As American business slowly gets into gear again following the September 11 terrorist attacks, PR insiders say it's still too early to predict how the industry's job market may
fare in the months ahead. But already, massive layoffs in the airline, hospitality and financial services sectors have affected some corporate PR departments.
Retailers are likely to take the next hit, according to Edie Fraser, president of DC-based Public Affairs Group, whose Best Practices in Corporate Communications division
monitors PR spending and staffing within a sizable chunk of the Fortune 500.
While it's likely that still more junior PR pros could be downsized as corporate communications departments in specific sectors further whittle their staffs, demand for senior
level PR practitioners remains high across the board. Bill Heyman, president of the NY-based recruiting firm Heyman Associates, says none of the executive level PR talent searches
in progress at his firm prior to September 11 was cancelled in the aftermath of the attacks.
"Right now I feel more positive about the job market for [senior] corporate communicators than I have all year," he says. "We saw a softening [of talent searches] in May, June
and July of this year, but in early August through September 11, we actually saw an uptick in the communications sector." Heyman's firm caters more heavily to client-side
appointments.
Budget cuts that came down earlier in the year put added pressure on those corporate PR execs who had managed to keep their jobs. "A lot of the work we're doing is 'upgrade'
assignments," Heyman explains.
"Maybe you're the head of internal communications now, but you are also going to be called on to write a speech and to talk to the media about the fact that you just laid off
20% of your workforce," he says.
While certain positions aren't being eliminated, incumbents in those are being held to higher standards -- or else replaced. The overarching competency that corporate PR execs
need most right now is the ability to facilitate healing on multiple fronts, Heyman adds. Corporate communicators are playing a critical role in addressing issues of employee
morale, productivity, investor confidence and community philanthropy.
In short, corporate PR staff are being stretched thinner than ever. According to the ninth annual Thomas L. Harris/Impulse Research survey of client spending, released two
weeks ago, corporations slashed their internal PR budgets by 40% in 2001. External PR budgets also fell 17% to $1.3 million this year, forcing a slew of agency layoffs, mostly in
the second quarter.
Some forecasters expect this trend to continue as corporations internalize even more PR programs in an effort to control costs in the face of a potential recession.
At present, agency staffers who specialize in employee communications, investor relations, crisis management and issues advertising are operating at full steam - providing much
needed counsel to clients who are wary of offending, or worse, appearing opportunistic in their post-disaster communications efforts. But where agencies are grossly lagging is in
revenues normally generated by "commodity PR" services such as product launches, media tours and other standard marketing communications programs. Few experts are willing to
predict how long such programs will remain in a state of limbo.
"The notion of launching a new product or mounting a new PR campaign right now is perhaps unwise and may even be [considered] in poor taste," says Peter Himler, managing
director, U.S. corporate financial practice at Burson Marsteller and president of the Publicity Club of New York. Most corporations are reticent about staging stunts and anything
remotely cute for fear of seeming insensitive, he says. The terrorist attacks have forced at least a temporary reconsideration of what constitutes "business as usual" in PR
circles.
What's certain is that agency stamina is being put to the test. "You've got a wait-and-see attitude among clients, which is creating total uncertainty for agencies in not
knowing whether they should be taking downsizing actions, or whether it's just a temporary lull," says Jack Bergen, president of the Council of PR Firms.
Prior to the disasters at the World Trade Center, Pentagon and in Pennsylvania, the Council was projecting agency growth of eight to nine percent for the remainder of 2001.
Bergen has since recast the figure around three percent. "That's slightly more than the GNP, which is at 1.7 percent" he says.
"The big question," says Bergen, "is whether we are still in the trauma of people focusing on the crisis, [or] something much more endemic to our businesses and to the economy,
in general. Layoffs are certainly a strong possibility for many PR agencies if more proactive efforts on the part of clients don't start up again soon."
Last week, the Council issued a survey to its members in an effort to plot the PR industry's movement on the road to recovery - both in terms of employee malaise and client
standstills. Bergen expects the survey to shed light on agency best practices (in areas such as grief counseling and staffing) that can be replicated.
Recognizing the potential for recession, the Council also hopes to provide its members with case study examples of companies that have successfully avoided (or minimized)
layoffs with alternative solutions such as employee furloughs, partially-paid sabbaticals, salary cuts and reduced profit projections.
"Everybody is hunkering down right now and that's a problem - not just for PR agencies, but for our economy and for business in general," says Bergen. "We're slow to get back
to work."
(Contacts: Jack Bergen, Council of PR Firms, 877/773-4767; Edie Fraser, Public Affairs Group/Best Practices in Corporate Communications, 202/466-8209; Bill Heyman, Heyman
Associates, 212/784-2717; Peter Himler, Burson Marsteller, 212/614-4082)
Getting Back to Business
Businesses may be slow to return to normal, but the American people are ready. A survey of 1,000 American adults on their attitudes toward marketing and corporate
communications shows that most consumers are ready for corporations to "move on":
80% consider it an emotional relief to see the return of programming, commercials and promotional events.
90% of respondents agree that companies should carry on with previously planned marketing efforts.
61% agree that it is appropriate for companies to communicate their position on the crisis, but 64% say they should not do so through their advertising or promotional
messages.
26% agree the Attack on America has changed the way companies should communicate with consumers. Companies should talk more about the community work they are doing and their
commitment to social responsibility.
55% agree companies should NOT change the way they communicate and should stick to talking about quality of products and services.
70% feel the overall tone of company communications should be hopeful and optimistic.
Source: StrategyOne poll conducted Sept. 18-21, 2001
(Contact Steve Lombardo, 212/642-7742, [email protected])