Covid-19 has shaken the PR industry much like the rest of the economy. In some ways we got off lightly; for large parts of the industry pivoting to working from home has been relatively easy, and some service areas, such as public affairs and employee engagement, have been busier than ever before. But there has been real pain too, for example for anyone focused on hospitality or travel, or for businesses dependent on events or marketing spend. It has been a difficult period.
And the medium-term looks gloomy: as economies struggle to recover from the hammering they have taken in 2020 it is inevitable that communications budgets will come under pressure. Expect the usual pressure from procurement and questioning of agency spend that always comes during a downturn. But upheaval like this always brings opportunities as well as challenges. Bold players can definitely take advantage of the coming months.
One obvious area for PR companies to focus is on consolidation and non-organic growth. Inevitably some weaker companies will become available for purchase. Likewise, experienced and high-quality people will be available for hire as they are laid off by agencies and from in-house roles alike. If they are able to pick out the diamonds from the dross, ambitious businesses with sound finances could find ways to grow rapidly and add new skillsets, putting themselves in a much stronger position in a year to 18 months’ time.
Another opportunity may come as in-house teams are slimmed down and, in some cases, more senior and expensive communications leaders are let go. This could mean that clients lean ever more heavily on their agencies – but only if they give the best and most trusted advice that makes a real difference to commercial operations, not just to comms. Bold companies will find ways to be indispensable and add real value in the next few months.
But I think there are real risks if companies think they can be bold in other areas of their businesses, particularly when it comes to staff and office space. What might look like smart, decisive, steps taken now could prove to be anything but when the dust eventually settles.
Most obviously, dispensing with staff in order to make short-term cost savings could cause huge distortions in the future. For a few years after the last financial crisis the whole industry faced a dearth of good mid-level staff because so many companies had decided to pause recruitment in 2008 and afterwards. Some companies did better than others if they managed to hold onto their teams. It would be smart to proceed with caution when it comes to this, every agency’s most precious asset.
This time around we face a unique pressure to reduce the size of offices and change their configuration to allow for social distancing and/or a better work-life balance for those people able to base themselves at home. All of this makes sense, on the face of it, but smart companies will recognise that it comes with trade-offs, particularly when it comes to building affinity between staff and company and providing ways in which people can learn from one another. There are actually reasons that humans, and perhaps particularly those in the knowledge economy like PR folk, crowd together in offices within cities. We shouldn’t get rid of those advantages lightly.
The best companies will move slowly and understand that they will have to invest in maintaining links between their staff and in allowing colleagues to learn from one another. New forms of training and better means of communication will be needed. And firms should also realise that in six to 12 months we may have discovered ways to live with Covid, or even have a vaccine, and returning to office work even just for three days a week might look to be a very good idea. The new normal is not the new normal just yet, and making decisions that can be changed later has to be a good idea.
In short, to emerge quickly from the pandemic PR firms must be bold and cautious all at the same time. Moving rapidly and decisively in everything outward-facing is smart; being thoughtful and more deliberate when it comes to internal matters is smarter still. We all need to hold our nerve, and fight the good fight with the slash and burn bean counters. This too shall pass.