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FINGER ON THE PULSE
31 January 2022
Together with The Alliance of Independent Agencies, we run a temperature check on what’s dominating the minds of Creative Industry leaders each quarter. What were the most popular industry views of 2021? Read on to find out…
Reflecting on the Quarterly Pulse Survey results from Q1 2021, it’s clear there was a sense of optimism and in some ways a steely determination to continue to look after agency staff as though a difficult year had not just occurred. Yes, there was still the usual amount of pressure on fees, if not more, and yes, 39% said profitability had decreased significantly in 2020, but the responses told us the value of staff would not be impacted. Just under 70% stated they didn’t reduce salaries in 2020, and over 50% were expecting to offer pay increases.
Moving into Q2
The positivity and optimism was still present. 42% stated they’d seen an increase in new business opportunities, 75% were actively recruiting and for a slight majority, new services were being introduced. In fact, 72% were in a position where they would decline opportunities which weren’t right for their agency. On the whole, the outlook was confident, and 63% stated that profitability had slightly increased.
There were of course challenges for some agencies. A third were experiencing issues with late payments or changes to payment terms. 6% were reducing their fees, and 39% had seen a slight decrease in client spend for the six months previous.
As we moved into Q3, the optimism which was there at the start of the year had waned somewhat as 70% said they have concerns about the impact of the pandemic on the business. Although the majority (63%) wouldn’t be changing fee structures, the feedback indicated that what clients required from their agency was changing: their needs were for more strategic, more digital, and more integrated work.
When we asked about sustained changes to client spend, it’s clear there isn’t a trend in one particular direction. 27% are seeing reduced spend, 29% seeing increased, and the remainder, no real change. A modest 21% had concerns about carrying debtor days, but overall, 60% said performance had increased over the previous quarter.
The Talent Challenge
In this survey we also looked at understanding the challenges members were experiencing when it came to people. 92% believe that talent shortages would continue to be a challenge going into 2022. Members primarily believe this is a result of people leaving the industry, and skills shortages (both 56%). 79% are being more selective about the people they recruit.
How is the industry winning the hearts and minds of the people with the skills they need? At the start of the year, half the respondents were offering pay increases and that trend continues, but 71% are now utilising packages beyond remuneration. That said, 77% envisaged sharing out bonuses this year.
Investment in mental health and wellbeing has increased for 60% and results indicated that sustainability was becoming higher on the agenda list in terms of clients using it as a requirement within their partner selection process (56%). 67% are seeing a greater need to formally adopt more sustainable practices, though it’s acknowledged there’s a commercial impact to doing so.
Finally, the results were fairly even when it came to thinking about reducing office space, in light of teams working more flexibly, in order to increase profits.
WORKING IN PARTNERSHIP
We’re proud to be working in collaboration with The Alliance of Independent Agencies to deliver webinars, masterclass events, thought-leadership and advice on a range of agency ownership topics and more. If you’d like to know more about our partnership, or would like to become a member, contact Rob Quinn.