There has been a dramatic change in freelance rates of pay, with the market being more depressed this year than last. Some roles have seen rates increase, but for most there has been a decline.
This is the general consensus of recruitment agencies specialising in design. But while this comes as no surprise given the state of the economic climate over the past couple of years, the outlook is not all doom and gloom. Opportunities are there, the greatest demand for freelances being in fulfilling roles where skills or experience are lacking, especially in the digital sector.
‘A log-jam is occurring,’ says Mick Ward at recruitment agency Worth. ‘Clients of consultancies are pushing projects and budgets forward to 2010 instead of fulfilling planned executions in 2009,’ he explains. This could mean we’re on the cusp of an upturn, where rates could increase rapidly as demand grows.
Looking at the 2009 figures, it is apparent that the golden age of freelance pay, when freelances in certain sectors used to earn significantly higher pay than their peers in permanent positions, has been and gone. As clients budgets have been cut, the number of freelances taken on has also been reduced.
Sarah Ellis-Jones of Xchangeteam says, ‘Freelance pay has decreased due to the number of unemployed freelances – bolstered by those [staffers] who have been made redundant and are looking for work – who are happy to be very competitive on rates.’
Rates of pay
Pay rates for junior positions have decreased slightly, but still remain quite healthy across the board. The concern is for jobs in senior creative roles, which have dropped significantly. Comparing Design Week’s last freelance survey in 2007 with this year’s trawl, creative directors, for example, used to receive £288 a day, but now it is only £261. This reflects the change in freelance rates over the past 12 months, with a decrease of 17.25 per cent cited by recruitment agencies. Redundancies have affected the market and are one of the reasons why there are a growing number of freelances. Senior rates of pay have deflated because more experienced designers have turned to freelance after losing their jobs.
On a more positive note, recruitment agencies predict that rates of pay will increase by 8.75 per cent over the next 12 months. The initial dip at the beginning of 2009 is showing signs of a reversal. ‘Additional workloads and projects culminating from increased pitch and win activity are predominantly driving growth,’ says Macpeople director Sue Pilgrim.
Experience and skill shortages
Demand for skills is still there in the digital and branding arenas, though recruitment agencies observe a lack of demand for all other disciplines. At the height of the recession, from September 2008 to April this year, consultancies seemed to be ‘doing without the luxury of freelances’, says Emma Thompson, a freelance specialist at Leeds recruitment agency The Book. Experienced freelances, and those with expertise in disciplines where there is a shortage, have been able to ride out the adverse economic conditions.
The survey suggests that good freelance account managers are in short supply outside London, creating a demand that has boosted the daily rate of pay in the regions. On average, account managers can be paid £178 a day, compared to 2007 when they only received £148. ‘In London, there is a higher volume of account managers, who seem to be a rarity in the regions,’ says Mike Bennett, managing director at E3 Media in Bristol. ‘They need to be able to pitch and relate to the client. Therefore, the more skilled are in greater demand.’
As ever, the paucity of digital candidates creates it own supply-and-demand scenario.
‘Freelances need to focus on the skills and experience levels most in demand,’ says Ian Coulson at recruitment agency Mustard. This is echoed by Paula Peterman, senior creative consultant at Periscope, who says, ‘The digital market is still busy but there is a lack of talent around.’
Reasons for recruiting
‘The freelance recruitment market is becoming more buoyant as it rebounds quicker than the one for permanent positions,’ says Ross Taylor at Purple. ‘We see this situation as the catalyst needed to remind employers that recruiting freelances is a necessary part of a successful business model in our industry.’
Requirements for hiring freelances still remain, with additional workloads and the need for specialist skills. However, there has been a noticeable increase in the number of maternity cover freelance contracts, too. Karina Beasley, at Gabrielle Skelton, explains, ‘There can often be a baby boom during a recession, and our view is that this one is no exception – a number of our clients are reporting an increase in the number of employees due to go on maternity leave in the coming months.’
