Digital agencies 'expected to pitch for free'

New evidence of the reality of the Britain’s stumbling recovery has emerged, in a survey showing that digital and design agencies are increasingly being asked to work free of charge.

The Design Industry Voices survey, run by Fairley & Associates, Gabriele Skelton and On Pointe Marketing, shows how small agencies have suffered following the financial crisis, during the recession and in the slow recovery.

The survey, of almost 500 agency staff, confirms that a squeeze is being applied to such smaller players, in both private and public sectors, as budget cuts have bitten just at a time when confidence remains shaky.

As a result, more than eight out of ten respondents said that clients expect “more work for less money” – with almost as many saying that client budgets are firmly on a downward trajectory.

Even more threatening to agencies’ bottom lines, seven out of ten of the agency staff believe clients expect more work to be fed into pitches without any cost for the pitch whatsoever.

Rachel Fairley of Fairley & Associates, says that, with clients expecting ‘more for less’ to cover their own budget cutbacks, digital and design agencies appear to be “running on empty.”

Stef Brown, managing director of On-Pointe Marketing condemned what she characterised as a prejudice unique to the digital and design marketplace.

“Producing creative work for free during pitches means agencies are giving away their most valuable commodity: their intellectual property. I can't think of any other professional services business where this is tolerated, or even considered an option," she said.

The findings suggest such a ‘give-away’ is already having a corrosive effect: more than half of the respondents said agencies were taking on fewer staff, even asking unpaid interns to fill any resulting talent gap.

For freelancers, this falling out of favour being experienced by permanent job candidates may actually bode well, however.

In fact, more than half of the agency staff (55%) said agencies have started using more freelance workers as a direct result of the pressures, whether they stem from the economy or from their clients.

However a freelance account manager who anonymously featured in the survey sounded less than optimistic: “Fear of a double dip recession makes employers less inclined to recruit…plus many employment contracts are one sided (guess in which direction?).

“Maturity and experience seems less valued now. Perhaps because you can pay inexperienced staff much lower rates,” he said. “Everyone is having to work harder, and deliver more, to maintain historic margins.”

Still, the overall recruitment trends anticipated by the survey authors appear to favour freelancers, as opposed to their full-time counterparts. According to the findings, almost six out of ten digital or design agency staff members intend to leave their job within the next 12 months for a better opportunity elsewhere.

 

 

11th January 2012

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