• Source: Online
• Publication date: 19 April 2008
• Author: Fiona Sibley

(originally published 19/03/08)

THE RESULTS of the Design Week Salary Survey enable us to compare average salary data for 2007 with 2006. What do we make of all this? And what does it mean for the year ahead? It’s a complex picture, but there are definite trends, say recruiters. ‘Overall, people should be pretty positive about the market,’ says Paul Wood of Purple. Salaries are holding strong, and it’s still a buoyant, candidatedriven market.

Karina Beesley, managing director of Gabriele Skelton, says, ‘Salaries have performed well and there’s been no obvious dip. On the contrary, they continue to go up with inflation and some consultancies are being clever and adding good incentives, bonus packages and other rewards to the basic salary.’ Outside London, the picture is steady but no more rosy. ‘Salaries are slowly rising, but hardly keeping pace with inflation and public sector increases,’ says Joanne Snell of Gallery Resources in Gloucester.

The economic optimism of last year is already tempered with a marked awareness that tough times may lay ahead. Few recruiters predicted that salaries will rise by more than 5 per cent this year; some said not at all.

How seriously should jobseekers take the whispers of an economic downturn or a recession? After all, says Beesley, ‘Whenever a downward turn is predicted, there will always be an impact on design recruitment.’ Yet confidence is holding fast for the time being, and employers are merely being more circumspect. ‘The market is still buoyant and there is no dramatic sign of it slowing, though consultancies are keeping an eye on the horizon,’ says Nathan Myatt, managing director of Workstation.

Despite the US credit crunch – which has caused a slight drop in recruitment activity by some of the large creative networks with US and financial services clients – some warn that it’s dangerous to talk of a looming UK recession. ‘It depends how you see it – anyone aged 35 or over will think any slowdown is a walk in the park compared to the early 1990s,’ says Stuart Newman of Network. ‘The message we’re getting from our clients is, what’s the problem? There’s not much difference between this year and last year. Things might not be as fast as the past two years, but there is still plenty of work. With UK growth last year of well over 3 per cent, we are confident that even though salaries will level out this year – especially freelance rates, which have grown by more than 100 per cent in the past four years – there is still a strong candidate-driven market. You can talk yourself into a downturn,’ he warns.

If consultancies begin to see their clients facing cuts in budgets, they’ll be wise to maintain their account development teams in the longer term. Consultancies also need to drum up new business rather than push for a bigger slice of cash from existing clients. ‘New business people are in high demand as consultancies are gearing themselves up for tougher economic times over the next 12 months,’ says Kim Crawford of Periscope.

At the beginning of the year, recruitment did appear to be slowing slightly. Claire Vidler of Blue Tree Recruitment says that although the number of vacancies registered in 2008 has already increased on 2007, consultancies have been slower this January to recruit personnel. ‘They are interviewing – however, at the same time they are reviewing their existing personnel resources in more depth to ensure they are recruiting [the number of people] they really need,’ she says.

On the other hand, Paul Cowen of With Us claims that start-ups benefit when the economy slows down. ‘Whenever spending [on design] is cut, salary levels stagnate,’ he says. ‘However, new startups also flourish. These often work with smaller budgets, and subsequently replace salary-level with kudos. That said, successful independents continue to offer higher-level salaries.’

Freelance vs permanent?
Freelance remains a major – and controversial – segment of the design labour market. The increasing volume of seniors choosing to freelance has left a gap in the supply of permanent candidates, and with rates often more attractive than salaries, it’s an increasingly popular choice. Wood notes a bigger increase in the number of professional freelances in the past year. ‘Good people are aware that their skills are at a premium and the more business-savvy will charge accordingly,’ he says. However, the rocketing pay rates of recent years may be about to stabilise, says Newman. ‘We believe that freelance rates will bottom out during 2008.’

