Formalise training in the design and digital industry.

The design and digital industry is an exciting place to work.  It is a world where people change jobs often and experience working in different creative environments on new projects and with new clients all the time. It is an industry that is used to churn and where freelancers are embraced. This year’s Design Industry Voices Report shows that it is also an industry where salaries are growing and bonuses are being paid.

The challenge is providing people with the skills to lead the industry. The report shows that while formal training through a degree or a course is the best way into the design and digital parts of the industry, there is no comparable route for those in account management or strategy.

In account management and strategy, agency staff value learning by working their way up from a junior position. However, agencies are poor at supporting professional development or growth, and respondents do not consider fellowships and internships that useful. The industry needs to find a formal, structured way to provide the skills needed for successful account management and strategy.

Agencies are affected by the commercial realities of their clients in tough economic times. The client demands for more work for less money, the increased free creative pitching and the reduction of budgets reflect a tough, new reality.

It is staff in account management and strategy that must understand those pressures. They must ensure that clients realise the value of the work they commission and be able to demonstrate its impact.

Account managers have to carefully manage the relationships, juggle the budgets and not only win pitches with new clients, but also to continually win existing clients through day-to-day delivery. Good strategists must learn the art of finding an insight and ensuring that the creative is effective.

This will, I think, also help agencies continue to be profitable and successful in the very different world they and their clients now inhabit.

For the full report please download here

Clients expect more for less finds 2013 Design Industry Voices survey.

The headlines

  1. Clients are putting pressure on agencies to do more for less. The number of free creative pitches for existing clients is perceived to be rising. The longer pitch process continues to be an issue for the industry.
  2. Over half (53.7%)of respondents intend to change job and about the same proportion (58.6%) perceive that agencies are employing fewer permanent staff. These proportions are a little lower than those found in 2012.
  3. Almost two thirds (63.4%) of respondents have received a pay rise in the last two years. Pay rises in the last year have outstripped inflation. A quarter of respondents (27.7%) have received a bonus in the last year.
  4. Working your way up from a junior position is considered the best form of training in the industry. Design and digital are the areas where a relevant degree or course is most highly rated as a form of training. Two fifths of respondents (40.5%) still consider that agencies perform badly in terms of supporting professional development.

For the full report please download here

Digital and design agencies face second year of talent exodus in 2012.

First published by Left Foot Forward on 3 January 2012.

A sense of gloom hangs over small business owners as they make their turkey sandwiches this week.  With the Euro crisis dragging on, the Chancellor’s latest credit easing initiatives still to be felt, and official unemployment figures at 2.64 million, the highest since 1994, many will be reaching for another glass of sherry just to drown out the recent memory of their struggles in 2011 and the forecasts they’ve read for 2012.

Economists at global banking giant Standard Chartered say the UK economy is likely to be in recession going into 2012, eventually recovering in the second half of the year. It feels like the tough times for small businesses have already lasted years, but with public sector clients experiencing cuts that will accelerate from next April, and Standard Chartered forecasting 1.5 per cent growth in 2013, the belt tightening is here to stay.

Many are simply adapting to the new economic reality. I’ve been surveying people working in digital and design agencies about the economic outlook for three years now, and it is striking the way that the longest UK recession in history has changed the culture of an industry based on pitching for business, piece meal contracts and unpaid interns.

Agency leaders are facing a second year of talent exodus. In the next twelve months 58% of respondents are intending to change employer. Churn has far reaching consequences that SMEs can ill afford in this uncertain economy. It impacts on reputation, profitability, quality of work, client and talent retention and acquisition.

Recruiter Karina Beasley of Gabriele Skelton says: “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.

Too many are relying on freelancers and unpaid interns. Over half (58%) of respondents told us their agency is employing less permanent staff, 43% that they are using more unpaid interns and 55% that they are using more freelancers. Is it any wonder that 32% say that the quality of work has declined?

Stef Brown, MD of On Pointe Marketing, says: “clients are increasingly nervous that the ‘A’ team pitched, but an unstable ‘B’ team are delivering. And feeling like you aren’t on the ‘A’ team is demotivating, giving employees another reason to consider leaving. Not only this, but 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.”

