed to complete a project. So why should everyone pursue licensure? There are actually a few different benefits:  

Firms Need Licensed Architects to Stay in Business

In some states, architecture firms operating under certain types of business structures must maintain a minimum percentage of licensed individuals on their staff. For example, architecture firms designated as a limited liability company in the state of Pennsylvania must maintain licensure for 66% of their members and managers to operate as an LLC. 

In California, architecture firms require licensure for each director, shareholder and individual in a parent company to be a licensed architect. If you’re applying for a position at a firm that has requirements like these, already having your license will make you a more competitive candidate over someone who isn’t yet licensed, because you’ll be helping firms meet those requirements without any investment on their part. 

It Helps Firms Hire New People

In addition to helping firms meet their business license requirements, hiring licensed architects also helps firms advertise and make themselves appealing to additional future hires. A lot of firms like to be able to advertise to future employees that the majority of their staff are licensed. This way, ARE candidates know that all the effort they’re putting into obtaining licensure will be valued once they’re on the job market. 

If you already work at one of these firms that promotes how much they value licensure, it also benefits you to be able to meet that standard and support their goals in this area.

The Financial Benefits of Licensure

A lot of people get their license because it helps them earn more money over the course of their career—and this is a really good benefit of licensure. Having your license not only keeps you safer at your current firm during uncertain times, but it also entitles you to a raise at most firms! 

According to the 2021 AIA Compensation Report, 74% of architecture firms increase employee salary after they complete licensure. Although the salary increase percentage can vary greatly by firm, it's not out of the question to ask for as much as a 9% salary increase.  

Lots of firms have adapted their pay scales to be strictly dependent on years of experience, degrees earned, and licensure status. Large firms are more likely to have these solidly defined wage tiers, and employees report that they value the transparency of knowing what they need to do in order to meet their financial and career growth goals. 

Become a Better Architect Long-Term

Other than monetary gain and career growth opportunities, licensed architects report that taking and passing the ARE actually made them more knowledgeable designers. The ARE makes candidates prove that they are knowledgeable in all aspects of architecture—including managing projects and running a firm, which is something a lot of designers might not have direct experience in. 

Studying for and passing the exams gives candidates this exposure to material they previously wouldn’t have encountered. In turn, this makes them more confident moving forward and progressing in the field after they pass their exams and get licensed. 

So while it seems like the architecture industry is weathering the potential recession storm—at least better than some other industries—it’s still worth it in the long run to get your license. Whether to land that new job, advocate for a raise, or even just to increase your knowledge and confidence as an architect.