As I pen this letter during the second week of May, it is increasingly clear that we are staring straight into a period of economic growth and rising inflation. First quarter GDP increased by 6.4%, while unemployment fell to near 6% and continues to decrease. Growth and inflation both potentially have a dramatic impact on our business, our client’s businesses, and our communities -- for years and decades to come.
The challenges we face today are much different than those we were anticipating just one year ago. We see inflationary pressure on the cost of operations in many areas. Starting with associates’ wages through to office supplies, and all the way to pass-through building rental expenses, our costs are going up.
The market for professional services near a state of turmoil. Workloads are increasing. For each month of 2021, we see a significant increase in our contracted backlog. At the same time, it is more challenging to find professional talent to service the workload. The wages we pay new associates are rising meaningfully. Accompanying that fact is we must also systematically raise the compensation of our long-time associates.
Our costs are going up, and this will lead to higher fees. We are working extremely hard to maintain the quality of our deliverables and our client experience. One of the primary ways in which we advance our quality and client experience initiatives is through innovation. We must do more and do better with less labor input. The only way to do that is to increase efficiency through innovation.
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Accordingly, I am pleased to announce the addition of Nick Evans to WGI as our new Chief Innovation Officer. Nick’s directive from me and the board of directors is to help us implement our technology stack in a way that allows us to truly leverage opportunities for digital transformation, and sustainable increases in efficiency that allow us to meet the challenges of today’s market realities head-on.
In reading the tea leaves about the economy’s general direction and to where capital investment will be attracted, we are also increasing our emphasis on Sustainability, Resiliency, and Adaptation (SRA). Last month, renowned thought leader, speaker, and strategist Gary Lawrence joined WGI as our new Director of Sustainable and Resilient Strategies. Based in New York, Gary will integrate SRA tactics into all client-facing divisions and help our clients tackle these challenges in a manner enhancing stakeholder value.
Indeed, change is the only constant in life. The market is demanding change in how our world is envisioned, designed, and experienced. At WGI, we are committed to meeting this challenge head-on with sustainable, resilient, and adaptable technology-based solutions. Together, our clients and our associates are making the world a better place.
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