So why do people go freelance? At the moment it appears there is no choice if you’re out of work. For new graduates coming out of university and seeking permanent positions, networking, reliability and knowing the job is key to success. Smaller businesses use freelances as a way of topping up their team without the overhead of an increased salary.
At present, ‘who you know and what you know’ seems to be the only way to be successful in the freelance market. It is skills-based and relies heavily on experienced senior positions. Creatives are advised to network at social events and be more flexible on hours and rates.
Design consultancies appear to be cutting out the recruitment agencies altogether, using their own network of people they know in the business. It became clear in our research that fewer recruitment agencies now offer freelance services. National agencies continue to submit freelance rates of pay for this survey, but their regional counterparts are opting out because of a lack of investment by their clients. The revenue from the freelance market is low, as ‘bookings tend to be more last minute and for shorter periods of time’, explains Pilgrim. Thompson says, ‘We have noticed that our local competitors do not have the financial backing, and so cannot cope with the expense of the freelance market.’
Looking ahead, recruitment agencies anticipate an upturn for the market. Design groups are starting to approach agencies aboutpotential hirings, but ‘only time will tell whether this scenario is borne out and comes to fruition’, concludes Ellis-Jones.
WHAT WE DID
Results are based on detailed responses from recruitment agencies that specialise in design and deal with staff across all disciplines and positions, both in-house and at consultancies. An insiders’ view from designers was used to check and compare.
DEMAND FOR SKILLS BY DISCIPLINE
- Corporate ID
CHANGES IN FREELANCE RATES PAST 12 MONTHS
NEXT 12 MONTHS
Up 8.75% (forecast)
TOP REASONS FOR RECRUITING FREELANCES
1 Additional projects
2 Unforeseen workload
3 Specialist skills
4 Staff holiday cover
5 Maternity/paternity leave
6 Work backlog
What do you think of the freelance market, and where does the demand lie?
Will Mundow Chief financial officer
The market should be reasonable, as groups aren’t committing to full-time staff. If they see an upturn they’ll go the freelance route in the short term until they feel comfortable the worst is over. Pay seems to be holding up for digital freelances, especially for more senior positions. Demand lies at the junior and work experience level for us.
Real Time Consultancy
Good freelances will always be in demand, but they have to be more realistic regarding charge-out rates in the current climate. The consultancies I work with span print, graphics, design and digital, and they seem to want more senior people with specific skill sets such as planning, coding and so on.
Oakwood Media Group
There are fewer opportunities around as we are keeping things on a much tighter rein than last year, because of the economic pressures. If we do hire, we are paying about 15 per cent less than last year. It is still going to be very tight for at least another six months. Maybe things will pick up in the spring.
People are holding back on recruitment so we’ve seen demand for good freelance designers rise. They’re filling the gaps for consultancies that are offering freelances longer-term contracts of up to six months, to see if things pick up and they can commit extra resources and take on permanent roles again. Longer freelance contracts also mean consultancies are negotiating hard on rates. We’ve also seen people leave consultancies to go freelance, originally due to the decent rates and market demand, but over the past six months there have been an awful lot of freelances about.
I suspect being a freelance designer looking for a full-time role is tough now. While some groups are recruiting, there is a surplus of senior talent at the moment. We’ve been approached by a number of freelances we’ve previously worked with, actively looking for full-time positions. We generally need support from senior and highly experienced freelances during busy periods – a trusted and safe pair of hands. We rarely, if ever, take on freelance accounts staff – our clients demand continuity and implicit trust in the client team.
Executive creative director
The Brand Union
Good freelances will always get work, as will good design consultancies that care about quality. To survive in this industry, freelances must be of the highest standard and have a love and passion for doing great work. We don’t just need another pair of hands, but creative thinkers – ‘radiators’ – who can work as part of the team and add value to the creative process.
Few consultancies are hiring at the moment,so freelance working is a good way to move. Demand lies across the board, but especially for anyone who can generate business with clients. Idea generators are tops. Looking forward, things will start to improve gradually from now on.