WKS report shows falling staff costs

Design consultancies have trimmed staff costs by more than 15 per cent in the past six months in a bid to streamline their operations, but the savings are accompanied by a fall in operating profits and productivity.

According to Willott Kingston Smith’s Marketing Monitor report, income per head fell by 5 per cent, when compared with the previous report in autumn last year, but the sharp reduction in staff costs – from an average £50 566 to £42 808 per head – points towards better long-term health for the sector.

However, operating profit margins of 6.1 per cent are significantly below WKS’s target of 15 per cent, which should be attainable by a ‘well-run design business’.

An average employee’s contribution to consultancy income fell from £78 049 to £74 309, suggesting that cost cuts have been achieved at the expense of productivity.

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