A new report analysing the design industry has found that the majority of designers surveyed “still work for free on a Friday”.
The Design Business Association’s (DBA) Annual Survey Report has been put together based on data from design consultancies that are members of the DBA. This includes salaries, client fees, income, employee benefits, utilisation and recovery rates.
Utilisation rates are based on the percentage of employees’ time spent on work billed to clients. Recovery rates are based on how a business’s profits, such as from project work for clients, pays for its costs, such as employees’ salaries.
One fifth of employees’ time not paid for by a client
Over a third of the DBA’s 450 member consultancies – 158 in total – provided information for this year’s survey. This spans all sorts of design disciplines, but it was mostly branding and digital consultancies that submitted data.
The survey found that the majority of businesses’ employees are working for free one day a week.
This is down to the average recovery rate being 78%, meaning one fifth of employees’ time is not being billed to a client.
Reasons for extra, unbilled work include clients making last minute changes to a brief, adding additional tasks or asking for many rounds of revisions on finished work, the report reads.
The report offers guidance on how businesses can address this problem. This includes keeping track of employee overtime and setting up an alert system that will flag up when work is exceeding the amount a client has paid for. Clients should then be made aware of the extra tasks, and should be asked to pay for them as they go along.
Confidence up in terms of employment and income
More positively, confidence levels across the industry are up, despite last year’s Brexit vote, which saw an immediate drop in business confidence.
Over half of the studios surveyed – 56% – expect to increase the size of teams by employing more staff over the next 12 months, and two thirds – 67% – expect a rise in income for the business.
A quarter said their business was doing “great and growing”, while only a tenth said they were struggling financially.
Men still hold the senior roles
However, while the male-female split in consultancies is almost equal at 55% men and 45% women, there is still far fewer women getting into higher roles.
More men hold senior and business ownership positions, while women tend to be in supporting roles and stop progressing at mid-level roles.
Flexible working hours and “attractive” maternity pay packages are two solutions offered by the report in order to retain more female staff and encourage them to apply for top jobs.
Big consultancies pay more
Larger consultancies and those based in London were found to pay employees more than smaller ones and those based outside of the capital.
In terms of employee benefits, flexible working, maternity and paternity packages and pension schemes have become more prolific across the industry, though larger consultancies are more likely to give their employees a pay bonus.
Design was also found to be a good industry for pay rises across the board; 81% of employees across all levels can expect a small pay rise – 1-3% – over the next year, though it was found to be slightly more common for junior than senior staff.
The DBA Annual Survey Report 2017 is available in full for DBA members only. The aim of the annual survey is to help members “benchmark” their businesses against others, and also encourage them to improve pay and employee benefits to attract and retain staff, says the DBA.
It was supported by company Pegasus Systems, with analysis completed by Esther Carder, partner at accountancy firm Kingston Smith.
Kingston Smith also audits Design Week’s Top 100 survey, an annual list of the 100 highest-earning, UK-based, independent design consultancies.