Not only do respondents say clients are expecting more work in pitches for free (71%) but that once you’ve won the account more work for less money (85%). One agency owner told us “Yes, budgets are killing us, everyone wants something for nothing and without good reason and if you don’t agree they all go elsewhere.” One designer said there is “too much competition. Little opportunity.”

The movement of people between agencies can make or break reputation through word of mouth. This is increasingly true as a growing number of respondents are using the social web to talk about their professional experiences (30.4% in 2011, up from 19% in 2009).

Clients asking for safer work (54% of respondents) will do nothing to enhance an agency’s (or the client’s own) reputation as being at the forefront of innovation. Safer solutions may not achieve the client’s business objectives. One design director pointed out: “It’s increasingly being dumbed down and made more obvious and commercial as the clients are frightened to try anything new. They tend to patronize the audience and don’t assume that the consumer can pick up on edgy subtleties.

The good news is agency leaders are still wearing their rose-tinted glasses, perceiving their company’s performance higher than their employees. This may be helpful if they are to successfully lead their agency through the economic downturn and back to prosperity, but they should be aware that their employees do not share their point of view. Staff perceive agency performance is getting worse: there is too much poor leadership, that doesn’t value ideas and opinions, and fails to reward people for going the extra mile when there are excessively high workloads relative to staffing levels.

Agencies appear to be running on empty, with staff engagement at an all-time low. Lets hope that the entrepreneurial spirit possessed by so many small business leaders can be reinvigorated at the heart of the agency, so that we may yet find a way to stop the exodus and find a path to growth.

Download the full report

Design Industry Voices survey 2012 sees fluid workforce trends continuing.

The headlines

1. More staff than ever intend to change job within a year (59%). Agencies are employing fewer permanent staff, more freelancers and more interns.

2. The widest perceived delivery gap is for ‘has a management team that demonstrates strong leadership skills’ (-53.1%). Owners have a rosier view of agency performance than their staff.
(The delivery gap is the difference between the perceived importance compared to perception of how well an agency currently performs in relation to an agency attribute.)

3. More staff than ever write their personal thoughts about work on social networking sites (34.6%).

4. Clients expect more work for less money to make up for budget cuts. Agencies are expected to do more work for free to win pitches and the pitch process is taking longer. Clients want ‘safer’ work.

5. Only 9% of respondents say clients demand accessible designs and fewer than half (45.7%) agree that they understand how to design in a way that improves accessibility for people with disabilities.

Download the full report and press release

A crisis of leadership in digital and design agencies.

There is an ever increasing instability within agency workforces. There are fewer permanent staff, more freelancers and interns. A record number of people are intending to change job within a year (59%). This year almost half of respondents (49%) have been with their agency less than two years, so it appears that unhappy employees are following through on their intention to change job.

A substantial change in those responsible for the day-to-day client relationships and client satisfaction may have an impact on the agency’s ability to service and farm existing clients, as well as to seize new business opportunities as the market begins to pick up. The resulting churn means agencies are spending precious budgets on recruitment fees and investment in getting people up to speed on their way of working and building staff knowledge of the agency’s clients.

This makes clients nervous that the ‘A’ team pitched but an unstable or more junior ‘B’ team are delivering. And feeling like you aren’t on the ‘A’ team is demotivating, giving employees another reason to consider leaving.

The movement of people between agencies can make or break reputation through word of mouth. This is increasingly true as a growing number of respondents are using social media to talk about their professional experiences (34.6%, up from 18.8% in 2009).

Respondents perceive a crisis of leadership. For the first time the perceived delivery gap is widest for ‘has a management team that demonstrates strong leadership skills’ (-53.1%). Part of the issue is that owners have a rosier view of agency performance than their staff. Staff complain of inappropriate staffing levels, a lack of strong sense of teamwork throughout the organisation, their ideas and opinions not being valued, and they are not being rewarded for going the extra mile.

For the full report please download here

Failing the blue pound.

10 million disabled people live in the UK with a combined annual spending power in excess of £80 billion – the Blue Pound. Nearly three-quarters (73%) are heads of households and 48% are principal shoppers.*

Business opportunities are being lost to secure the Blue Pound because clients and agencies are failing to understand and address their needs, resulting in a ‘walk away pound’.

