Economy putting squeeze on agencies

New evidence of the reality of the Britain’s faltering economic recovery emerged today, in a survey which shows that digital and design agencies are increasingly being asked to work for free.

A report by Design Industry Voice shows how small firms have suffered following the financial crisis, during the recession and the long, slow recovery.

Some quotes from the survey:

“Digital and design agencies appear to be running on empty. Clients expect more work for less money to make up for budget cuts. Staff have disengaged; they are overworked, undervalued, and fed up of poor leadership. More of them than ever intend to change job within twelve months (58%), with far reaching consequences in this uncertain economic climate.” Rachel Fairley, lead author of the new research and MD of Fairley & Associates

“For agencies, a high staff turn-over means extra costs. Finding and recruiting new staff, then inducting them and getting them up to speed to take over accounts all adds to costs and eats into margins. In the current jobs market, agencies that advertise are being swamped with applications meaning that short-listing takes far longer than it used to and candidates rarely get feedback and often do not even have their applications acknowledged.” Karina Beasley, MD of Gabriele Skelton

I'm not entirely sure who these agencies are, but they seem to be suffering. My prediction is a move towards smaller, more specialist agencies, more remote working, more agency networks involving collaboration and delegation and more targeted promotion with lower budgets. It could be a good thing for agencies (and clients) to think more about the actual return on marketing activity rather than how big and shiny it once was.