Money is not the only deciding factor. ‘If the economy does take a downturn (and it is a big ‘if’ – it’s still not a foregone conclusion), then consultancies may well reduce the often-large number of freelances they’re using,’ says Beesley. This is because freelances are more expensive than permanent staff when a consultancy uses them long-term. Equally, freelance staff may elect to return to the stability of a permanent position, even if it means a lower pay rate. (See also freelance salary survey, DW 27 September 2007)

Pending legislative measures may also threaten the freelance gravy train. This spring, the Agency Workers Bill is being reviewed by Parliament. This bill could have a negative impact on the creative labour market, as it looks to give freelances rights equal, in certain areas, to those of their permanent counterparts.

‘One of the undoubted strengths of the UK economy is the flexibility we enjoy in the labour market,’ explains Stefan Ciecierski, European managing director of Aquent. ‘We acknowledge there is a big difference between creatives using flexible working to their own benefit, and low-paid manual labour. This bill doesn’t recognise the difference, and in attempting to help manual workers we could damage our vital creative industries.’

Digital market
The digital sector is one area where soaring demand for labour has pushed staff into freelance work to reap large pay rewards. But, says Workstation’s Myatt, ‘The digital market can’t sustain the increase in freelance rates. In some cases freelances are earning double that of their permanent counterparts, driven by simple supply and demand. January saw a temporary stall in the freelance digital market, as consultancies looked to reduce costs by resolving their talent shortages by other means.’ So the freelance bubble could well burst in 2008, which would see staff moving back into permanent roles. Recruiters predict that digital freelance rates will peak in the first half of this year, and then probably decline towards the end of the year.

Skills shortages
With several traditional graphics consultancies moving towards digital media, the message is simple. ‘Print creatives should be actively encouraged to gain digital experience and awareness wherever possible,’ says Paula Carrahar of Major Players.

There is still a glut of junior designers, for whom the message is to diversify.

The high demand for consumer branding and packaging talent continues on both a creative and consultative level. Those skilled in large-scale corporate brand creation and implementation (strategic, global projects rather than small identity briefs) face a buoyant demand for their talent.

‘Across the board, the biggest demand is for middleweight to senior people, regardless of discipline – there are far more permanent roles for these than there are people available,’ says Beesley. ‘This is partly because at this level, so many are able to go freelance and are now reluctant to return to permanent roles.’

WHAT THE FIGURES SHOW
On the whole, salaries performed well in 2007, and there has been no obvious dip or surge. Rates for outside London show more consistent growth than in the capital where they fluctuate more wildly, in response to changing supply and demand.

For the main design roles, UK-wide rates for senior designers increased by a satisfactory 3 per cent, yet rates for junior designers in London remained static. Pay rates for middleweight designers have levelled off, dipping slightly in London, yet this follows a rise in 2006 so it’s perhaps not unexpected.

Middleweight designers have been in demand, and there has been a rise in freelance activity at this level. Consultants also report a healthy growth in demand for skilled artworkers, with pay rates not far behind those of designers.

It is more difficult to interpret the results at the upper end of the salary scale, as this area shows the greatest discrepancy between individual consultancies and roles. In London, the year-on-year percentage increase for creative director roles has leapt by a staggering 22 per cent, yet many consultants quoted broad scales for this job alone, with London estimates ranging from £35 000 up to £90 000, with £70 000-plus a commonly quoted figure.

The same can be said of managing directors, with estimates varying widely from £70 000 to £115 000, and so our survey shows that their average pay has whizzed up by 45 per cent, although we should bear in mind the variations.

Overall, the picture for ‘suits’ is less clear to read, with rises and falls across the board. Senior account manager and new business director roles stayed the most static, while there’s a marked fall in rates for account executives.

It seems that, last year, working as an account manager outside London paid dividends, while the respective rate in the capital dropped by 8 per cent.

The figures show a smoother salary progression on the management side, with rates curving gently upwards through the skill levels. On the creative side, the jump from senior designer to creative director records a vast increase in remuneration – £32 000 – which perhaps indicates a tough career leap.

This year’s survey cannot show percentage increases for digital roles, as we have introduced a more accurate range of job titles to the poll. However, there are several comments on labour market activity in this sector in the main article.

