Bright Lights, Big City: Do You Need To Be In A City To Succeed?
In an attempt to help creative agencies overcome many of today’s economic challenges, I and other experts from the agency world are looking at ways you can maximize your margins. Last week, we explored the topic of creativity versus profitability. This week we’re discussing ways that agencies and employees get the best from one another.
The Chancellor of the Exchequer recently told a packed Commons that the UK’s creative industries are in the “midst of a new golden age.” Employment in the creative sector is growing three times more quickly than any other in the UK ̶ with London (15%) and the South East (28%) accounting for much of the sector’s total workforce.
Whilst there are pockets of creative businesses up and down the country, there is a call for greater re-balancing of the creative economy. Milton Keynes, Edinburgh, Bristol and Brighton and Hove are all home to clusters of agencies as demand for creative services continues to grow in other regions. NESTA, the innovation charity, is calling on the government to support even more initiatives for nurturing new creative clusters in other locations around the UK.
And with the commercial demands of high rents, rates and salaries putting pressure on margins, some London agencies are now looking at where they are based, and whether they really need to be there.
What if you were out of town?
Many agencies insist to me that they need to be in London to attract the best creative or technical talent. They tell me they’ve had to accept much higher office and operating costs and the salary expectations that come with such a location.
But some agencies are re-evaluating their need to be in London or other major (and costly) city locations. I’ve seen a growing trend of agencies succeeding outside of London and there is a definite shift happening.
I work with an agency based in Scotland that has a fantastic portfolio of clients and award-winning creatives. It’s a thriving agency and their location hasn’t prevented them from building their business. In fact they’ve more than doubled in size in less than 2 years. Their resourcing costs are lower than competitors based in larger, more expensive regions. But salaries are not the only factor: greater availability of premises in cities outside of the South East allows agencies to expand more freely as their business grows.
The rise of the regional agency is evident when you look at recent CIPR award winners. A Brighton-based agency won the category of Outstanding Midsized Public Relations Consultancy, beating both M&C Saatchi (London) and Harvard (London). Other finalists in this category were agencies based in Scotland and Manchester. Tellingly, the winners also reported a 24% increase in turnover and 38% increase in profits over the last year.
What if employee expectations were different?
Employees’ expectations are typically based on how and where they work. But some London agencies are telling me that they no longer attract and retain the best talent simply by offering big salaries. They are now looking at ways to invest in the well-being and satisfaction of creative resources. In many cases, this means building a better working culture.
Smaller, regional agencies can’t compete on salaries – in fact, they no longer feel they need to. They already have a great culture and offer a better work/life balance. Flexible and mobile working policies help them retain talented creatives. And because their reputations attract new talent directly, they drastically cut recruitment costs.
We take a much closer look at the top techniques agencies are using to attract and retain creative resources here.
What if clients don’t mind where you are?
Many of the agencies I work with that are based outside of the big cities are becoming more profitable, more quickly. This is due to lower costs, the emergence of local creative communities and their happy, loyal talent. As a result, they are attracting clients who look for more consistency within the creative team and are therefore more open to using agencies based outside of London.
No matter which location you choose as a base for your agency, you can achieve harmony between client and employee expectations, operating costs and profitability. But only if you have total clarity.
Join me and other experts from the agency world during the coming weeks as we ask the question What if? We’ll be sharing articles, insights, e-guides and opinions for download on how, with total clarity, you can maximise your margins.