April 30, 2026

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The Workforce Squeeze: A Profitability Problem in Disguise

Louisiana’s engineering industry is facing a workforce challenge that extends beyond hiring, it is a business issue. Today’s profitability issues are directly impacting workforce development, operational efficiency, and long-term sustainability.

Demand for engineering services has rarely been stronger. Infrastructure investment, industrial growth, and public-sector programs continue to drive a steady pipeline of work. Yet, despite increased demand, many firms are not seeing improved profitability. In some cases, margins have remained flat or even declined.

At the same time, competing industries such as technology, construction, and energy are expanding margins and increasing compensation. These industries can offer higher salaries, larger bonuses, and more flexibility, pulling talent away from engineering at every level. The fact is, graduates are choosing alternative paths and experienced professionals are being recruited into higher-paying sectors, leaving engineering firms competing in shallow pool.

The Problem

Engineering firms operate within a business model shaped by external constraints. Revenue is tied to project-based work, often governed by public procurement practices that limit flexibility. Here are some of the compensation issues firms are facing:

• Fixed compensation structures that do not adjust to rising labor costs
• Fee pressure where price is introduced too early
• Increasing project complexity without proportional fees
• Contractual risk provisions that strain financial performance

In this environment, firms are being asked to do more while earning less. The inability to adjust compensation in line with market conditions makes it difficult to attract and retain talent, reinforcing the workforce shortage.

The Solution

At the state level, ACECL is building our case to support why public owners need to modernize fee structures, including advocating for adjustments to outdated fee curves that no longer reflect today’s labor market, project complexity, or risk environment. These adjustments are critical to ensuring that engineering services are compensated in a way that allows firms to remain competitive with other industries.

Additionally, ACECL continues to push for greater use of negotiated lump sum contracting. When properly negotiated after selection, lump sum agreements provide predictability for owners while allowing firms the flexibility to manage resources efficiently and protect margins. The key distinction is negotiation after qualifications-based selection, not price-driven procurement at the front end.

That principle ties directly to the organization’s continued and aggressive enforcement of Qualifications-Based Selection (QBS). Protecting QBS is essential to preventing the commoditization of engineering services. When price is introduced too early, it erodes value, compresses fees, and ultimately undermines both project outcomes and firm sustainability. By ensuring that firms are selected based on qualifications first and fees are negotiated fairly, QBS remains the foundation for a healthy, competitive marketplace.

The workforce crisis is not just about "the talent pipeline," it’s about the sustainability of the engineering business model. If firms cannot achieve reasonable profitability, they cannot reinvest in their people, compete for talent, or deliver the level of service that Louisiana’s infrastructure demands.

After the legislative session ends, ACECL and its respective committees will be prioritizing the efforts outlined above. Again, I encourage you to engage in our committees and share your thoughts as we develop our plan of action to enhance profitability for the business of engineering.  

The Board of Governors will hold their next board meeting on May 15th, 2026.

We are currently in the process of updating our records to ensure our membership database remains accurate and up to date. If you have any questions please contact Courtney at chutchinson@acecl.org 

Our Transportation Committee will be meeting Friday, May 22 from 10:00am to 11:30am. A calendar invite will be emailed to all committee members with a Teams link. 

An agenda will be provided in advance of the meeting, but we will be discussing general topics like legislation impacting LADOTD, OLHC and the transportation environment as a whole. Additionally, this meeting will help us prepare and discuss topics to be presented at our next LADOTD COG meeting that will be scheduled for early June.

Below you will see an invitation from Secretary Ledet and Director Chaisson inviting all ACECL members to attend Transforming Transportation Day at the Capitol. As you will see, this is an all-day event that will showcase the transformation and reform work DOTD and OLHC have undertaken over the last year, to enhance the efficiency and effectiveness of transportation project delivery in the state.

Regaining the trust and confidence of the legislature is the first step in the overall effort to increase the state's investment in transportation infrastructure. I highly encourage you to join me at the Capitol May 12 to engage with legislators and share your insight with them. 

CLICK HERE TO RSVP!

In 1984 Rick Pearson and John Dickson founded BAR Environmental Inc., formerly known as Dickson Pearson Associates. Since 1984, we have built a well-respected reputation within the Water and Wastewater Industry across the Southeast. We have formed and maintained long-term relationships with manufacturers, consulting engineers, plant managers and operators. Our goal is to provide our clients with quality products and services. We plan to continue to grow our client base and expand our geographical service territories in the future.
 
Matt Watson
MWatson@bar-enviro.com
205-527-2708
P O Box 2682, Baton Rouge, LA 70821
www.bar-enviro.com

The ACEC Business Insurance Trust (BIT) oversees a program that provides business and professional liability insurance coverage for participating ACEC member firms. The program offers policyholders ACEC-exclusive tailored coverage along with broad policy terms and conditions.

Program coverage includes automobile liability and physical damage; workers' compensation; and the "Spectrum" package policy affording protection for buildings, business personal property, money and securities, business liability, equipment breakdown, drones, cyber security, computers and media. Catastrophe liability protection is available through umbrella coverage.

The business insurance plan underwriter is The Hartford. The plan administrator is Greyling, a division of EPIC.

Representative Contacts:

Lee Ann Wheeler (leeann.wheeler@greyling.com)
Jeff Connelly (jeff.connelly@greyling.com)

MARK YOUR CALENDAR!

It's time to showcase Louisiana's top engineering achievements at ACEC of Louisiana's Engineering Excellence Awards (EEA) Gala on November 18, 2026, to be held at the Baton Rouge Marriott. Submission details and eligibility requirements will be announced in May. 

So put your thinking cap on and get ready to compete with the best of the best! 

MAY 2026

3-5           ACEC Annual Convention & Legislative Summit, Washington, D.C.

8              ACECL Human Resources Forum (Virtual)

12-13      Emerging Leaders Institute - Session 1

15           ACECL Board of Governors Meeting

21           New Orleans Chapter Luncheon

22           Transportation Committee Meeting

28           Lake Charles Chapter Breakfast

28           Lafayette Chapter Luncheon (tentative)

ACEC Business Insurance Trust

ACEC Life/Health Insurance Trust

Advanced Drainage Systems, Inc.

BAR Environmental, Inc.

BFM Corporation, LLC

Breazeale, Sachse & Wilson, LLP

Brown & Brown of Louisiana

Cadence Insurance

CxA Services, Inc.

EJ

ELOS Environmental, LLC

Environmental Technical Sales, Inc.

Faulk & Winkler

Foley & Judell, LLP

Galloway Johnson Tompkins Burr & Smith, LLP

Gulf South Technology Solutions

Hannis T. Bourgeois, LLP

Insperity

Keogh, Cox & Wilson

Quality Sitework Materials, Inc.

Tensar Corporation

Turner Insurance & Financial Services