Making predictions in the current market is verging on the impossible. Commentators across the board have varying views on how it is going to pan out and how long the recovery is going to take. One thing that everyone agrees on is that 2009 is going to be a tough year. Workstation has been recruiting for the creative, production, strategic and digital markets since 1989 and we expect this to be one of the toughest periods.
Before you decide to grab your soup bowl remember that however bad it sounds in the press, business is still happening, work is still being done and companies still need good people, so there are opportunities out there. The difference is you'll need to work harder to find a job and will have to be tuned in to what employers and clients are looking for. The days of the big egos and chips on the shoulder have come to an end. Now, more than ever, is the time to really shine - either within your present role or in the art of job-hunting.
2008 started well for most people in the creative, communication and digital sectors apart from those connected to financial and property based markets - for them the pinch started in 2007. There were ripples in April coupled with a slower summer than usual but in comparison to other markets, the industry fared well through most of 2008. It was not until the last quarter that the market started to falter, with the collapse of Lehman Brothers on 15th September 2008. By the middle of October 2008 the world had changed. The speed of the change that took place was phenomenal and created massive uncertainty, as well as catching many companies completely unaware. Almost simultaneously a number of the largest agencies changed their strategies from rapid growth to restructuring their business.
Like other markets it's been the biggest players who have been hit quickest with their extremely high overheads and major debts from expansion. The medium sized agencies fared well as did many smaller ones through this period due to their flexibility and management of overheads. Agencies with a strong overseas client base in places like Russia, Dubai, India, Far East and Africa, as well as others, faired particularly well. The core problem of all this, and continuing to be so, is the availability of money and uncertainty in the market. We saw a very poor November due to the inability of companies to be able to see what was going to happen after the Christmas period and a calm sense of panic. December started to soften as it seemed the financial markets melt down had been avoided.
As predicted in January 2008, generally across the markets salaries stayed stable through most of 2008 with the exception of strategic/business people and the digital markets. Digital freelance rates topped them all increasing at a ridiculous rate for the first three quarters to such a degree that it ultimately was becoming unsustainable. People being paid £250 a day in 2007 were looking for £350 per day in 2008. However, this came to an end in the last quarter of 2008. Freelancers were looking to at least maintain their rates but some started to consider lower rates and /or permanent opportunities as the level of freelance activity declined. Across the board we started to see a softening of salaries expectations driven by candidates' worries for work prior to the Christmas period rather than clients expectations. By the end of the year however, clients were also starting to pick up on this by make offers at the lower end of the salary range rather than the upper end.
With the start of the New Year the larger agencies, for at least the first quarter of 2009, will continue to restructure their businesses. Medium and small groups will start the process to a greater extent during this period. So the first quarter of 2009 is going to be a difficult time for the job hunter. This is going to be compounded by major household names having financial problems as banks reduce and stop lending. This initial period of restructuring will stabilise with organisations looking to retain their core people and prepare their business for the harder times ahead and subsequent increase in market activity. Medium sized businesses will fare better through this period with greater flexibility and lower overheads.
The markets will be slow throughout 2009 and the speed of their return will still depend on the availability of money, and the confidence and courage of the business to seize market opportunities. It will be through this period that you will see the next generation of leading agencies and companies by the way they handle the current market conditions. One thing can be sure is that this is a good time for small to medium sized agencies to propel themselves to greater heights. The larger organisations canopies stopped many opportunities from filtering down, however this is about to change. For those with a clear vision and strategy there will be many opportunities.
During the Dot Com crash one of the present leading digital agencies grew during this difficult period. A number of companies, after the restructuring period, will see this as an opportunity to build outstanding teams. The question is which companies are going to be the meerkats and which will be the tigers. As in those that wait to see what everyone else is doing from the people actively seeking out the market.
In our January 2008 Salary Survey we predicted a slower market and change in salaries activity. However trying to predict 2009 is not going to be as simple but nothing ventured... so here goes.
In the traditional creative, design and communication markets over the past decade salaries did not grow as dramatically as they did in the digital markets. There were exceptions with strategic, client and business development orientated roles but as a general rule, salaries did not increase that much. Many creative permanent salaries have not increased in line with inflation over past decade. As a result we do not see massive changes in these areas though there is likely to be a decline. There will be extensive downward pressure on salaries through 2009 and 2010 across all markets. What we do see in the coming year is an increase in the number of freelancers looking to take on contract and permanent employment, which has already started to happen. Freelance rates will decline over the year by up to 10%, as there are more candidates available. In the last 6 months of 2009 we expect to see an increase in the use of freelancers and fixed term contracts, however rates will not revert back up to their 2007 levels. The first quarter leading into the second quarter will be a very slow period for permanent recruitment.
Though many companies will fare well through this trying period there will be redundancies across all sectors. Companies looking to take people on will place a greater emphasis on fixed term contracts and trial periods. Freelancers will be used for short term projects from days to a couple of weeks. Permanent salaries over the next three to six months will decline initially driven by candidates' expectations and need for a permanent income. This will filter through to the market as a whole as more experienced people reduce their salary expectations and in return place downward pressure on less experienced candidates salaries. This will stabilize in the third to last quarter of 2009. Over this period we expect to see declines of up to 20% for senior people and 10% for less experienced candidates. Having said this there are always particular sectors and skill sets that will buck the trend.
The digital markets will see a big change through 2009, particularly in the rates that freelancers receive. We see an initial impact from the last quarter of 2008 continuing through the first quarter of 2009. Freelance rates will be particularly hit in the first half of 2009. This will be driven by the number of people entering the market needing temporary roles and the overall demand for freelancers declining. A classic case of supply and demand will kick in. By the second half of year we see everything stabilising in the digital markets and starting to increase in activity. This will be driven by companies looking to utilize the web as a revenue generating vehicle and as an essential part of their business strategy. Freelance bookings will increase as companies and agencies look to add skills sets to their organisation on a temporary basis rather than considering permanent roles. Short term contracts will be more common throughout 2009 to manage workloads and keep overheads down.
All of this is a generalisation so it's important to keep in mind that it is always difficult to find great people and even though there may be a decline in activity, things have not stopped, it is just going to be slower. To get through this period you'll need to make sure your skills are up-to-date and you expand your knowledge base as much as possible. Companies look for people with more experience across a number of areas at a lower rate during difficult times. So make sure that you do everything you can to be one of those great people.
As I said earlier don't go running for your soup bowl. There are always opportunities out there. If there is a decline of 30% in the market it still leaves 70% of the business. During 2007 and into 2008 it was much easier to get work and in some areas almost too easy. There will be a readjustment but if you work hard at keeping your skills and experience up-to-date there will be opportunities out there. Remember nothing ever stays the same, even if you want it to. The markets will change. One thing that is for sure, you will need to be realistic of your salary expectations and willing to spend time on your CV and/or portfolio if you want to find work. Our experience tells us that being yourself and honest, and having the right attitude to work is what really counts. Finding a job is a skill in its own right and even though you might be the best in the market if you can't get what you do across then it will hold you back. This is where we can help.
Finally, though there is a lot of bad news around its important not to lose focus or perspective. Business is still happening, people are still being placed in permanent jobs, freelancers are still getting bookings and opportunities are still coming up. Things will be alright in the end.