At the end of 2022 we anticipated an interesting and challenging year ahead, and 2023 has proved to be just that. The Russian invasion of Ukraine continued, and in October an attack by Hamas on Israel escalated the Israeli-Palestinian conflict. We have, at least, settled on just one serving Prime Minister this year. Worries about a deep recession have diminished but the UK economy is experiencing renewed signs of stress, so how has this affected hiring for businesses and corporate communications agencies?
It’s certainly been a fascinating year. In many ways it has been a year of two halves, a cautious beginning with less volume of roles coming our way (down 25% in volume compared to 2022), felt particularly in the first six months, and then there was a change in momentum in the second half of the year with more roles and more candidates coming our way, eager to move jobs.
Recruitment mirrors the economy; if companies are feeling cautious about the economic backdrop, they ‘wait and see’ before making any hiring decisions. This year, we have seen some in-house corporate comms teams across industry sectors tighten their belts, trim their communications budgets and make roles redundant.
Reduced, cut or paused in-house communication budgets impact the comms agencies who service them, and this puts a squeeze on their profit margins. We also heard comms agency bosses talk about their clients making slow decisions on new business alongside having to manage increased running costs. And we saw agencies starting to feel the impact of the inflationary pay rises made at the end of 2022 where base salaries increased by an average of 10% according to our Salary Guide data.
In turn, according to PR Week, many agencies increased their prices, trying to maintain their healthy profit margins. Those feeling the greatest pinch in the slowdown made roles redundant.
We have observed these world and industry events throughout 2023 with interest and we’ve taken a little time to review them in context of what we do.
Traditionally, we take on senior search mandates across most industry sectors (from real estate, private equity, payment companies, asset managers, manufacturers, infrastructure, FMCG to green energy companies – you name, we can fill it). We source brilliant Directors of Corporate Affairs for these businesses and then fill out their teams with talent, all through exclusive searches. Our revenue is usually 70% in-house placements and agency makes up the rest (mainly searches for CEOs, Partners and Directors, and a few ad-hoc Associate Directors and Account Directors). We focus on permanent roles and usually fill a handful of long-term contracts. We also sign up some candidates exclusively and work hard on their behalf to find them a career-making role.
This year, 70% of our revenue came from placing corporate comms professionals with our agency clients. Normally the lion’s share comes from in-house. I can’t remember the last time agencies dominated this way, probably several years ago. As fewer senior in-house mandates were coming our way, we focused our energies on our agency clients, looking at what they needed. Many vacancies had been open for months on end, as they were hiring cautiously, wanting to get it right. As it’s a candidate-led market, we used our extensive network to find the gems.
As we frequently discuss in our newsletter, in-house is 4 times more attractive to corporate comms professionals when looking for a new role. This means that filling roles for agencies takes a lot more work as the pool of people open to considering another agency role is small. We need to be incredibly proactive. We filled CEO roles, MDs, Partners, Directors and lots of Associate Director and some Account Director roles. We prioritised roles which are given to us exclusively.
The in-house searches we filled were across different industry sectors, notably real estate and asset management including long-term contracts and newly formed Director of Comms roles.
One thing we have noted this year is the number of redundancies that have happened across the industry, including in-house comms teams.
For hiring, a cautious economy has a knock-on effect; we have seen some major corporates only replace leavers where necessary and we have seen fewer newly created senior level roles overall. Alongside this we have seen lots of senior comms professionals’ roles being made redundant, often as global corporates restructure their businesses and perhaps withdraw from the UK, disposing of their UK comms team in the process. Directors of Corporate Affairs have been asked to cut more and more costs and after trimming everything else, the only thing left to cut is their headcount.
We have also seen lots of redundancies within the large international agencies (owned by big media groups or private equity backed) attempting to retain their healthy profit margins. Some of these well-known agencies have had a couple of stellar years, but this year they haven’t met their inflated targets. After strong revenue growth in the post COVID bounce-back years, high revenue targets were set in 2023 and not met. This has resulted in some larger agencies undertaking two or three rounds of redundancies. It’s mostly been senior professionals (MDs, Directors) who perhaps found themselves struggling to demonstrate return on investment compared to their peers.
We noted that multiple rounds of redundancies have had an extraordinary impact on employees’ morale and the overall business. These job cuts affect everyone and delivery levels (Account Directors to Associate Directors) were getting in touch with us wanting to leave as they had ‘lost trust in the senior leadership team’ and ‘there is no one left to do the work as gaps were never replaced’.
What has been interesting to observe is that no sooner had these agencies made redundancies, many of them immediately started to hire when gaps in teams were left as delivery levels began to hand in their notice. We also noticed a handful of Account Directors who had handed in their notice without a role to go to. They know that they will secure another role and have the confidence to do so. All of this has resulted in more candidates coming our way in the second half of the year, from agencies, happy to move to another agency.
High performing Account Directors, especially those not working (with lots of time to interview) were getting multiple job offers (some up to three). Mainly from agencies although occasionally there would be an in-house offer in the mix. It goes to show how this delivery level remains highly sought after.
We track salary uplifts. The candidates we supported with job moves this year, on average, received an uplift of 16% in their base pay when they moved jobs. Not bad going. It was the same in 2022 which is interesting as there was lots of movement in 2022 post COVID and some candidates were receiving inflated increases. Pre-COVID it was a stable 13% uplift so perhaps this 16% is the new pay-uplift normal. It just goes to show that considering a new role, at the right time, could be more lucrative than holding on for that promised pay rise, which we discovered in our Salary Survey, was an average of 10% across all respondents in 2022. However, we don’t think that companies will be quite as generous this year as inflation has come down and from what PR Week was reporting, revenue growth has been marginal.
At the end of the year, we always like to review our newsletter readership to see what you have found the most interesting and valuable content. Perhaps in the midst of the dark winter months it’s no surprise that sabbaticals are front of mind for our hard-working audience! Here are our best-read blogs of 2023:
We’ll be launching the 2024 Salary Survey in January and we strongly encourage you to take part, as always! While we’re finalising the questions, we’d love to hear from you if there’s a particular topic you’d like us to cover. Drop me an email at email@example.com if you’d like to make a suggestion.
2023 has unfolded as a year of dynamic shifts and challenges, both globally and within corporate communications and hiring. World events and economic uncertainties have undoubtedly influenced the cautious approach of businesses and corporate communications agencies impacting hiring trends and budget constraints. As we reflect on the year behind us and as we contemplate the year ahead, we remain committed to facilitating impactful connections and contributing valuable insights to our network.
All that remains is for me to thank you for supporting The Works Search in 2023, for your personal recommendations, and for your contributions to our knowledge base which we will continue to share in our Thought Leaders Connected newsletter throughout 2024.
Very best wishes for the festive holidays with your family and friends!
MD, The Works Search
For a free download of our full Annual Salary Guide 2023, click here.
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The Works Search: a search consultancy specialising in PR and corporate communications. We have unrivalled matching abilities and are known for finding the top 5% performers in the industry - the ones who deliver and make your reputation great. For more advice or market insights, do get in touch with us on 0207 903 9291 or email: firstname.lastname@example.org.