- Almost half of respondents have been directly impacted health-wise by COVID-19; 18% have team members or family of team members who have died from COVID-19
- Clients: Almost 64% reduced PR budgets, one in three significantly. Agencies: 77% of clients reduced retainers; 90% postponed campaigns, 83% canceled activations
- Almost four in 10 clients imposed extended payment terms during COVID-19
- One in five agencies laid off staff and instigated furloughs; 11% of clients
- Only 30% of respondents applied for Payment Protection Program loans
- New world of work will include: social distancing, virtual workforces, daily deep cleaning, screening, temperature tests and work-life balance
- More than half of respondents believe they will return to the office in June or July
Coronavirus has changed the world forever and the PR industry is certainly not immune to the fundamental shifts it is making to every aspect of our lives.
At the start of the shutdown in mid-March, PRWeek ran a quick poll to assess initial impact and feelings about COVID-19 and the prospects for PR.
Seven weeks on and the business and social landscape has changed fundamentally. Over 36 million Americans have been added to the unemployment register, the death toll due to the virus is fast approaching 85,000, and 1.4 million people are reported to have been infected with COVID-19.
As the country tries to plot a safe return to work and a restarting of the economy, the short- and long-term effects of the pandemic are taking shape.
PRWeek’s Coronavirus Survey 2.0, conducted last week, received 280 responses, almost equally split between the client (51.8%) and agency (48.2%) sides of the business. It represents the most thorough and credible analysis of the impact of the virus and the implications for the future of the PR industry.
The survey was predicated on an assumption that most PR professionals are working from home, and we realize that doesn’t apply to 100% of individuals.
Some people are still conducting their business from physical environments – whether that is an office or other location – and we salute those who are putting themselves in harm’s way to do their jobs. As one respondent said, “I’m in the office every day!”
The survey also didn’t acknowledge the fact that some people already work from home and the lockdown experience wasn’t particularly new for them, which is fair comment.
However, in general the survey shed a bright light on what the pandemic has meant for PR pros so far and what it will bring in the future. Following are the main findings in seven top-line areas.
COVID-19 is first and foremost a health crisis that has led to premature loss of life for tens of thousands of Americans and intense health problems for hundreds of thousands of others.
The PR industry is not exempt from these health impacts: 17.6% of respondents work for companies where team members have died from COVID-19 (1.8%) or family members of staffers have died (15.8%).
More than one in five (21.1%) team members of respondents have contracted coronavirus and more than one in three (34.6%) have family members who have fallen ill.
So, in total, almost half of respondents (46.1%) work in companies where their team members or team members’ families have been directly impacted in a significant way by this health crisis.
That is a significant factor to take into account as we analyze the impact of COVID-19 and assess how it will inform strategies around returning to work, commuting, traveling on business, congregating among large groups of people, working from home and what the new office environment will look like. Many PR pros are grieving and have lost loved ones.
2. PR BUDGETS
As with most discussions about budgets, it’s interesting to compare responses from clients versus those who work at agencies - the two different perceptions don’t always tally…
Almost two-thirds of clients (63.7%) said they have reduced communications budgets as a result of the pandemic: 30.4% significantly, 33.3% by a little.
In terms of retainer arrangements with PR firms, 9% of clients have scrapped them altogether, while 22.6% have revised them to reduce their commitments. However, 77.3% of agency respondents said clients have reduced retainer arrangements, 21.4% significantly, 55.9% somewhat.
When asked about the impact of COVID-19 on individual communications activations, 90.4% of agencies said clients had postponed campaigns, 41.4% significantly, 49% somewhat; 82.7% said clients had canceled campaigns - 26.4% significantly, 56.3% somewhat.
Clearly agencies are dealing with multiple clients and in-house pros only have their own prism through which to view the issue, but it seems the impression of these questions is somewhat in the eye of the beholder.
On the plus side for PR firms, clients are increasing spending in certain areas as a response to the health pandemic, especially in crisis communications (71.4%), corporate reputation (44.4%) and employee engagement (39.7%).
As one respondent noted, there are “some opportunities to engage with existing clients in new ways and with new prospective clients via industry associations and professional groups.”
