Nearly one in five agencies (17 per cent) are overservicing every single account, only eight per cent of agencies never overservice – which means it's a problem that impacts nine in ten of agencies – and 80 per cent believe it is a growing concern.
These are the shocking findings of a study of more than 400 PR professionals by Ginger Research in association with the PRCA.
The main reasons for overservicing are ‘goalposts shifting on projects’ (54 per cent), followed by ‘scope creep’ (50 per cent) and ‘working overtime to meet high client expectations’ (49 per cent).
The pitching merry-go-round and constant pressure to win new business also contributes to a cycle where PR and communications services are being undervalued and staff overstretched.
A third of agency staff blame overservicing on ‘unrealistics targets’ set at the start of campaigns to impress potential clients and a quarter bemoan pitch teams ‘promising the earth’ to win new business.
Major problems are that 30 per cent of agency staff are not confident enough to say ‘no’ to clients and 23 per cent claim that planners are not accurately predicting how long projects will take.
A client/agency mismatch
Katy Stolliday, founding partner at Blurred, has seen it all before. During her career she has worked at several high-profile agencies and believes the problem is industry-wide.
"In traditional PR models, you have retainer-based clients or rolling monthly contracts that are open-ended and don’t have any clarity on what they are delivering for the money," she said. "There’s no mechanism to stop [overservicing]."
Driving this trend are several factors: the constant pressure to win new business; a failure to properly scope work, particularly in areas like project management time; and traditional agencies often stocking up account teams with junior staff.
"This can lead to multiple rounds of amends, where if you had a more experienced and skilled team you would be able to land a higher quality service and end product on the first go," Stolliday said.
The remuneration model in which agencies charge on the basis of time spent, rather than outputs and outcomes delivered, can invariably lead to unrealistic demands, staff hours and scope creep. Stolliday's Blurred agency charges on outputs and outcomes and clearly defines the scope of work at the beginning of a client relationship, which means it is one of the eight per cent of agencies that does not overservice as a rule.
Hope&Glory boss James Gordon-MacIntosh agrees there is a mismatch between agencies selling time and clients demanding results.
"I don’t think agencies are entirely faultless here," he said.
"At best, we have a tendency to be over-optimistic about the amount that can be delivered in the time we allow, we under-estimate the hoops our clients have to jump through to get work away (and the knock-on impact that has on us) and – in our case at least – we tend to think about the quality of the work we deliver first, the recovery second.
"At worst, there are agencies that use overservice as competitive advantage and are willing to give time away to make themselves commercially more attractive or are unwilling to have grown-up discussions about money with clients, so that overservicing becomes an accepted (and expected) ‘norm’."
The impacts on staff
Overservicing has led to 15 per cent of PR agency staff considering quitting their jobs on a regular basis, and a fifth have thought about moving on to a new role in the past, the study found.
Shockingly, 86 per cent of agency staff have worked unpaid overtime because of overservicing – covering the gap between the budget and project work with their own personal time and for no financial gain.
Recruitment is also a factor: 21 per cent of PR practitioners polled said that many new staff members just don’t have adequate skills and experience to be time-effective, and 24 per cent lack the negotiation skills to manage client demands.
"We need to sort the issue – and not because of profitability. Agencies generally resource against the amount of time the fees allow, rather than for the time we’re really spending on our clients," Gordon-MacIntosh added.
"That means under-resourcing becomes rife and teams working overtime hours is the ultimate result. We owe it to our teams – not to our finance directors – to fix the problem, because they’re the people who pay the price for any unwillingness to tackle it."
Is overserviving a problem at an agency you have worked at? If you would like to share your story (even anonymously) – please contact: arvind.hickman@haymarket.com