A survey of the opinions and shopping habits of disabled customers by Business Disability Forum and Disability Rights UK people found that 83% of disabled people had ‘walked away’ from making a purchase, unable or unwilling to do so – ‘the Walk Away Pound’. What emerged was a picture of informed consumers who will reward good customer service and punish providers who don’t make any effort to meet their needs. Amongst the cited factors that discouraged disabled consumers from spending were poorly designed products, inaccessible premises, and poor or inappropriate communications including inaccessible websites and printed information.

Only 9% of respondents agree that clients ask for all designs to be accessible to people with disabilities. Fewer than a quarter (21.9%) agree that clients ask for website designs to be accessible to people with disabilities. Fewer than half (45.7%) agree that they understand how to design in a way that improves accessibility for people with disabilities.

The European Commission proposes that all public sector organisations will be required to ensure that disabled users of their websites have the same access to certain content and services as other internet users by the end of 2015.** This offers market opportunity for designers who understand accessibility.

Sources:
* Business Disability Forum website. Business Disability Forum and the Royal Association for Disability and Rehabilitation (now Disability Rights UK) Survey 2006.
** www.theregister.co.uk/2012/12/05/web_access/

Sorting the wheat from the chaff.

Clients expect more work for less money to make up for budget cuts. Agencies are expected to do more work for free to win pitches and the pitch process is taking longer. This is having an impact on the quality of work and client servicing. More work is being produced for less budget, by a changing workforce that is less experienced in the agency’s specific approach and less knowledgeable about the clients.

“I wish that the design industry would get together regarding the issue of free pitching. The amount of work that is expected is shocking. It can put small firms out of the running and out of business”, explained one strategist.

A designer agency-owner added: “We are a profession and like any profession we should have a strong professional body to support the industry, lobby on behalf of the industry. The design agency world is guilty of continually under valuing itself and as such clients, including the public sector, are asking for more and more but for less and less fee. It’s a tough industry that in my view needs a strong professional body to stand up for the SMEs in particular. To my mind no such body currently exists.”

Clients asking for ‘safer’ work will do nothing to enhance an agency’s reputation as being at the forefront of innovation (or their own), and safer solutions may not achieve the client’s business objectives.

“This recession is sorting the wheat from the chaff. Which is a good thing. We’re still suffering the client backlash from over-selling to them pre-recession”, noted an account manager.

Download the full report.

Rose tinted challenges in the digital and design industry.

First published by Design Week on 3 January 2012.

UK digital and design agencies are facing a second year of talent exodus. Last year 56% of respondents to our Design Industry Voices survey were intending to leave their agency. These were not idle threats; in our 2011 survey 35% had been in their job less than a year. In the next twelve months 58% are intending to change employer. It is time for the industry to take this seriously.

The impact of churn

Churn has far reaching consequences that SMEs can ill afford in this uncertain economy. It impacts on reputation, profitability, quality of work, client and talent retention and acquisition.

Recruitment demands senior management time, fees, and further investment to train new employees on the agency’s approach and knowledge of its clients’ businesses. Over half (58%) of respondents told us their agency is employing less permanent staff, 43% that they are using more unpaid interns and 55% that they are using more freelancers. Is it any wonder that 32% say that the quality of work has declined?

Clients get nervous when the ‘A’ team pitches but an unstable ‘B’ team delivers. And feeling that you aren’t on the ‘A’ team is demotivating, giving employees another reason to consider leaving.

This uncertainty can encourage clients to put their account out to pitch again. Add to this that respondents say clients are expecting more work in pitches for free (71%) and once you’ve won the account more work for less money (85%). One agency owner told us “Yes, budgets are killing us, everyone wants something for nothing and without good reason and if you don’t agree they all go elsewhere.” There is “too much competition. Little opportunity” said one designer.

The movement of people between agencies can make or break reputation through word of mouth. This is increasingly true as a growing number of respondents are using the social web to talk about their professional experiences (30.4% in 2011, up from 19% in 2009).

Clients asking for safer work (54% of respondents) will do nothing to enhance an agency’s (or the client’s own) reputation as being at the forefront of innovation.
An account manager explained “There are a lot of clients demanding that something is just done the way they want despite expert opinion to the contrary… It seems lost that the clients are in fact employing experts for the skills they have and subjective feelings on the value of the work can dominate the management of project and dilute the end result.”