The topic of remuneration for services rendered has been a thorny one for some time, with procurement departments imposing more and more stringent contractual arrangements on their agency partners in recent years.
COVID-19 has accelerated this trend even further, with agency respondents reporting that 38.3% of clients had imposed extended payment terms on them since the onset of the coronavirus crisis.
3. STAFF REDUCTIONS
Every company in the United States is assessing its workforce in light of the coronavirus health crisis, laying off staff, furloughing, freezing hiring and reducing salaries.
Marketing services holding company chiefs including John Wren at Omnicom, Mark Read at WPP, Michael Roth at Interpublic Group and Arthur Sadoun at Publicis signaled what was coming down the pipe and the impact has already been seen at individual PR firms including FleishmanHillard, Ketchum, Weber Shandwick, MSL, Golin and no doubt many others.
This is reflected in the survey results, with almost one in five agency respondents reporting layoffs at their firms, 4.2% describing them as significant (greater than 3% of total staffers), 15.3% as some layoffs; 18.8% indicating furloughs, 4.9% significant (greater than 5% of staffers).
There is a hiring freeze at the agencies of more than one-third of respondents (34.7%) and salary reductions at 28.5%.
However, it’s worth noting that the largest percentage answer to this question was “no change” (38.9%), so the news is not universally bad in respect to staffing. But that’s no consolation to the respondent who commented, “My agency position was eliminated due to COVID-19.”
On the client side, 11.2% have instigated layoffs in their communications teams, 4.5% significantly (in excess of 3% of total staffers); 22.4% have introduced furloughs, 7.5% on a significant level (more than 5%).
Hiring freezes are in place at almost a quarter of in-house PR teams (23.9%) and there have been salary reductions at 14.2% of them. More optimistically, 5.2% of respondents report that their teams have increased staff numbers during the crisis, while 49.3% have seen no change.
Companies are reacting to these unprecedented times and reluctantly making adjustments accordingly. Despite bright spots in terms of extra work in crisis, reputation and healthcare and some companies up-staffing because of increased demand, the overriding feeling displayed in the COVID-19 survey is one of caution. As one respondent cautioned: “Once everybody tallies the costs, there will be a lot of restructuring and layoffs.”
4. FINANCIAL ASSISTANCE
The damage wrought by the COVID-19 pandemic has presented challenges to the global and U.S. economies the likes of which haven’t been seen for many generations. To combat that, the government has introduced various plans to support businesses decimated by the downturn.
The Paycheck Protection Program (PPP) was instigated at the start of April with a $350 billion package as part of an overall $2 trillion CARES stimulus package. Another $320 billion was unlocked at the end of April in a second tranche of PPP loans.
For survey respondents at the majority of businesses (61.7%), these sources of assistance were either not applicable or they didn’t choose to take advantage of them.
But, as one person commented, “this has been devastating for my agency,” so many respondents’ have taken advantage of this and other sources of financial assistance.
However, only 30% of survey respondents have applied for PPP loans; 10% are seeking state or local relief, 8.7% Small Business Administration debt relief or Express Bridge Loans; 4.8% requested an Economic Injury Disaster Loan Emergency Advance; and 4.3% took out bank loans or are using their overdraft facilities.
5. WORKPLACE OF THE FUTURE
The majority of the PR workforce has spent the last two months working from home under lockdown conditions.
Home schooling, social distancing, protective masks, online client interaction, remote pitches, virtual calls and meetings have all become commonplace. Business travel, attendance at physical events and office working have taken a backseat during this time.
While many of these developments are challenging, the hiatus has proved that mass working from home is definitely viable and given business leaders pause for thought as expensive real estate lies empty while their enterprises carry on operating, if not in a business as usual pattern, certainly in a functional and efficient way.
Many companies have already stated an intention to reduce their commercial property footprints in the future. Twitter CEO Jack Dorsey declared that his employees could work from home indefinitely if they chose to do so.
PRWeek wanted to find out from survey respondents how they see the world of work shaping up and what they want the office environment to look like when they do eventually return to a physical environment.
