Elastic Resourcing Model for Marketing Agencies


A new elastic resourcing model offers a solution for marketing agencies wanting to minimise risk as they push for growth.

Marketing agencies all over the UK face the same challenge. How to continue to satisfy their clients' requirements, produce great work, grow and maintain their margins - all at the same time?

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Elastic Resourcing Model for Marketing Agencies

Exploring the growth dilemma marketing agencies face every day

"I need you to create me a [insert some new, trendy, weird, yet wonderful thing here]" are words marketing agencies are hearing from their clients with increasing regularity. Fuelled by the speed of innovation in technology, clients are constantly looking to new and exciting ways to market their products and services.

Every new 'thing' a client must have, whatever it may be, poses an interesting challenge for any marketing agency. Get it right and everyone's happy. Get it wrong and it exposes a gap for another marketing agency or supplier to exploit.

This make or break gap created by the 'thing' is usually a result of resourcing. Does the agency have anyone on staff they can use to create/design/code/build/film it?

Marketing agencies have traditionally had two choices:

1) Increase headcount to close the skills gap

An ambitious agency would hire a new member of staff with the skills needed. This puts pressure on an already squeezed profit margin, and the result usually sees the agency increasing its minimum fees and having to get into extremely competitive pitches to win big-budget clients.

2) Specialise

A cautious agency would decline the 'thing' project and quickly double-down on the services they already provide. After a few iterations of this cycle, the result sees the integrated marketing agency becoming a specialist in media, or SEO, or creative.

Both of these are choices agencies are making everyday, but they are risky. Be bold but risk your margin. Be cautious but risk losing clients.

What if it didn't need to be that way? What if an agency could be ambitious without having to take a such a large gamble.

A new elastic resourcing method that adapts, expands and contracts according to demand is growing in popularity and it could be the solution.


A new elastic resourcing model

5 components of elastic resourcing

The model has 5 key components:

Benefits of the new elastic resourcing model

There a number of benefits to using the elastic resourcing model:

Manageable Growth

For most marketing agencies, there is a direct correlation between growth and headcount. The bigger you want to be, the more people you need. The risk comes from having to hire full-time salaries that take time to yield a profit.

full time hires take time to yield a profit

The benefit of using a TaaS (Talent as a Service), or on-demand freelancers, is you only pay when there is a project to offset the cost against. Another associated benefit is you can trial the project with a freelancer to prove the business case for hiring a full-timer.

freelancers prove business case for full-time hires

Speed

Hiring a full-time member of staff can take a long time, with senior hires often having 3 months notice to serve. The benefit of using on-demand freelancers is there is relatively no time lag between receiving a client brief and work starting.

Hard to find talent

The freelance marketplace also opens up access to the UK's hidden workforce. Being able to access a large community of professionals who freelance as a second job, or who are on maternity/paternity leave means it can be easier to reach hard to find talent.


Challenging the in-house model

Marketing agencies have used in-house staff for decades. If it isn't broken, why fix it?

To answer that question, let's look at three reasons why an agency might resist using the elastic model.

Myth 1 - We get better quality by using internal teams

An agency that limits itself to hiring people in a commutable distance from their physical location severely restricts their access to talented people. The UK is a big place, with an ambundance of talent who live more than a 90 minute commute from your offices.

location specific recruitment limits the acquisition of talent

Advances in cloud computing, file-sharing and video-conferencing have completely negated the need for a person to be in the same room as you to collaborate effectively.

And by using a freelance marketplace that focuses on vetted, trusted, quality freelancers from the UK, you remove some of the factors (language, time-differences, cultural understanding) that might affect quality.

Myth 2 - Freelancers are expensive

This is probably the most common objection to using freelancers. The reason being the squeeze on agency margins.

Whilst it's normally true a freelancer's day rate will be more than a traditional PAYE employees, an arbitrary comparison of day rates doesn't reflect true cost.

Let's look at an example of a mid-weight PHP developer:

Freelancer

Day rate: £350

Equipment cost: £0

NI contributions: £0

Downtime cost: £0

PAYE employee

Salary: £40,000

Equipment cost: £2,000

NI contributions: £4,000

Downtime cost: £8,000 (80% utilisation)

The freelancer offers the benefit of 100% utilisation, controllable costs and no hidden overheads such as equipment costs, holiday pay or sick leave. The PAYE employee may be cheaper day to day, but in this example, the permanent hire will cost £46,000 whether they are working on a project or not.

Myth 3 - Freelancers are transient

Talented professionals will gravitate to work they enjoy and feel valued doing. The only difference between PAYE staff and freelancers is the length of the notice period.

The solution in both scenarios is treat people well and pay them fairly for good work.

The advantage the freelance marketplace offers over traditional recruitment is the speed at which a replacement can be found.

Talent pool functionality, which allows you to group together freelancers based on skill and/or experience, makes the rehiring and repeat project process very quick and simple. For example, a client needs a new wordpress ecommerce site, just invite the 20 freelancers you have saved in your 'wordpress' talent pool.


How to get started with the elastic resourcing model

Moving from a traditional in-house resourcing model to an elastic resourcing model is, for want of another term, digital transformation.

As with any business change we'd recommend two things:

  1. Pilot it with a small project
  2. Talk to someone who can give you advice along the way

We've created our Pro service for this very reason. It's a managed service for businesses who are serious about working with freelancers but need a hand to get started.

Introducing Pro

Other Resources

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When is hiring a freelancer not the right decision?

A freelance marketplace recommending not to hire a freelancer might seem a bit strange. But it's true, there are instances where hiring a freelancer through a marketplace won't make sense.


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