The past two decades have led to unprecedented change within the creative industries, primarily in response to the explosion of new channels and digital touchpoints in our lives. In fact, the creative industries are growing faster than any other sector in the UK, contributing £92 billion to the economy and employing around two million people.
With so many communication channels available, clients are issuing ambitious briefs, often beyond the usual scope of what a traditional agency is able to offer in house. For many companies, the only way to survive and win business is to use the services of freelancers and third parties with niche skills. As a result, most agencies now have a raft of suppliers and freelancers on their books – designers, animators, cameramen, copy writers, coders, app makers and more – and these can provide specialist expertise at short notice.
In addition, there is the perennial industry problem of finding and retaining permanent talent and once again, turning to a pool of creative freelancers to fill resource voids can help agencies manage growth in a flexible way. The use of short term workers is substantial – according to the Creative Industries Federation, nearly half of workers in the UK’s creative industries are freelance compared with only 15 per cent across the workforce as a whole.
The rise of creative communities and networks such as The Freelance Circle, YunoJuno, The Dots and Movidiam is helping to democratise the process of connecting specialist freelancers to agencies. Pip Jamieson, founder of The Dots, explains it best, saying “with the rise of freelancing, there is a good opportunity to improve skills-matching across the industry, leading to better creative output and efficiencies for the economy as a whole.”
The film and TV production world has operated like this for years – a team of writers, directors, editors, producers, actors, actresses, cameramen, make up and costume people and many more is pulled together to work on a specific project but once it is over, the team move on to other jobs. This sort of agility could be the way forward for agencies of the future.
Trust your team
If this is the case, then being able to trust and take care of your team of freelancers and suppliers is paramount. Research from Forrester and Tungsten Network has found that 84 per cent of businesses have been impacted by suppler failure (largely as a result of inadequate back-office processes). If a sub-contractor you are relying on to deliver a piece of work encounters financial problems or vanishes into the ether, then an agency’s relationship with its client could be in jeopardy. A company is only as strong as the weakest link in its supply chain. It is therefore essential that companies encourage strong supply chain relationships and, in particular, pay promptly – an age-old challenge often faced by freelancers in the media world.
It is commonplace for freelancers and suppliers to have individually negotiated rates and terms and conditions. This can make the job of the payments team incredibly complicated, particularly if the payment process isn’t digitised. It is essential that agencies ensure their back-office processes are fit for purpose in a modern, digital world. They need to be electronic, streamlined and transparent so that payment can be prompt and efficient.
If an agency encourages all of its suppliers to sign up to an electronic network, this gives companies immediate visibility of their suppliers and invoices, and provides a unified view of company spending. Spend analytics tools can then be effectively deployed to help firms crunch the data and identify price variances and duplications and negotiate better prices.
Benefits for all businesses, no matter the size
Digitising the payment process is achievable for businesses of all sizes. As 95 per cent of creative industries businesses are micro businesses (less than 10 employees) and 69 per cent have a turnover of less than £100,000, value for money is vital. Going paperless increases the efficiency and accuracy of the payment process and reduces the cost of handling invoices by more than 50 per cent. Suppliers can check invoice status online and this usually reduces calls and emails by 60 per cent, increasing productivity and again cutting costs. It will also boost the health of the supply chain when smaller companies downstream know where they stand in terms of payment and feel confident that they will be treated well and paid promptly.
With increasingly complex, global and fragmented supply chains, agencies must modernise their back office. It is incongruous that firms would be doing everything within their grasp to promote an image of being modern, innovative and agile in terms of their creative work, yet have outdated and clunky administrative processes. Going digital enables agencies to work with their suppliers, no matter how many, in a transparent and efficient way that fosters collaboration and ensures timely payment.