Almost four out of five respondents (77%) expect there to be fewer large-scale physical events. Related to that, 62.1% believe there will be less domestic business travel, and 60.1% say the same about global business travel. And half of respondents (50.6%) expect more virtual agency pitches as a matter of course. The days of flying to China for one business meeting or a speculative one-off agency pitch are probably a thing of the past.
Picking up on statements already made by their leaders, almost three out of four respondents (72.4%) predict less centralized office space, while 58% say that WFH is now the new normal following the coronavirus experiment.
When workers do return to the office, they have high expectations about what that experience will look like if they are to feel comfortable in conducting their daily business.
A vast majority of survey respondents (89.3%) expect to have social distancing measures in place at work, the same percentage believe workforces will be more virtual.
At the very least, 73.8% of respondents will insist on daily deep cleaning regimens, 57.6% want screening protocols and 45.4% temperature tests. Only 16.6% will expect their employers to provide coronavirus testing in the workplace and just 8.9% want isolation rooms.
PR professionals have welcomed the increased focus on employee engagement at their companies and clients and also a focus on wellbeing and life balance. Forty-eight percent expect employers to place increased priority on work-life balance and 32.8% desire enhanced employee engagement initiatives at their organizations.
One thing is for sure: Work and the office are going to look very different in a post-pandemic environment.
As one respondent summed it up: “We are relying on our company's leaders, the government and our instincts to do what is best for us. I want to make sure when I step back into my office I'll feel safe and get solace in the fact that my building and company are doing what they can to make sure we are healthy, both physically and mentally.”
6. RETURN TO WORK
The number of confirmed new cases of COVID-19 has finally started to decline. A strategy of lockdowns, social distancing and testing appears to be paying dividends.
That is leading to Americans feeling more confident about breaking their isolation. Cellphone data analyzed by The New York Times suggests 25 million more people in the U.S. left their homes last week compared to the six weeks prior.
However, the danger is that an abandonment of the very measures that led to the improvement in the state of the coronavirus pandemic will lead to a resurgence in outbreaks of the disease. The timing of ending the lockdown has to be handled intelligently and sensitively.
While 17.6% of PRWeek survey respondents admit they just don’t know when they will return to office-based working, the majority are split pretty much equally between expecting to go back in June (27.8%) or July (27.5%).
A further 10.6% believe they will be back in August, with 11.4% saying September. The remaining 5% believe they won’t return to the office until Q4 of 2020.
7. LONG-TERM BUSINESS IMPACT
As part of the survey, PRWeek identified 10 macro elements of business that have been - and will be - affected by the COVID-19 pandemic and asked respondents to rank them from 1-10 in terms of which will be impacted most.
Of the 222 people who responded, the number of people who ranked each element as number one was as follows:
1. Travel, events, sports and entertainment – 101
2. Health services – 44
3. Purpose – 21
4. Supply chain – 14
5. Employee engagement – 13
6. Infrastructure investment – 10
7. Energy – 8
8. Food production and processing – 5
9. Environment – 4
10. Government relations – 2
In terms of five different practice areas typically covered by PR professionals, PRWeek also asked which of these would be most affected by coronavirus, and the ranking of 238 survey respondents who placed each segment as most impacted came out as follows:
1. Consumer/brand campaigns – 80
2. Crisis communications – 78
3. Public information – 36
4. Corporate assignments – 32
5. Public affairs – 12
The PRWeek COVID-19 Survey 2.0 is the most comprehensive analysis of the impact of coronavirus on the PR industry produced so far and bears close analysis by anyone involved in plotting their way through the pandemic.
As one survey respondent noted, “nothing is certain” and there will inevitably be “lots of unknown future planning” on the horizon.
However, the resilience of the PR industry has already been on full display throughout the crisis and PR professionals are used to acting nimbly and swiftly to deal with unexpected circumstances.
As another respondent said, crises like these and the resulting recessions are formative periods that shape careers: “The pandemic provided unique media pitches and anyone who is navigating it is part of an unprecedented opportunity to add to his or her life resume by working in this environment.”
That’s a difficult concept to absorb while you are in the thick of a scenario, but it is well worth pausing for thought to consider as you draw long-term conclusions from this unprecedented COVID-19 experience.