Our series of articles explore how the media sector can thrive beyond the crisis. We guide you through all vital angles you need to view your business from, namely: talent, business development, pricing pressure, profitability, management and strategy, cash flow and funding, restructuring, premises, and legalities and contracts.
You survived the initial phase of lockdown, which forced you to change the way you were operating. You had to make decisions under stressed conditions while urgently exploring rapidly evolving government support and funding. Your staff learned to embrace the technology required to work productively from home. Much of your client activity was put on hold or cancelled. You reduced your use of freelancers, furloughed staff, reduced pay and shortened working weeks to reduce costs accordingly.
Our survey of media and marketing business in April showed that only 2% of media businesses considered the Coronavirus would fatally affect their business. To date, we have seen few failures. However, it is often in the recovery period that businesses fail.
Now you need to work out how you will thrive post-Coronavirus, amidst the economic and social challenges that will undoubtedly be with us for some time. Dare we use the phrase, the new normal?
Series 1: Talent requirements and incentivisation
Our first article looks at how you can use this opportunity to re-establish your staffing structure and remuneration policy.
Businesses also need to consider how they phase furloughed employees back to work in a cost effective way, making their wellbeing a priority. Redundancies must be handled in the appropriate way – we will explore this aspect in more detail in subsequent articles in this series.
Everyone knows that the most important asset of any media business is the talent that goes up and down in the lift at the start and finish of each day. Or rather that now that logs in from home each day.
However, they are also likely to be your biggest cost as a media business, so it’s crucial to get your resourcing levels right. This means examining not only the level you require now but what you need for the medium and longer term to deliver growth going forwards.
Forecasting revenues is difficult right now, with many media businesses having very little visibility on fees. As your forecast fee income changes, you will probably need to review your resource requirements frequently.
Get your staff KPIs right
Importantly, your people costs as a percentage of fee income should not exceed 60% of your fee income. In our annual survey on the financial performance of marketing businesses, those that stay within this benchmark generally deliver healthy profit margins.
Use this period as an opportunity to stand back and scrutinise your talent requirements. This might necessitate taking some difficult decisions that you have been putting off regarding the mix of employees.
Some agencies that have failed to reach growth aspirations find they have got fat round the middle, as individuals have been promoted into positions that don’t really exist, resulting in too many senior individuals not pulling in enough fees. You might feel it’s time to migrate your talent base towards those with more digital skills or revisit the diversity of your workforce – more remote working will likely facilitate this. Flexible working and reduced working weeks for some may also be part of the solution. Either way, you’ll need a highly capable and engaged management team to help you thrive
Freelancers have long been a key feature in supplementing media industry employees in a more flexible way. They were probably one of the first costs you cut when the Coronavirus crisis hit. However, using freelancers can have pros and cons. Used well, they can be an excellent way to manage peaks and troughs. Used badly, they can erode profit quickly.
While historically expensive, going forwards it is likely the freelancer market will cool down as freelancers see the upside of being in employment. Think through how you could phase them back in and have a system to track their usage carefully. This involves proper sign-off procedures from those who oversee your capacity planning.
Recruit for the agency you want to be
When it comes to recruitment, you want to ensure you are attracting the best. Now is the time to review your employer proposition, ensure you are the employer of choice and can attract high-calibre people.
Surveys we have carried out in the past have shown that talent is attracted to working with great clients and great leadership teams. They are hungry to develop their skills and do great work as well as valuing what goes into their pay packet. Training and development opportunities feature heavily as well as feeling valued by their employer.
Review your recruitment procedures to ensure you are speaking to the right people and positioning your agency as an attractive place to work.
Let staff have their say
Increasingly, employees are concerned about the corporate behaviour of their employer. Happy and motivated employees attract other good-quality employees through recommendation. Run employee engagement surveys to see what your employees want right now and what motivates them.
When it comes to pay, cash is something you may not be awash with at the moment, so consider alternative remuneration models. This might be deferred bonuses or share schemes, such as EMI share option schemes where employees participate in the future value growth of the business and feel part of the team. Employee ownership trusts are an alternative way to incentivise employees via part ownership while enabling owners to realise cash from the business tax-free.
Get help from the experts
At Moore Kingston Smith, we can help you dissect and analyse your overall people strategy, using our cost-effective HR360 workshop. Our HR consultants can advise further on employer brand, employee engagement, incentives, salary benchmarking, redundancy and recruitment.
For a no-obligation chat, get in touch with one of our team.