Raising the Geotechnical Pay Bar

 In Mark's Message

Recent news has reported that the Liberals are looking to raise the minimum wage bar over the next few years. It has been viewed as a controversial move that have retail and restaurant industries up in arms over how it will negatively affect their business. As controversial as it has been, many others believe it is the right thing to do to ensure employees at the bottom of the pay scale receive fair compensation for the work they do.

So, what does the recent wage discussion have to do with geotechnical professionals? Let us examine how geotechnical engineering firms make their capital. It is all about Testing and Inspection (T&I) fees, right?

If you are reading this and are a geotechnical consultant, do you use the geotechnical investigation (with associated report) as a loss leader to try to get the testing? Many years ago it used to be a pretty sure bet – get the geotechnical investigation work and you will automatically get the testing and inspection. The industry got wise to that and now there is no guarantee you will get the T&I if you do the original geotechnical investigation and report. You are left doing the investigation and report for very low to negligible margins and then competing at low margins for the T&I.

For smaller and medium-sized geotechnical firms that have been around for a long period of time and have yet to be taken over by big firms, ask yourself, what was a technician charged out at 20 years ago? What about today? Not much difference, right? How does that make sense when it costs 50% more to live now than it did 20 years ago (and arguably even more if you want to become a homeowner)?

What are geotechnical firms to do? The right answer may be to differentiate your firm and its services and find the right value proposition so that you can gain and maintain good clients. Is this what is happening? Sadly, such is not the case.

Some firms are going to find the new minimum wage laws difficult to swallow because they are playing the commodity game by giving away their geotechnical report as a loss leader, then dropping their technician rates by hiring unqualified/poorly trained technicians (some arguably not even technicians). There technicians are then paid minimum wage to be on the construction site – directing the geotechnical traffic on major construction projects. The firm then plays with their senior review time and rates to ensure that they get the job – often at razor thin margins.

Geotechnical firms at these rates and margins cannot afford to take on a lot of project risk or responsibility.  They cannot afford to take on the kind of risk that is inherent in geotechnical engineering, where the soils support the whole project. Will you as the purchaser of geotechnical services get good value? You may only get a basic report along with long pages of terms and conditions that heavily caveat their recommendations.

Pressure from the owner-contractor results in “intermittent” or vastly reduced inspection frequency on the project. Owners might be surprised if they actually read some of the terms and conditions in a geotechnical report – clauses that might say something like this: “If our firm does not conduct the construction inspection on this project, this geotechnical report “cannot be relied on.”

And what then happens in the field? Unseasoned technicians may let things go unchecked – things that could become a major construction problem later. The tech may also stop construction on other minor issues when they shouldn’t. It’s hard to find good people when you pay so poorly.

The technician aspect to our profession is just the tip of the iceberg. This super competitive race to commoditization is endemic at all levels of the geoprofessional field. It stymies advancement – who can pay for advanced testing when SPT is so cheap and plentiful even if advanced testing could save the project many times more than its up-front premium?

What is the result? – A continual race for the bottom that has potential to create construction quality issues and sometimes, lawsuits. This process simply continues to lower the bar, which has already been dropping steadily for the past 20-30 years.

Just like raising minimum wage is the right thing to do, the right thing for geotechnical firms is to not play in the “low down dirty game.” If enough firms do this then we can raise the bar in the geo-profession. Start charging what the PEO mandates in our code of ethics – “A fair fee for quality work.” Start paying technicians and engineers the sort of wage or salary that is truly fair and compensates fairly those quality people who enter our exciting and dynamic field with passion.

Engineers woefully compare themselves to lawyers and doctors – wouldn’t it be great to make that kind of coin? It does us no good to compare to other professionals. If you are going to go down that path, you may feel a bit better knowing that all the technology and machines doctors use for their good work were created by virtue of engineering! It may make you feel a lot worse to know that a good number of lawyers would not exist if they didn’t have a number of engineers trying to race them to the bottom!

Don’t fall into the commodity trap. Take pride in your engineering skills and acumen and take a small step today to raise the geotechnical pay bar by charging a fair value for your work. Believe it or not, if you provide value, in return you will find the good clients will thank you for it.

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