It’s About People: The role of HR systems for interior design firms

This article was originally published in Canadian Interiors.

As interior design and architectural firms grow, the demands on their human resources (HR) systems expand exponentially. Effective HR practices not only support sustainable business growth but also create an environment that fosters creativity and collaboration—key elements in design industries. Yet many firms tend to prioritize excellence in design and project output over internal workforce management. This oversight can lead to significant challenges as firms scale up. By implementing structured HR systems early on, design firms can streamline operations and maintain their creative focus while mitigating workforce challenges.

The Need for Tailored HR Systems in Design Firms

Design firms are hubs of innovation where form and function must work in harmony. Like a thoughtfully designed interior, a well-structured HR system allows for smooth operations and a comfortable, energized workplace. However, many firms may not have human resources on the radar until they face high turnover, recruitment difficulties, or workplace dissatisfaction.

According to the 2023 Canadian Architectural Practices Benchmark Report conducted by the Royal Architectural Institute of Canada (RAIC) and Canadian Architect, HR will be one of the greatest challenges to the profession in the next five years. These issues can hamper morale and productivity for creative businesses that rely on successful collaboration. The key is adopting proactive HR strategies that facilitate an innovative and functional workplace atmosphere.

Gen Z employees entering the workforce bring a new challenge to the industry. Unlike older generations who honed social skills in an in-office setting, many Gen Z workers were hired during the pandemic and started their careers working remotely, and many still are. In this context, many lack experience in navigating professional dynamics with colleagues, managers, and clients. This can lead to feelings of isolation and potentially impede collaboration and, by extension, project outcomes.

Practical HR Solutions for Design Firms

Once the essential HR elements are in place—such as a well-defined employee handbook, accurate job descriptions, and a basic performance review system—design firms can expand their HR practices to support new and existing talent. Below are five practical strategies to implement for growing interior design firms.

1. Build a Strong Company Culture

In a creative industry, company culture can be a deciding factor for both recruitment and retention. A positive, engaging workplace culture keeps employees motivated and connected to the firm’s mission.

• Design-Focused Team Building Activities: Incorporate activities that stimulate creativity, such as team visits to design museums, collaborative design workshops, or even escape rooms with design puzzles.

• Recognition: Recognize outstanding design work through awards, public acknowledgments, or even social media shout-outs. Regular recognition keeps morale high, and employees engaged.

• Work-Life Balance: Encourage flexible work hours, remote work options, or even mental health days to help employees manage the demanding nature of design work. This is especially important for younger workers who may feel overwhelmed by the intensity of the industry.

2. Prioritize Performance Management

Effective performance management systems not only ensure that your team is working towards the firm’s goals but also enhance individual employee growth.

• Set Clear, Measurable Goals: Align goals with individual development and project outcomes. For example, track key metrics like project completion times, client satisfaction, and adherence to design standards.

• Conduct Regular Check-ins: Don’t wait for annual reviews to offer feedback. Regular, informal check-ins can help employees stay on track and feel supported.

• Use a Mix of Metrics: Performance in interior design and architecture is both objective and subjective. Use a blend of metrics, from project timelines to creativity in design solutions, to assess employee performance comprehensively.

3. Focus on Recruitment and Retention

Talent is the lifeblood of interior design, and competition is fierce. Holistic recruitment and retention strategies should be a top priority, especially as the industry grapples with maintaining profitability.

• Develop a Structured Interview Process: Include questions addressing design skills, creative problem-solving, and project management. This ensures that new hires not only fit culturally but also meet your firm’s technical demands.

• Create an Onboarding Checklist: A thorough onboarding process integrates new employees quickly and smoothly into the team. This checklist could include mentorship programs or design software training sessions to ensure new hires hit the ground running.

• Implement a Referral Program: Leverage your current employees’ networks to tap into a wider talent pool. Offer incentives for successful referrals, which can help bring in high-quality candidates.

4. Stay Compliant

With your firm’s growth comes the need for more robust compliance measures. Interior design firms must adhere to legal requirements regarding employment, intellectual property, and client confidentiality.

• Regularly Review Employment Contracts: As your firm evolves, ensure employment contracts reflect updated roles, responsibilities, and benefits.

• Classify Employees vs. Contractors: Design firms often use freelancers or contract workers. Make sure the classification between full-time employees and contractors is clear to avoid legal complications.

• Intellectual Property Policies: Establish clear guidelines on ownership of design work, especially for creative roles. Define who retains the rights to design concepts and final products.