Safer solutions may not achieve the client’s business objectives. One design director pointed out: “It’s increasingly being dumbed down and made more obvious and commercial as the clients are frightened to try anything new. They tend to patronize the audience and don’t assume that the consumer can pick up on edgy subtleties.

A rose-tinted challenge

Agency leaders are wearing rose-tinted glasses. Owners are consistently more likely to rate their agency’s performance higher than their employees. This may be helpful if they are to successfully lead their agency through the economic downturn and back to prosperity, but they should be aware that their employees do not share their perceptions of agency performance.

Respondents rate ‘has management team that demonstrates strong leadership skills’ as the agency attribute with the second highest delivery gap: -53% in 2011, and -48% in 2010. (The delivery gap is the difference between the perceived importance of an agency attribute and the perception of how well the respondent’s agency actually performs against that attribute.)

Perceived agency performance is getting worse: there is too much poor leadership, that doesn’t value ideas and opinions, and fails to reward people for going the extra mile when there are excessively high workloads relative to staffing levels. Fewer staff than ever expect their agency to be a brand that is compatible with their own values.

Agencies appear to be running on empty, with staff engagement at an all time low.
What are digital and design agency leaders going to do about this?

A return to middle management

Elizabeth is an agency entrepreneur. An account director, she steers her agency and client team, always delivering innovative, creative, business results focused work. She is a middle manager: no responsibility for running the agency, total responsibility for her client’s satisfaction. Elizabeth is tenacious, she invests budgets as if the money were her own, worries about billability and profitability of the agency, is confident advising business leaders, and is a natural ‘farmer’ and business developer. A wordsmith, she always pushes studio to innovate creatively and knows when to nurture and when to begin again. Elizabeth knows the value of ideas and she doesn’t like giving them away for free.

If we can put that entrepreneurial spirit possessed by so many agency leaders and managers at the heart of the business we may yet find a way to stop the exodus.

It is time for a return to middle management. Middle managers have daily contact with clients, lead the agency team, manage the budgets and produce work that can make an agency’s reputation. They are the future leaders.

With middle management as the agency’s driving force, it’s easer to focus on profitability and engagement.

Teach managers how to increase billability and usage rates, reduce investment from overspend on pitches and projects. Improve their negotiation skills. Stop over-delivering in ways that the client doesn’t notice and instead make one-off investments in additional work that is groundbreaking, setting a new tone.

Give managers responsibility for the resourcing budget on their project so that they can staff up appropriately and allocate manageable workloads. Stop promising to clients more than your people can deliver during a normal working day for the budget. Take a percentage of the project profitability and allocate it to managers to use as a team bonus for outstanding work and for seeing the project through, helping increase quality and reduce churn.

When I see Elizabeth, or any of the other great senior manager or director level account managers, designers and strategists at work, it makes me wonder why we have executive teams. How are they helping if they are failing to lead, don’t listen to ideas and opinions, fail to reward people for going the extra mile, or ensure that workloads are acceptable? Here’s one way to save money – a slimmed down executive team and an empowered middle management.

Whatever you think of my ideas, this is an industry wide problem and it is time for fresh thinking and action.

Download the full report.

 

Design Industry Voices 2011 survey finds more employees than ever intend to change job within twelve months.

The headlines

  1. More staff than ever intend to change job (58.3%) within twelve months.
  2. Clients expect more work for less money to make up for budget cuts.
  3. Agencies are expected to do more work for free to win pitches and the pitch process is taking longer.
  4. Clients want ‘safer’ work.
  5. Agencies are employing fewer permanent staff, more freelancers and more interns.
  6. The perceived delivery gap has continued to widen across all agency attributes. (The delivery gap is the difference between the perceived importance compared to perception of how well an agency currently performs in relation to an agency attribute.)
  7. Owners have a rosier view of agency performance than their employees.

Download the full report and press release

Design Industry Voices survey 2010 perceived agency performance worse than last year.

The headlines

  1. Over half of respondents (55.7%) intend to change job within a year, compared to 38.4% last year.
  2. Staff are more discriminating about what they expect from their agency than they were in 2009.
  3. The perceived delivery gap (the difference between the perceived importance compared to perception of how well an agency currently performs in relation to an agency attribute) has widened over the last year.
  4. Age has an impact on what is considered important and how performance is perceived in an agency.
  5. Owners and executive team disagree that their agency ‘has good pay and benefits package’.

Download the full report and press release