The Economic Crisis in the World of Graphic Design...

philjohns

Senior Member
Okay, with all this economic stuff flying around the newspapers, I'm interested to know who is actually realising a downfall in jobs?

I for one know that I am not...
 
I can tell you what is happening in Thailand. As gas price has risen in the past months, the food price also increase, and since human being depends on food to survive, every other price rose (cab fare, bus fare). This effects graphic designer in Thailand in that, as the price of everything rises, companies are more incline to use their in-house designer, OR hire the least expensive freelancer (because they all ready spent their money on expensive raw materials). Major design firms set the price too high, while college students are willing to do the same amount of work (although the qualities are of course, up to debate) for much less.

I haven't heard of any major design firms letting go of designers. But there are definitely news of them suffering from severe financial blow. It starts with lack of projects coming in.
 
I've not seen the effects either and personally I think the whole thing is being blown out of proportion.

I yet to actually hear someone turn around and say "I'm really struggling with this financial crisis". You see people on the news saying it but people will say anything if you point a camera at them.
 
I think it's too early to tell. I'm having a good year, but we probably all still feed from budgets that were assigned before the summer, so I think that the crunch will properly kick in the second quarter of 2009. There is plenty of doom-mongering in the press, and it is perfectly possible that this downturn will be sharp and painful but short.

But a downturn it will be, no question. No disrespect, but it's a bit naive to think that the graphic design industry will somehow not be affected by it. I'm not that old ;-) and wasn't really in business when the last recession struck in the early nineties, but I went through the isolated mini-recession of the dotcom era as an entrepreneur, and I tell you it wasn't fun. I also have plenty of colleagues who ran successful design houses in the late eighties and almost overnight had their businesses wiped out in '91.

I hear people say that 'the digital industry usually isn't affected by this sort of thing', and I'm thinking, there wasn't a digital industry to speak of when the last recession happened, so how do we know? We do know that things like advertising and PR are one of the first items to be cut on companies' expenditure lists (whether that's wise or not).

@Purplegurl
Thanks for pointing out that article. Broadcast design and production is definitely in turmoil because of many factors, some to do with the economic downturn, some with licence fee changes etc. Channel 4 have been announcing all sorts of cuts right across the board, and the BBC are going through more public value assessments and management re-structures than you can shake a stick at. They definitely have less money than they used to, whether for graphic design or anything else.

Sorry if I sound negative - I don't think we will be burning our furniture for heating next winter (as some tabloids do), but I'm probably urging people to be cautious and prepared instead of saying 'well, I work in digital and my order books are full'.

On a side note, I think that freelancing is a good option these days, because it's the staff costs that will be cut down, ie getting rid of in-house teams and then getting externals on competitive rates to do the work. A permanent job can be an illusion of security. I should know - I had to make 80% of my great staff redundant in a couple of months once...

Wolf.
 
Another thing about credit crunchy times: I heard from another small agency owner that they had their first bounced cheque from a client recently. That might be something to look out for - get a credit checking service!
 
Wolf said:
Sorry if I sound negative - I don't think we will be burning our furniture for heating next winter (as some tabloids do), but I'm probably urging people to be cautious and prepared instead of saying 'well, I work in digital and my order books are full'.

It's annoying though. Litrally all I've heard for 6 weeks is about the financial crisis in the UK at the moment, tabloids, broadsheets and the news they're all at it.

If I had a pound for every tip I'd read on how to 'survive the credit crunch' I'd not need to work. Businesses (and so called experts) need to stop running their gums about this and just start getting on with it. If this is expected to last even 2-3 years then will we still be talking about 'how to survive it' then?

It's like discussing the best way to put out a fire whilst its burning down your house.
 
The best evalution I've read of current circumstances is this one-

"We are not in a recession or depression, we are in a time of uncertainty as to where the markets are heading."

My agency is starting to feel the need by some clients to keep a close eye on external costs. More questions are being raised and return on investment is more paramount than ever. I heard a rumour that NCJ Media up here are cutting 1 in 8 staff. But I think that's because technology and online publishing is becoming more powerful and cost effective as a medium. Mid size agencies will feel the pinch as we have min cost and overheads to hit, Iv'e lost some work recently to single freelancers who can/will do the work for a fraction of the price ( but that sore point is another thread). I would suggest everyone breathe in a little bit.
 
Berry said:
I heard a rumour that NCJ Media up here are cutting 1 in 8 staff.