 5. Scale Your HR Practices as You Grow

As your firm grows, your HR practices will need to evolve. Whether you choose to hire an in-house HR specialist or work with an external consultant, scaling your HR processes is critical to maintaining smooth operations.

• Hire HR Expertise: Once your firm reaches a certain size, consider bringing in HR professionals to handle the complexities of workforce management. This allows leadership to focus on design work while ensuring the HR systems are sophisticated enough to handle a larger team.

• Regularly Review and Update HR Systems: Keep your HR systems current by conducting regular reviews to ensure they meet your firm’s needs. Gather employee feedback to refine practices, ensuring that your systems are responsive to the evolving workforce.

• Employee Feedback: Create channels for ongoing employee feedback to understand their concerns and proactively improve the employee experience. This could take the form of anonymous surveys or open feedback sessions.

HR systems are often overlooked in interior design and architecture firms, where creativity and project execution tend to take precedence. However, building effective HR practices is critical for scaling and sustaining growth. By prioritizing recruitment, managing performance, fostering a strong culture, staying compliant, and scaling HR systems as needed, design firms can create environments that attract top talent and retain it. In the long run, these HR investments will free up more time for what matters most—designing beautiful, functional spaces.

Op-ed: Future-Proofing Your Firm—The Critical Role of HR in the Architectural Workforce

This article was originally published in Canadian Architect.

Leaders in architecture are driven by design excellence and innovation. However, as an HR expert who has worked closely with Canadian architecture firms for years, I’ve observed how the focus on delivering outstanding projects and passion for design excellence can sometimes overshadow internal workforce considerations. To remain competitive and attract top talent, architecture leaders must adopt strategic HR practices. Embracing innovation within the organization is foundational to building future-proof firms. 

The current landscape: Workforce growing pains

Like many specialized fields in Canada, the architecture industry faces significant workforce challenges.

An Aging Workforce and Skills Gap: One of the most pressing issues is an aging workforce, raising concerns about knowledge transfer and succession planning. This demographic shift is compounded by a widening skills gap, particularly in emerging areas like sustainable design and Building Information Modeling (BIM).

Diversity and Inclusion Challenges: The industry also needs more diversity. Less than 38 per cent of architects in Canada are women, and 11% are visible minorities, highlighting the need for greater inclusivity in the profession. This lack of diversity limits the pool of available talent and hampers creativity and innovation, which are crucial for the industry’s growth.

Work-Life Balance and Mental Health Concerns: The demanding nature of architectural work is taking its toll on professionals. Grueling work hours directly contribute to burnout and mental health issues. This work-life imbalance is not only detrimental to individual well-being but also impacts firm productivity and talent retention.

These statistics paint a clear picture: the industry is facing a talent crunch. Not surprisingly, the 2023 Canadian Architectural Practices Benchmark Report reveals that human resources issues are expected to be among the greatest challenges for the profession in the next five years.

The HR blind spot in architecture firms

Why is HR so often an afterthought in architecture firms? In my experience, it boils down to the nature of the profession. Architecture is known to be a “passion business.” Young visionaries enter the field driven by a love for design, not business operations. While essential for producing outstanding work, the creative focus can lead to neglect of crucial business aspects, including workforce management.

The result? Many shops only seek HR expertise when they’re already in crisis mode — experiencing high turnover, struggling to recruit, or dealing with a nosedive in employee morale and productivity. At this point, addressing these issues becomes a rescue mission that is more complex, time-consuming, and costly than if the right scaffolding had been in place.

HR’s role in tackling these challenges

To truly future-proof architecture firms against evolving workplace challenges, we need to shift from reactive to proactive HR strategies. Here are key areas where HR investment can make a significant impact:

1. Enhance Performance & Productivity: A well-crafted performance management system boosts business performance and staff productivity. It supports job satisfaction and career development while directing employees toward common goals. Employees need appropriate feedback mechanisms to understand how their performance impacts the business’s success.

2. Boost and Motivate Employees: Employee engagement drives performance and retention. Companies with highly engaged employees outperform their peers by 147 per cent in earnings per share. Furthermore, engaged employees see a direct connection between their work and the firm’s success, reducing the impulse to seek opportunities elsewhere. HR can create and maintain this engagement through various initiatives and communication strategies.

3. Reward-Return Strategies: It’s a simple truth that humans repeat rewarded behaviours. This means ensuring market-aligned salaries and benefits, but it goes beyond financial compensation. Non-monetary rewards like authentic recognition, opportunities to contribute to business direction, and clear paths for advancement are equally important.

