Last month, Rethinking Construction author Sir John Egan bluntly told a group of undergraduate QSs that the construction industry would no longer be needing them to count the cost of a project – computer technology would be doing it instead.
This was not exactly news to QSs. The survey found that 58% of respondents think their traditional cost-modelling role is under threat and likely to be replaced with software packages in the near future. They believe strongly – 75% of them – that unless they start to offer a new range of services, their business will be taken away by other professionals. Accountants and management consultants are cited by 70% as the most dangerous predators. Another concern for more than 70% of the sample is that "QS business in the UK is due to become concentrated in the hands of fewer and larger companies".
Almost 60% of QSs are critical of the way practices are structured, saying that the traditional partnership is outdated. Backing up this figure, 56% also think the profession is dominated by an old boys' network. However, few seem to have made the connection between this and the graduate recruitment problems of recent years. A massive 82% think quantity surveying should be an attractive career choice for new graduates, but a disturbing number reality-check this by adding "but it isn't".
The vast majority of QSs were well aware of the need to change their ways long before Egan's scathing speech or last summer's Rethinking Construction report, which many thought sidelined the profession. But they appear to be doing little about it. Traditional QS work still dominates. Irrespective of size, tender and contract work are still the most common services on offer in 90% of firms. Many talk big about project and facilities management, yet only 9% and 2% respectively offer these disciplines.
Firms should be concentrating on high-fee generating services such as cost-planning, site-planning, and management and procurement advice. Life-cycle costing, arbitration and technical auditing are also growing markets. "What QSs used to do is fading. In the meantime, what they now do is growing," says Davis Langdon & Everest senior partner Paul Morrell, an advocate of skills such as life-cycle costing and procurement advice. Morrell thinks that traditional quantity surveying, especially calculating bills of quantity, is on its way out.
Bucknall Austin managing director Tony Bevan agrees. He explains why there is no longer any point in persisting with low-fee tendering work: "Throughout the 1980s and especially during the recession, the traditional QS work of tender preparation and cost control became seen as a commodity and less as a professional skill," he says. Because of this, "some major client bodies are now prepared to pay more per hour for a car mechanic than for a QS.
At times it's a struggle to charge more than £30-35 an hour compared with an accountant's £100 an hour. No business can survive on those kinds of levels." In a bid to reposition themselves to attract higher fees from clients, many practices have simply stopped calling themselves QSs. Bucknall Austin's staff are construction economists; EC Harris employs capital project and facilities consultants.
Marketing strategies have changed, too. Both the above firms have undergone corporate rebranding – Bucknall Austin's was announced last week (11 June, page 20) – to emphasise their ability to offer the multidisciplinary consultancy. Property and facilities management, project management and even management consultancy are on offer alongside quantity surveying. Gardiner & Theobald has changed its logo as part of a rebranding exercise and Gleeds, too, is reviewing its corporate look.
Such firms see their closest competitors as being management consultants and accountants, although they still expect their own construction expertise and lower fees to give them the edge.
Michael Coates, senior partner at G&T, adds a new dimension: "Our competitors to a greater degree are some of the more sophisticated construction management companies," he says, mentioning Mace, Schal and Bovis in the same breath. "In a way they are a greater threat than accountants and management consultants who apply a higher rate of charge than we can." But in a can't beat 'em, join 'em move, Coates is expanding G&T's own management consultancy division, now 100-strong and growing.
It is true there will be fewer big players in the market – eight of the top 10 firms are bigger than they were 10 years ago, according to DL&E's Morrell. But there will be a place for crafty niche players with specialist skills or good reputations in a particular sector. As long as they can maintain their client base and are self-governing partnerships, rather than limited companies with shareholders who may be open to offers, they cannot be forcibly taken over.
That said, even smart small to medium-sized firms are susceptible to being bought out – witness DL&E's most recent acquisitions, housing sector specialist QS Poole Stokes Wood and engineering services specialist Mott Green Wall. And DL&E is determined to get bigger still. Says Morrell: "We still have a couple of voids we want to fill." He also predicts that two of the major UK QSs will merge in the next two years.
Morrell cites another reason for the company's purchases: "The bigger your turnover, the more you can keep control of IT costs." He believes these costs will be a huge problem for smaller firms: "The IT burden is going to become enormous for practices who want to play at the highest level." DL&E currently spends 3% of its turnover on IT, including its investment in extra bandwidth.
The odds may be stacked against small and medium-sized practices like Cyril Sweett, but the managing director of the 220-strong firm, Francis Ives, is unruffled. His firm does not offer building surveying or facilities management but is strong in other sectors, such as M&E surveying, legal work and project planning. Ives is quite prepared to move with the times. "Inevitably our business is going to be a series of specialisms. It will probably bear little resemblance to a traditional QS," he says.
Since it bought itself out of property developer Chesterton a year ago, Cyril Sweett has been a limited company, not a partnership. Says Ives: "The advantages of partnership are fast disappearing. An old fashioned one would stifle talent. We have an open management structure. Every three months I relay our financial performance to staff. I have 60 shareholders. It's easily the best way of keeping staff." Ives may have grasped what it takes to survive as a QS in the 21st century, but many have not. The slow-movers are an endangered species which must evolve or die. Darwin would surely agree.
