The Design Week Top 100 survey revealed a bullish year for design, with consultancies reporting turnover up 9 per cent. But, why are design groups still failing to manage their growth efficiently, with staff costs rising ahead of fee-income yet again?
Price pressure and scarcity of good staff have an impact. But well-run businesses generate good productivity and margins. What makes them stand apart is treating the business as a business, articulating their offer, having clear lines of responsibility and leaders who plan strategically.
Mandy Merron, Partner, Willott Kingston Smith
Staff costs rise when a company expands, then level out, but rarely fall as low as the initial rate. Attracting staff to a growing consultancy is expensive – difficult to control but part of managing success. The trick is not to overpay for lesser talent – good people are rare, but they do exist.
David Dalziel, Creative director, Dalziel and Pow
Note to managers: please predict accurately all client wins in advance, and ensure that their distribution through the year is even, so growth is linear. Also, ensure you recruit talented people when the workload demands it, and lay them off when there’s spare capacity. Note to Willott Kingston Smith: it’s not a perfect world.
Jim Prior, Managing partner, The Partners
The design industry is disproportionately susceptible to downturn. And when we emerge from recession we’re still too tentative about charging appropriately. At the same time, people have stuck with us in hard times and want to be rewarded when growth returns. Also, the available pool of talent has shrunk in the meantime, creating increasing pressure on staff costs.
Rune Gustafson, Chief executive officer, Interbrand