The annual conference of the American Cultural Resources Association (ACRA) was held a few days ago in Seattle, Washington. ACRA is the trade association for the heritage compliance sector in the United States. While the ACRA program is filled with valuable business topics, the real benefit of attending is gained from talking with company owners and senior employees in the hallways and at the many social events. People often say things about their businesses that they probably shouldn’t and one always comes away from the meeting with a wealth of information about competitors and the compliance sector as a whole.
My back hallway sample, probably representative although not statistical, indicated that the compliance sector in the United States is strong. Most companies reported that 2012 has been a good year for business, with more than a few companies reporting that this year will be their strongest year since the recession of 2008/2009–some reporting their best year ever. Strength is primarily coming from activity in the mining, electrical transmission, alternative energy, and oil/gas client sectors. This pattern of strong performance appears to be geographically uniform, although there are some areas of the country doing better than others due to geographical factors (e.g. locations of oil fields and mineral resources). There are, however, a few gaps in the compliance sector’s overall strong business performance. A few firms reported that they are still having difficult times and have yet to really rebound from the recession four years ago. What is interesting about this is that a few of these firms are well known firms that have been market-share leaders in the past.
Last week in the Federal Register, the United States Small Business Administration increased 37 small business size standards for 34 industries in Sector 54, Professional, Technical, and Scientific Services. Under the North American Industry Classification System (NAICS), used by Canada, Mexico, and the United States, the industry code for Environmental Consulting Services (541620) was increased from $7 to $14 million. The majority of cultural resource consulting firms in North America are in the Environmental Consulting Services category. This change was effective yesterday, 12 March 2012.
Within the United States, many, perhaps the majority, of cultural resource compliance service contracts issued by the federal government are set aside for small businesses. This new, larger, small business size category will change the competitive landscape by allowing firms with annual revenue up to $14 million to compete directly with truly small firms for small business contracts. The American Cultural Resources Association (ACRA), the trade organization for the heritage compliance sector, classifies small firms as those with annual revenue below $400,000, medium firms as those with annual revenue between $400,000 and $1.5 million, and large firms as those having annual revenue above $1.5 million. This new ruling will not provide any protection for truly small heritage firms, those in ACRA’s small and medium categories, and create head-to-head market competition for all firms below the $14 million threshold. For companies who target the federal contracting sector, there is now an advantage to being larger and this may prompt a new round of heritage firm mergers and acquisitions in North America.
A very thoughtful comment was made about HBJ post Employment: Multidisiplinary firms vs. heritage-only firms (18 Feb 2012):
“Large multi-service firms tend hire and terminate for each project because their offices rarely have enough local work to retain technicians. They tend to have centralized full time labs and production centers that do not have positions for techs for after fieldwork tasks. Whereas many hertiage-only company like CRA use full-time technicians in a variety of tasks. The ability to live near a company’s office(s) to come in and do post-fieldwork tasks is the key to full time work. In addition the ability to move techs and other staff between offices reduce the need for temporary project specific techs except for the largest field projects. Plus in any given year we receive enough cold call applicants from technicians with good resumes that simply working the resume file drawer eliminates the need for an ad for most projects.”Steve Creasman and Kay Simpson
A high turnover of technicians in multi-service firms could easily explain why there are more job advertisements from these types of companies than from heritage-only firms. To explore this more, I also took a look at senior positions (e.g. principle investigators, senior archaeologists, office/regional managers) for the same 2011 data set. Of course titles are not standardized across the sector and names can be misleading, but a full 46% of the job advertisements reviewed asked for 10-25 years of experience and 55% asked for 5-9 years of experience (a slight overlap with some asking for 8-12 years). The job descriptions and requirements (years of experience, permits, etc.) firmly place these jobs in the top levels of employment regardless of title. None of these jobs mentioned temporary employment but that does not mean it is not. However, asking for 20 years of experience for a temporary job would be rare but not unheard of (or it should be in my personal opinion). Out of 79 job postings, 61 of them mentioned their employers (some of the job postings have been removed making it impossible to see who was the employer). In this data set the breakdown is even more lopsided in favor of multi-service firms
Heritage-only firms may look for their top-level workers through other means than advertisement such as internal promotion or through professional networks. A lack of lower level positions in multi-service firms may make it hard for them to recruit internally. What these data do show is that the majority of job advertisements for archaeologists at all career levels was dominated by multi-service firms in 2011. Does this mean they get the majority of business? That can not be determined from these numbers but employment may indicate strong growth prospects.