4. Maintain Compliance and Navigate Change: Professional employment legislation changes frequently. HR can keep your business compliant and implement effective change management processes to ensure employee buy-in during periods of growth or industry shifts.

5. Recruit and Develop Top Talent: New technologies like BIM, virtual reality, and artificial intelligence are key investment areas for Canadian firms. HR can support strategies for tech-savvy talent recruitment, skills development and training for existing employees to ensure long-term retention and innovation.

The business case for early HR investment

Investing in HR early allows you to develop and implement programs that improve the employee experience before problems arise. This proactive approach can prevent high turnover, employee disconnection, and lost productivity.

HR plays a key role in ensuring a positive, rewarding employee experience. And a better employee experience means a better bottom line.

This is particularly crucial for smaller firms experiencing growth. As you scale, having strong HR foundations in place will make expansion smoother and more sustainable. It allows for the development and implementation of programs that will improve the employee experience from the ground up rather than trying to retrofit solutions later.

Practical steps for growing architecture firms

1. Prioritize HR early: Don’t wait for problems to arise. Make HR a priority from the start, even if you’re a smaller firm.

2. Invest in HR expertise: Whether you hire an in-house HR professional or consult with external experts, ensure you have access to specialized knowledge.

3. Develop a comprehensive HR strategy: This should cover all aspects, from recruitment and onboarding to performance management and succession planning.

4. Foster open communication: Create channels for employees to provide feedback and voice concerns before they become significant issues.

5. Regularly review and update HR practices: The workplace is constantly evolving, so make sure your HR strategies evolve with it.

By investing in strategic HR practices, you address current workplace challenges and future-proof your firm for sustainable growth and success. While great design may attract clients, a great workplace culture attracts and retains top talent. Remember, if you build it, they will come.

Small Business Owners Should Spend More Time On These Five Things

If you think your business is too small to need Human Resources processes, think again. As most small business owners will tell you they wear many hats but often put more focus on customers, finances and their particular area of expertise. Good HR process is an area that can get overlooked, but the minute you have employees on the payroll, HR issues will abound.  

A small business owner should make sure they are getting these five things right, in order to attract, develop and retain good employees: 

Hiring: Don’t hire your friends, it is next to impossible to discipline or fire them. The boundaries between business and friendship are often either blurred or create resentment and tension if enforced. We think friends will be more loyal because of the personal connection, but often that is not true. Take the time to hire properly – consider your needs for the role, and the cultural fit within the organization. The more care you take in hiring, the more likely you will find a good employee. 

Onboarding: Most small businesses don’t have a formal ‘onboarding’ process, and it’s a crucial step that is often overlooked. This is an introduction to your company culture, environment, and fellow staff. Taking the time to onboard a new employee will help set them up for success. Be specific about how they fit in with the organization and any performance metrics related to their role.  As with any other important relationship, put in the effort to make them feel welcome.  Introduce them to others.  Take them out for lunch. 

Salaries: It can be challenging to get salary data to pay people properly. Often small businesses pay too much or too little, because they rely on information from their colleagues, or the employees themselves.  Look for independent, external, market data (recruiters often publish annual salary guides) and pay attention to internal equity (how employees are paid vis a vis each other. Note that when an employee believes their pay is not competitive, their loyalty and performance will suffer.  It is difficult to recover from this.

Bonuses: Small/new business owners may often give their employees generous bonuses at year end out of gratitude for a good year, believing it will engender loyalty and motivate team members. However, a ‘thank you’ type bonus that is not attached to a performance metric will not actually impact the business or the employee’s performance if they do not know how to earn that bonus next year. Also, it can give rise to a sense of entitlement.  Employees are happy as long as they get the annual bonus and as long as it is at least as much as last year, but the negative impact of a bad year is devastating to morale and performance. Bonuses are best tied to specific, measurable achievements

Compliance: Some small business owners may think they don’t need formal policies or try to develop them on their own, but not having them – or not meeting appropriate standards – could end up costing you more in the end. While some legislation is designed for larger businesses much of it is applicable to small businesses as well.  These include, for example, accessibility requirements, harassment and violence policies, health & safety training.  Don’t assume your business is too small; no matter your size, you need to meet certain standards and requirements.

Creating good HR policies and practices for your small business need not be expensive or time consuming. But you might be surprised at how much they will pay off in terms of productivity and reduced turnover.