CorpComms Magazine

It is almost 18 months since Ben Bernanke, chairman of America's Federal Reserve Board, starkly told key legislators that 'we may not have an economy on Monday' if they did not agree a $700 billion emergency bail out for the rapidly worsening financial crisis.

The intervening period has not been easy. Economies have entered (and in some cases left) recession, public sector deficits have ballooned while redundancies have risen. But in the corporate communications sector, there are signs that green shoots are starting to peek through the darkness.

It may be tentative, but the consensus from recruitment professionals specialising in communications suggests that the early part of this year may be a time for cautious optimism.

Claire Tuffin, managing director at VMA Search, says that the volume of jobs has undoubtedly picked up over the past quarter as confidence began to return to the market. 'This was heralded by senior professionals who have 'sat tight' for the earlier part of the year now deciding to move on, which creates movement in the market both at their level and within their teams,' she says. 'All indications suggest that this trend will continue into the New Year.'  

Sarah Leembruggen, managing partner at The Works Recruitment, has witnessed similarly positive signs. Within her firm, she cites a 400 per cent increase in the number of new positions last October compared to September, because of increasing market confidence. She also says that last October the agency handled a 54 per cent increase in new commissions compared to October 2008. The level, she claims, is equivalent to that experienced in the more buoyant market of 2007.

Time may also play an important factor in propelling an increase in recruitment activity. 'There's only a certain period of time over which people can put a hold on recruitment activity,' says Nick Helsby, managing director at Watson Helsby. 'Many companies have put capability building, including corporate communications, on hold, but in the end something has to give.' The result, in Helsby's view, is a considerably improved and improving job market.

Despite rising in-house vacancies, one trend that is likely to continue for a while is the engagement of agencies or interim communications managers. 'For the first six to nine months of 2009, the strongest part of the market was in-house corporate communications,' says Ros Kindersley, managing director at JFL Search & Selection. 'That changed in the final quarter of the year because quite a few corporates were re-engaging communication or PR agencies on a project basis.'

Kindersley thinks that cautious optimism lay at the heart of this trend - with companies wanting to increase communications activity, but on short-term projects that will be less risky than hiring a permanent senior in-house manager.

Salary prospects

While there are more jobs on the market, salary stabilisation, rather than major salary hikes, will likely be the immediate order of the day. Last year, Leembruggen witnessed a number of candidates, particularly among those who have been made redundant, accepting a 'sometimes quite significant' salary cut.

She now considers that 'with more roles around this year, there will be less of a need to drop salary'. Kindersley goes a little further. 'Salaries overall were frozen last year,' she says. 'But we are at a turning point. 2009 was the year of survival, but 2010 is going to be more of a year of modest or well-planned growth.'

Salary trends may be difficult to predict, however, while bonuses remain a contentious issue. Chantal Tregear, director at Taylor Bennett, has encountered many companies that are in the process of rethinking their pay packages in light of a more sensitive public attitude to the bonus culture.

'In the financial services sector, there is far more caution over using the term bonus, or guaranteed bonuses. Some are even reluctant to quote bonus rates to headhunters,' she says. 'For a lot of people, the bonus made up a significant part of the salary, so employers are having to be smarter about how they put their pay packages together. Some environments are rewriting bonus structures as we speak, so we can't tell you what they're going to look like.'

Nor does Tregear think that salary increases will necessarily follow a generally improving market. 'Where salaries rise, it'll follow a lot more scrutiny,' she says. 'Over the past five years, communications has been a rising profession; candidates were in a very strong position. But companies are now being a lot more investigative and thorough in their recruitment with more due diligence being undertaken. Ultimately, this is a good thing for the profession.'

Sector buoyancy

Despite some reticence in forecasting salaries, confidence that salaries will at least stabilise over the next year may be connected to signs of greater buoyancy in some sectors. VMA Search, for instance, has seen particular movement in financial services. In its recent 'State of the Market Survey', it claims that 46 per cent of companies in the financial services sector are looking to hire over the next six months. This is a significantly higher figure than the non-financial services market. Kindersley agrees with these findings. 'Financial services may have been the first sector to implode in the recession, but it also looks like it's going to be one of the first to recover,' she says.

Rather than a recent uplift as such, Tregear viewed financial services as a more constant communications recruiter throughout recession because, she says, 'protecting their corporate reputation was ever more necessary'.