HOW YOU CAN HELP YOURSELF AND YOUR COMPANY TO WIN
Finding seriously talented people affects everyone – even the top 20 consultancies where everyone wants to work. Today our industry needs great consultancies and creative brains that share the same goals if they are to rise to the challenges of an increasingly complicated brand and media landscape. Rod Petrie offers some career development pointers:

You are the brand
In a service business, you are the brand and you must embody the brand values of your company. It’s a simple practice to implement, so check out your own vision and mission statements, core values, tone-of-voice and personality.

Winning
Winners set realistic goals as their targets and have a can-do attitude. They create good habits and are not afraid to ask for help to improve on their personal best. They are prepared to put in the hard work and dedication – they don’t expect to win overnight.

Leadership
One key leadership attribute is the ability to spot and develop talent. There are three choices: employ winners from outside, which can be costly with no guarantee; find potential winners from within and make them into winners – this can take time and investment, but is very rewarding; do nothing and watch your company drop a division and go bust.

Communication
Understanding how people like to receive information will help you to communicate more effectively. You might both be communicating in the same language, but we all process information differently. Discovering people’s learning strategies – whether they pick up on things or think things through – is a vital part of an employee’s armoury.

Teamwork
If trust, respect and collaboration are the predominant emotions in a team, the resulting energy becomes expansive, encouraging creativity and open communication. Your individual performance will also improve – try it.

Be the best
If you want to talk more confidently at internal meetings, try mirroring the person with the best presentation skills in the consultancy. You don’t have to give up your identity. Just observe and practise and you’ll get better.

Work is play
As children we weren’t frightened of asking questions; we were curious, didn’t understand fear, were more creative, and learned through play. Encourage people to be themselves, to have fun and to take risks, and you will unleash their creativity.

Rod Petrie is a business coach with more than 30 years in the design industry

Benefits
Because of this imbalance between supply and demand, candidates remain the driving force in the market, and as salaries are not predicted to rise, consultancies are now electing to offer many more soft benefits in a bid to both attract and retain employees (see box, above). ‘Candidates are deciding on who to join based on improved benefit packages rather than just salaries,’ says Snell of Gallery Resources. Increased holiday and maternity/paternity leave, health insurance, pensions and training are all joining the basic remuneration offer, and recruiters expect to see more of this. ‘Many consultancies are starting to take on board the importance of the employer brand to attract and retain the best people,’ says Workstation’s Myatt.

Staying put
The dearth of good middleweight designers that has been seen in sectors like packaging is blamed on a lack of training and investment in junior roles, and the industry has paid handsomely by experiencing a skills shortage, which employers have had to solve by the expensive employment of freelances. The upshot is that more consultancies are improving their efforts to retain and develop staff – it’s cheaper in the long run. Career progression is therefore improving for those who stay put. ‘As consultancies grow, they are becoming more structured and starting to offer sound career paths for designers and account handlers alike,’ says Periscope’s Crawford.

That doesn’t make pay rises necessarily any easier to secure, yet Wood recommends presenting your case and proving why you think you’ve earned it. ‘It is always easier as an employer to make a more informed decision when it’s there in black and white.’ However, he warns against jumping ship without thinking it through. ‘If you don’t get that pay rise, it doesn’t mean that by going somewhere else that will pay a little bit extra, you will be both happier and able to progress your career in any way.’

THE SOFT TOUCH – EXTRA BENEFITS
Pension, death in service and season ticket loans, paid overtime, healthcare, pension, cash/car allowance, performance-related bonus structure, good holiday allowance, training and development programme, working from home, mobile phone, laptop, increased maternity/paternity leave, gym membership, breakfast, fruit, duvet days, flexible working hours, fun, social culture.

WHAT WE DID
To get a fair perspective on the state of salaries in design, we sent a detailed questionnaire to design consultancies featured in our most recent Top 100 and Creative Survey and to specialist recruitment agencies both in London and in the rest of the UK. Our results are based on responses we received in February from recruitment agencies, which deal daily with staff across all disciplines and positions, both in-house and at design groups, in London and the rest of the country. The response from designers was limited, but was used as a check and comparison. Given the highly specialised nature of the design industry, the salaries given can only be used as a guide, as they will vary widely according to the profile of the job and candidate.