New research from the Design Business Association shows that nearly a quarter of the work carried out by design consultancies is done for free.
The DBA Annual Survey report – which is based on a survey of DBA member consultancies – shows that 22% of work never gets paid for.
The DBA says: “Many in the industry fondly call this overservicing – which has a rather more positive tone about it than the reality.
Working for free on a Friday
“Essentially, it’s working for clients for free on a Friday.”
The findings are taken from the full survey, which is being released to DBA members.
The DBA says: “There are, of course, many reasons why a consultancy may not be fully recovering the time it spends on a client account, and these will be addressed within the report.
Consultancies must be in control
“However, a consultancy needs to make sure that, for each client, it fully understands the reasons for their recovery rate and then seeks to do something about those that are in their control.”
Despite giving so much away for free, most design businesses surveyed for the research are enjoying growth or at least remaining solid.
The survey shows that 80% of businesses are growing or remaining stable, while just over a quarter expect to grow by more than 10% next year.
Conditions remain tough
The report also shows that salary increases are generally being awarded at a rate of 1-3% – except for those consultancies who are doing particularly well, where 4-6% rises are being awarded.
The DBA says that despite this growth “the reality is, however, that conditions still remain tough”.
It adds: “The increased expectations among clients of what they can buy for the same or reduced budget continues to put consultancies under pressure.
Keep up with clients’ demands
“The complexity and fast-paced change of the digital landscape also continues to bring its own pressures, in particular the constant need to evolve and innovate to keep up with clients’ demands.”
DBA services director Adam Fennelow says: “Increases in both income and staff numbers are encouraging, and if design consultancies can keep pay rises to a sensible level, this bodes well for the future.
“The area requiring improvement is the continued overservicing of clients by design consultancies. Effective methods of monitoring this and reacting to it are essential for consultancies to increase their margins and become more profitable.”
The full report is available to DBA members at www.dba.org.uk.