Instead, she expects more movement now from organisations that cut back dramatically in recession, and now need to ramp up resources for a speedy recovery. 'The professional services sector was absolutely hammered over the past year. They cut back or significantly reshaped their communications function - some were even left without anyone to manage their corporate reputation and media profiling, for example. These organisations should now bounce back and we should see an uplift to where they were previously.'

Leembruggen thinks that financial services, retail, and green technology or renewable energy will show greatest buoyancy in the months ahead, although she also cites areas of expertise that will likely be in demand, including digital communications and social media skills, corporate social responsibility and internal communications.

The latter represents, perhaps, greater appreciation among organisations of the specific strengths communications can bring to organisations. The recession may even have been a catalyst for demonstrating the value of a good communications team. 'One of the key things this downturn has highlighted is the acknowledged importance of effective communications in managing internal and external reputation,' says Tuffin.

Helsby agrees. 'Companies and chief executives are more conscious than ever of the fragility of reputation,' he says. 'I think they now recognise that the corporate communications function has the right toolset to have a big impact on how their companies are perceived. And that's a hugely prized asset.'

Challenges ahead

A year on from the dire days of late 2008 and the recruitment industry seems confident of better days ahead. There is no doubt, however, that the positive attitude is guarded. Tregear, for instance, thinks there may be some internal issues for corporate communications professionals to consider post-recession. 'In some organisations, there has been a bit of a land grab from other departments,' she explains. 'For example, human resources has had much more of an opportunity to take on board employee engagement and some internal communications because it has often had a lead role in restructuring, following redundancies and such like.' Teams that have managed the process well may now be reluctant to give up their newly won sphere of influence.

Ben Atfield, director at Ellwood & Atfield, also points to external challenges, not least in the impact a change of government might bring. 'People are expecting substantial cuts in headcount in government-related communication areas, which has been a big driver in communications over the past five years,' he says. 'Everybody thinks that the Conservatives don't value communications in the way that Labour has. We may be proved wrong, but David Cameron's 'bonfire of the quangos' speech may signal a shrinking of professional communicators.'

Worryingly, he also thinks that redundancies in government areas will have a downward pressure on the communications profession as a whole. 'If you've been made redundant from a government department and you can't get a post in the business sector because of a lack of jobs, then you'll likely accept a lower salary, which has a knock-on effect for the whole sector,' he says.

Leembruggen also reinforces this proposition by pointing out that 'in-house senior level hires remain sparse'.

Another unknown remains economic developments. Forecasters have been predicting likely scenarios, including a 'LUV' shaped recovery, with L representing the shape of economic recovery in Europe and particularly the UK, U for the US, and V for the BRIC countries - Brazil, Russia, India and China. But others still fear the possibility of a 'W' double-dip, in which an upturn is quickly followed by another sharp dip in fortunes. If this were to happen, then the future may still be anyone's game.

This year promises both challenges and opportunities for the corporate communications sector. There is little doubt that it has performed well to survive the considerable pressures of the past 12 to 18 months. Indeed, in some quarters it has demonstrated its value to the extent that recruiters are now seeing extremely positive signs for business this year. Even if there is more trouble to come, corporate communicators have proved that they are in a unique position to support their organisations through challenging times.

It has been a trial of fire, but one from which the communications profession looks likely to prevail. 

Optimism returns to market

More than two thirds of PR agencies have seen an uplift in business levels while 64 per cent of respondents in the financial sector have seen an uplift in business over the past three months, according to VMA Search's 'State of the Market Survey'.

The survey, which polled more than 100 of the UK's leading corporate communications directors and agency practitioners, found an uplift in positive sentiment within the industry.

Harry Friend, head of the financial services practice, predicted the worst is over. 'These results show there has been a significant uplift in business levels over the past few months and with a considerable number of these companies looking to grow their communications team,' he said.

Nearly half of financial services companies and a quarter of non-financial services companies claim that they are looking to hire over the next six months.

Although 67 per cent of PR agencies predicted that the tough economic climate will remain over the next six months, 95 per cent of respondents expect to increase their client base over the same period. Three in four agencies predict up to 20 per cent increase in new client wins. 

The economic downturn has also caused clients to reappraise the value of their agency suppliers, it seems. A staggering 86 per cent of agencies reported that their clients now view them as more important, or as important, as six months ago. 

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