With the Design Business Association warning that employment costs are increasing ahead of fee income again, what should design groups be doing to control costs, and how can they avoid ramping up staff costs?Perhaps the question should really be, ‘How do we drive up deserved fees for the quality of our work?’
Jonathan Ford, Designer and creative partner, Pearlfisher (pictured)
The industry is heading for a difficult time, if employment costs get out of balance with revenue. Quite simply, we have to get better at collaborating, outsourcing and managing freelance and contract staff. Unless you can guarantee income, it’s hard to guarantee employment, so, in a typically volatile sector like ours, we all need to remain as flexible as we can.
Jim Northover, Chairman, Lloyd Northover
Cost savings and efficiencies – always a thorny topic for design groups used to the high life. Do we cut the number of staff parties from 12 per year to 11? Cancel the Design Week subscription, ask everyone to work weekends? Sack the in-house masseuse or have the studio cat put down? Tricky times for the cat then.
Andy Chambers, Managing director/founder, Digit
First, I think more people need to be more aware of the real value of their consultancy, as well as creative output, and be able to sell this service to clients at an appropriate rate, without entering into price wars – it should be about value, not cost. Second, those that do not understand their own businesses will continue to struggle – too many design groups still carry too much fat and too heavy an overhead.
Toby Southgate, Managing partner, Third Eye Design
Ask the following questions: Can fee-earning staff functions be charged out at higher rates? Can productivity be improved? Is there too much down time? Is technology being used efficiently? Could you introduce an element of variable rewards for middle and senior staff while holding down the fixed element? Are there some unprofitable clients that should be invited to pay a better fee or take their business elsewhere? Are you recharging those third party costs that sometimes get lost in the system?
Bob Willott, Editor, Marketing Services Financial Intelligence (pictured)