M&C Saatchi Talk has praised the Government’s Coronavirus Job Retention Scheme for allowing the agency to hold on to staff at a difficult time.
The agency, formed from the merger of group siblings M&C Public Relations and TALK.GLOBAL, has furloughed 20 per cent of its workforce since the lockdown period began in March.
This has helped the agency manage costs at a critical time. The M&C Saatchi Group has recently taken drastic action to shore up its balance sheet following financial difficulties, and there has been a huge drop in fee income at its PR agency since the coronavirus crisis began.
“Almost overnight, our fees went down dramatically,” M&C Saatchi Talk chief executive Jane Boardman told PRWeek. “A lot of clients in consumer said: ‘Nope, that’s it, we want to put stuff on hold, we’re being super cautious’.
“Projects got put immediately on hold and our fees went down between 40 and 50 per cent almost overnight… and none of our agencies are high-margin businesses.”
Some of this work has come from its events arm, which comprises about 20 per cent of the PR agency’s work, and included a “massive project” for telco EE at the Glastonbury Festival, which has now been cancelled.
Boardman praised the Government’s furloughing scheme, saying it has helped the agency manage its workforce and the drop in workload.
“I was looking at [PRWeek UK editor-in-chief Danny Rogers’ piece about furloughing], and while I do agree with it in principle, for us, furloughing has been a life-saver,” Boardman said.
“We don't want to make people redundant, we want to keep them and we want the business to come back up.”
There has been industry debate about whether furloughing was the right approach for communications agencies.
Freuds chief executive Arlo Brady said he did not believe businesses should accept state aid unless necessary, but many agencies have furloughed staff.
M&C Saatchi Talk managing director Chris Hides explained that furloughing has bought the agency time and allowed it to avoid having to make “heavy decisions” early on in the crisis.
“What furloughs enable us to do is keep those great people in the business,” he said.
“The whole message to those that haven't been furloughed is: ‘Let's double down, work hard, get the business practice such that we welcome all those people back.’”
Although the pair are unable to predict when exactly business in the UK is likely to return to anything near pre-COVID-19 levels, Boardman is optimistic that flat trading conditions are on the horizon, particularly in countries where lockdown restrictions have been eased.
She has observed that some clients have been “switching things on”.
“Particularly the global clients,” she added. “The UK is behind, but there are lots of countries in the world that need to get on, again. Global campaigns need to start up [in] consumer product areas.”
Yesterday, the pair struck a chord of optimism about their new merged agencies trading as M&C Saatchi Talk and with a new client proposition.