Engineering Consultants Call for Fee Reform as Costs and Responsibilities Surge
KUALA LUMPUR: Malaysia’s engineering consultancy sector is calling for a major review of professional fee structures, arguing that current rates no longer reflect the realities of modern engineering practice despite decades of increasing responsibilities and project complexity.
According to findings from a recent industry survey conducted by The Institution of Engineers Malaysia, many professionals believe consultancy fees should be increased by between 40 and 50 per cent to better align with rising operational costs, regulatory obligations and professional liabilities.
The organisation noted that consultancy fee structures have remained largely stagnant for years, even as engineering projects have become significantly more sophisticated and demanding.
IEM said the existing Scale of Fees framework has not undergone a comprehensive review since the late 1990s, leaving many firms struggling to balance growing client expectations with outdated compensation models.
Industry participants reported that consultants today face substantially higher workloads than in previous decades, driven by stricter compliance requirements, extensive documentation processes, risk management obligations and increasingly complex project specifications.
The survey, conducted from May 15 to May 24 and involving 598 engineering professionals, highlighted widespread concern over the sustainability of current business practices within the consultancy sector.
Among the recommendations was a proposal to restructure payment schedules so that up to 80 per cent of consultancy fees are paid before projects reach the tender stage.
Respondents also suggested reducing retention sums during construction phases to improve cash flow and strengthen financial stability for consulting firms.
A major issue identified in the survey was the continued reliance on lowest-cost selection practices when appointing engineering consultants.
Nearly 89 per cent of respondents indicated that consultants are frequently chosen based primarily on price rather than technical expertise, professional capability or long-term project value.
Many industry players believe such procurement practices risk undermining project quality and may fail to adequately account for technical complexity and associated risks.
More than half of respondents expressed concerns that conventional tendering systems often prioritise the lowest bidder at the expense of broader performance considerations.
The survey also revealed growing worries about service quality, with over 65 per cent of participants warning that prolonged fee stagnation could eventually affect the standard of engineering consultancy services delivered to clients.
Beyond consultancy fees, the findings highlighted concerns over salary levels for entry-level engineers.
According to the survey, starting salaries for many newly graduated engineers remain below RM3,000 per month, despite significant increases in living costs and growing expectations for technical competencies.
More than 80 per cent of firms surveyed reported that staff remuneration is often among the first areas affected when consultancy fees are insufficient.
Meanwhile, over half of respondents said limited financial resources have forced companies to reduce investments in training, professional development and workforce upskilling.
IEM said the findings should serve as a catalyst for broader discussions among policymakers, regulators, industry stakeholders and professional bodies on how to ensure the long-term sustainability and competitiveness of Malaysia’s engineering consultancy sector.
The organisation added that reforms focusing on fair compensation, quality-based procurement and talent development will be critical to maintaining high professional standards and supporting future infrastructure and development needs.