I have a friend that works in the design department there apparently they are going to be loosing some staff there between now and (I think) April. But then as far as I know this has happened once before at NCJ.

I can help but think that 'recession' and 'financial crisis' are trigger words for companies to just drop staff that they couldn't have done without over the past 3-4 years when they were rolling in cash who now aren't needed.

Here's an idea to beat the 'credit crunch' get those at the top to take a £10k pay cut for the next 2 years so that people further down the chain can remain in work and in turn help support the economy.
 
@Berry
I like the calming sound of that quote, but by definition we are heading for a recession (ie two subsequent quarters of negative growth). The question is what you do with that fact, I suppose.

@mrleesimpson
I hear what you're saying. I agree that it's become the media story and dinner time conversation of the last couple of months. And it's wearing everybody out. But then again, it isn't like the papers discussing whoever got booted off X-Factor. We have to take this one seriously I think.

Don't forget that there are plenty of people in business now who have never experienced a downturn. So basic advice may sound boring after a while, but I bet there were people in '91 who said "I wish someone had told me what to expect."
 
This is my first 'recession' so I don't have any experience, so what I'm about to say is all my opinions. I think that the markets were in a state where everything was going too well (hourse prices are way higher than they should be) so in my opinion this is a period of adjustment rather than recession (although I know that technically speaking it is a recession). If there wasn't the scare-mongering of all of the news papers then people wouldn't panic and stop spending money. Stop spending money = recession. Newspapers are the biggest terrorists that we face in my opinion.

Anyway, I have heard that the first sign of anything hitting the design industry is when clients start paying a bit later than they normally would. Still paying, but not as promptly. I have heard a couple of people from different agencies say that this will be the sign of something beginning to hit.
 
slightlymore said:
I have heard that the first sign of anything hitting the design industry is when clients start paying a bit later than they normally would. Still paying, but not as promptly. I have heard a couple of people from different agencies say that this will be the sign of something beginning to hit.

Everybody is hanging onto the money a bit longer now and that does have a huge domino effect.
It's like the stuck guy in a two mile traffic jam, because someone has broken down at the traffic light.
I had my first experience in a meeting yesterday when a client wanted a price reduction on the agency hourly rate just because of the current times and economy. The squeeze is a filtering down process and we may all have to adjust accordingly. This is a competitive business and it's going to get even more competitive. I expect more squeezing...
 
There's an interesting article regarding the current economic downturn by Barry Seal from Anthem Worldwide on Creative Match at the moment - creativematch: Riding the economic downturn

Finally, create a Business Development ‘culture’ within the agency. This is not just the job for the one person with a desk and a telephone – everybody should contribute. Identify the low hanging fruit and the real opportunities. Don’t waste time and money on long shots – explore the accounts you have and identify who else you should be speaking to. Ask for referrals and recommendations from people that know and love you!

Task yourself and/or the client services team/s to start meaningful dialogue. The gestation period from initial contact to securing business can be long so get motoring!

It’s true that, at the first signs of financial turmoil, many client companies start to feel twitchy about spending money and it is often the advertising and marketing budgets that are the first to be slashed.

However, if you plan ahead, and work with your clients to help them identify the key opportunities they should seize during these times and get busy at getting busier, you should be able to steer your own business (and theirs) through to calmer waters.

As Peter Drucker once said, “The best way to predict the future is to create it”
Some very wise words there, definitely worth a few minutes to read.
Greg
 
For Kay and myself at Calibre Designs it has been ok.
We have a steady flow of work coming in and it keeps us going.

|Maybe its good for us designers that there is a slow down in the economy because that way other companies look for ways to get more business and one way is to improve their image and marketing.

That is what we do and it is what we all do very well...

D
 
Just had one very large today client go into Voluntary Liquidation. Been chasing monies for over 6 months and the b**tards pull this. Not a small amount neither - someone's annual salary.
 
Sorry to hear that Berry, is there any other routes you can pursue to get the funds now they've gone into liquidation?
 
Greg said:
Sorry to hear that Berry, is there any other routes you can pursue to get the funds now they've gone into liquidation?

I have a big hammer in the garage!

According to RiskDisc the companies assets are huge, so I'm hoping there isn't a problem. It all depends how far down the pecking list you are. I'll have to wait and see.
 
Fingers crossed for you then, what sector is the company in?
(understand if prefer not to say for various reasons)
 
Greg said:
Fingers crossed for you then, what sector is the company in?
(understand if prefer not to say for various reasons)

I'll leave that till i find out if i need my hammer!;)
 
Back
Top