ST. LOUIS: With prospects for a slow fourth quarter - and a slow first quarter 2003 - Fleishman-Hillard has instituted a range of cost-cutting measures that includes voluntary pay cuts for senior executives and staff reductions.
At the same time, the Midwest offices of Fleishman and some other agencies have made senior strategic hires with the hopes of building certain practices.
"We have accomplished most of our expense reductions through non-personnel items," said Dave Senay, Fleishman regional president, Midwest.
Senior staff has agreed to take fourth-quarter pay reductions of 3% to 10%. Some employees have been offered the opportunity to buy additional vacation time, while others have switched to a part-time schedule to gain more work/family flexibility, he said.
The agency plans to cut its overall head count 2% to 3%, or 45 to 60 people, in the quarter. Between one-third and one-half of those cuts will be in non-PR support functions, Senay said.
"There is dislocation currently where you have staff skilled in a particular area where there is not a lot of demand," Senay said.
Technology continues to suffer, but other areas, such as public affairs, are showing some regional bright spots. "It's very spotty right now," Senay said. "We're trying to be very nimble."
Indeed, Fleishman is still looking to hire "business builders, relationship builders. We're looking for people who can strike and maintain long-term relationships," Senay added.
Among the key senior personnel moves made by Fleishman's Chicago office is the hiring of Paula Waters away from Ogilvy as an SVP and head of its healthcare practice.
Other Windy City agencies are making similar moves. Burson-Marsteller hired Athan Demakos from Fleishman as an MD in its corporate and financial practice. He will lead Chicago IR efforts.
Ogilvy hired Rick Gray as an SVP in its Chicago corporate practice. Gray was VP of marketing at Lante, a one-time Chicago internet high-flier.
Prior to that, he had been director of PR at A.T. Kearney.
"The agencies are trying to set the table for 2003," said Brad Wilks, Ogilvy MD in Chicago. While agencies search for people with proven records for bringing in business, corporations searching for agency help "are increasingly demanding and expecting a lot more senior-level talent," Wilks said.
Bob McEwen, Burson's president and CEO of the Midwest region, said, "There's very selective and very strategic hiring going on."
Recognizing healthcare as a growth opportunity was the main impetus for Fleishman's pursuit of Waters to increase the size of its Chicago operation, said Cynthia Hardie, Fleishman GM in Chicago.
"We want to grow, and we've got the get the right people in place to do that," Hardie said.
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