LONDON — PR agency leaders in every region of the world expect increased profitability over the next 12 months, despite prevailing economic and geopolitical conditions and the ongoing talent crisis, according to the World PR Report.

The 2022-2023 report, by the International Communications Consultancy Organisation (ICCO) in partnership with Sapio Research and PRovoke Media, gives a snapshot of the global PR landscape, revealing the issues, trends, and opportunities for agencies across seven regions: Africa, Asia Pacific, Europe, Latin America, the Middle East, North America, and the UK.

The PR leaders, directors and agency owners who took part in the survey had the same level of optimism about the growth of the market as in 2021: on a 10-point scale, the global average was again 7.3. Respondents in North America (8.2), Latin America (7.9) and Asia Pacific (7.8) were the most confident, while in the UK, there was markedly less optimism, with an average score of 6.6 out of 10, and Europe a little higher at 6.9.

When asked on the same scale to what extent they agreed with the statement that ‘I expect an increase in agency profitability this year’, the score was a global average of 7.0, up from 6.7 in last year’s report. Again, when broken down by regions, North America was the most bullish, with a score of 8.0, alongside Latin America at 7.7. Respondents from the UK were again by far the least optimistic here, with a score of 6.4.

The findings also point to more companies paying closer attention to corporate purpose (a score of 7.2 up from 6.9 last year) and CEOs taking corporate reputation more seriously (a score of 7.3 compared to 6.9 in 2021). Looking at the decade ahead, ‘strategic consulting’ and ‘purpose and ESG’ sit well ahead of the list of skills that will be required by PR professionals around the world.

Notably, ESG is in the top two investment areas for every region of the world, with 44% overall saying they were expecting increased spend, up from 32% last year. In second place was influencer relations, with 36% saying they expected additional spend, up from 29% last year, and in third place was strategic consulting, up to 30% from 25% last year.

There was also an interesting shift on ethics, with many more PR agencies saying they have turned down work for ethical reasons this year: 76% compared with 66% in 2021. The top ethical challenges for PR professionals were pressure from clients, misinformation, a lack of consequences for unethical clients and financial pressure.

The World PR Report – which features theProvoke Media Global 250 Agency Ranking – again found that retaining key talent is the number one challenge as it was in 2021, with this issue especially pronounced in APAC and Africa regions, followed by motivating younger staff and developing junior staff.

ICCO president Grzegorz Szczepanski said: “The importance of PR professionals is being increasingly recognised, as organisations and leaders face greater scrutiny from a more discerning public. To meet this high demand and growing range of services, it’s crucial for agencies to invest time and energy into creating an environment that fosters both professional and personal growth. Otherwise, we’re at risk of watching premier talent exit our industry.”

Looking at the talent trends in the report, Reuben Sinclair co-founder Rohan Shah said: “The last two years have led a lot of individuals to reevaluate what they want from their job and from life; it would seem that now more than ever a focus on personal priorities comes before work. Employers embracing a radical level of flexibility by allowing employees to fulfil their personal priorities and commitments whilst working are the ones likely to overcome the retention challenge, as well as being more attractive to talent seeking work or considering options.

“Employees want to be seen as people, not just workers; value is more than a benefits package, people want a person first understanding. If you are to truly overcome the retention challenge, you must start by understanding your employee personas and deliver accordingly.”

In terms of talent, the picture was also mixed around mental health and DE&I. Only 48% of global PR firms offer formal mental health and wellbeing support to staff, dipping to 29% in Eastern Europe and rising to 76% in North America, but there was a 12% increase of respondents reporting to have had experienced a mental health issue compared to 2021. The UK, Latin America and the US rank the highest in reported experiences of poor mental health, and a quarter of agencies still don’t have a mental health policy in place.

On diversity, the report reveals that just 30% of the respondents believe the industry reflects the ethnic demographics of the countries they serve. However, steps are being taken to improve this: 79% of agencies globally now have a diversity and inclusion policy, compared to 55% in 2021.

Commenting on the diversity aspects of the report, The Purpose Room founder Sudha Singh questioned whether the industry has made real progress, or if all the DEI announcements over the past couple of years have been largely performative. She said: “The statistics are disappointing and should be taken as a wake up call by leaders – numbers on their own are not going to help us remove inequalities, hiring diverse talent on its own is not the magic fix.

“Research and anecdotal evidence indicates that progress has by and large stalled, that organisations have focused on the quick wins to be seen to be on the right side of history and public opinion. There has been distinct effort on increasing diverse hires, on numbers but missing out the equity and inclusion piece by a long mile. All this because organisations have not factored in the financial commment, manpower and time required for real change.

However, Singh said the survey results were not all negative: “It is not all doom and gloom, there is heightened awareness about inequalities faced by marginalised groups. The other positive trend is that 18% of those surveyed have introduced measurement this year. This has been the big missing piece – without measurement there can be no accountability and it would be difficult to discern the impact of any initiatives. For change to be substantive and sustainable, we need more organisations to embed measurement into the design of their DEI programmes.”

The report also included a look a measurement metrics, and there was a little positive change in this area: engagement metrics were cited the most requested client measurement method, ahead of media clippings for the first time globally. Use and awareness of AMEC tools has also increased since 2021, with 20% of respondents now using the tools frequently.

However, Richard Bagnall, co-managing partner at Carma and past-president of AMEC, remains frustrated: “The research shows that the top three client objectives are improving corporate reputation, increasing sales and building brand purpose. Yet when we come to look at the metrics that agencies are providing, none of the top five speak to these simple business objectives.

“Engagement metrics, media clips, AVEs, sentiment analysis and media summaries do not demonstrate how comms supports and drives reputation, increases sales or builds brand purpose. They are all metrics that point to activity, not effectiveness. It’s only when we get to the lowly sixth and below positions that we see any attempt to link outputs to outcomes – with web traffic, awareness, business results, advocacy and sales all listed.

“This is a wake up call. It is time to lean in and take action. For comms to remain relevant it has to start demonstrating how its work supports organisational objectives. It has to go beyond the ‘counts and amounts’ of activity driven metrics and point to the value it creates.”