Investing in employees for the long haul

May 01, 2007 |

When it comes to valuing employees, many firms offer flowery platitudes about attracting and retaining the best and brightest, but don't always back up those statements with benefits that achieve their aim. Arup's commitment to its employees actually does match its rhetoric.

Arup, with nearly 9,000 employees worldwide, has developed an impressive array of benefits at least in part to acquire staff that can successfully take on the most challenging, interesting projects it could find. Ove Arup, who was born of Danish parents in Newcastle upon Tyne, England, and founded the firm in 1946, recognized early that attracting top talent for that mission would always be a struggle.

In a famous meeting on July 9, 1970, Arup delivered what has come to be known in Arup lore as “The Key Speech,” which today is required reading for all new employees. In it, he asked his top managers why “really good” employees who could get jobs anywhere or start their own firms would choose to stay with Arup. “If there is a convincing and positive answer to that,” said the firm's founder, who was knighted in 1971 and died in 1988, “then we are on the right way.”

The firm's answer today includes top-notch benefits and multiple training and education programs. These are among the reasons Arup, the firm that engineered the Sydney Opera House and Paris's Pompidou Center, which has 82 offices in 34 countries and expects billings of $1 billion in 2007, is among Building Design+Construction's 2007 “Best AEC Firms To Work For.”

In the Americas region, with 10 offices throughout North America, Arup's ranks have risen 46% over the past four years to its current 700-employee total. This rapid growth is a vindication of its human resource efforts during a period of fierce competition for talent. Considering this staffing environment, the firm's 12% turnover in the Americas last year is enviable. About 20% of employees worldwide have been with the firm for 15 or more years.

Throughout their tenure, Arup engineers can take advantage of multiple training programs. The firm budgets about 2.5% of annual total salary for training and education. Employees average 24-32 hours a year of training, with up to 40 hours of continuing education allocated per employee. In this arena, the firm's privately held ownership structure, with no public shareholders to satisfy, offers an advantage. “It allows us to make decisions for the long term, not for the quarter-end, and allows us to invest in people,” says Elizabeth Mitchell, senior regional human resources manager.

Every year, the firm assesses its training programs and adjusts them to meet emerging company needs. In 2005, for instance, the Americas region focused on bolstering project management skills; by the end of 2006, 120 employees had attended intensive PM training.

Bonuses for career development

To encourage employees to beef up their qualifications, the firm offers a $2,000 bonus for earning professional engineering licensure. In 2006, in an effort to increase the firm's green credentials, Arup offered a bonus over a three-month period for those obtaining LEED certification. About 50 took advantage of this program, and the firm now has 100 LEED Accredited Professionals on staff. The firm also offers up to $5,250 per year for university tuition reimbursement.

Arup's Design School is targeted toward staff members with a few years of experience. Four times a year, promising young engineers from a variety of disciplines and different regions of the globe attend two- to three-day sessions. The program consists of collaborative projects that test creativity as well as communication and project management skills.

“It was a lot of fun, and a very creative process,” says Grace Yamamoto, a structural engineer based in Seattle, who attended last November's Design School in the Bay Area. Five groups of six employees, most of whom had never met before, were charged with designing a modular home that could be used by those displaced by Hurricane Katrina. The exercise not only brought together people with a variety of disciplines from different offices, it also highlighted diversity of backgrounds, personalities, and communication styles. “Some groups had very passionate arguments,” Yamamoto said.

Every year Arup assesses its training programs and adjusts them to meet emerging company needs.

Yamamoto says that Design School broadened her thinking about how teams collaborate. “I learned that everybody has something to offer, even if they don't talk a lot,” she says. The experience also allowed her to expand her internal network of contacts, which she believes will help her with future work. For instance, the Seattle office doesn't have an acoustician, but she could easily contact the one she met at Design School for help.

“The training is definitely amazing here,” Yamamoto says. Arup's extensive training opportunities made it easy for her to select the firm after she finished college. “I wanted to join a company that would understand that I didn't have experience, and would be willing to mentor me.”

Arup encourages employees to spend months or years at its offices throughout the world to work on specific projects—the firm may have 10,000 jobs in the works at any one time—or merely to broaden their horizons. It rewards mobility and fosters international transfer of skills. The firm provides assistance in handling immigration costs and paperwork for those who take on overseas assignments.

Brian Lake, a senior lighting consultant in San Francisco, relocated to London to gain a better perspective on Total Architecture. “The typical engineering approach is to spend ages in research trying to narrow the gap utilizing theoretical knowledge,” he says. “The Arup international assignment allowed me to quickly narrow the gap through first-hand design from a completely different perspective.”

Impressive benefits package

Arup's compensation plan includes the unusual practice of paying engineers for overtime work—straight time, not time-and-half—after working 40 hours in a week. “We feel that it's important that people log overtime and receive compensation for their efforts close to when they make them,” Mitchell says.

This policy benefits management, says Sarah Rosen, human resources business partner. At many firms, she says, engineers don't bother recording their actual hours, knowing that they will not be compensated for overtime. By creating an incentive for employees to record their hours, managers can more readily allocate staff resources for ongoing and future projects.

The firm also pays semi-annual profit-sharing bonuses to each employee based on length of tenure and offers a generous 401(k) plan that matches employee contributions dollar for dollar up to 10% of their salary.

Until recently, the firm's medical plan in the U.S. provided 100% coverage with no co-pays or deductibles. With skyrocketing healthcare costs, however, Arup's plan now requires a $20 co-pay for doctor visits and some services. The plan is still generous, though, with employees paying just 5-10% of premiums.

Arup's commitment to maintaining highly competitive benefits does not go unnoticed. In a recent employee survey, 92% of respondents said the organization's benefits plan is average or above average. Nevertheless, Arup continues to examine its offerings and look for ways to improve them. “We're performance-driven,” Mitchell says. “We're never satisfied.”

While compensation and benefits are very attractive, the wide breadth of interesting projects may be the number one motivator for most Arup employees. Among the firm's notable projects in 2006 were the U.S. Air Force Memorial, a stadium built for the 2006 Asian Games, the 2,000-foot-high Guangzhou New TV Tower in China, the CCTV tower in Beijing, and one of the largest private developments ever undertaken—Korea's Songdo City.

With its cutting-edge portfolio, the firm is constantly in search of new talent, hiring 50 new graduates a year, no matter the economic climate. This strategy still reflects Ove Arup's staffing approach that he outlined 37 years ago. The firm seems to be doing all that it can today to live up to that philosophy.

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