External concerns, including customer disruption and sales/earnings issues, have overtaken workplace issues as the biggest communications challenges facing corporates, according to the second wave of global PR industry research carried out by PRovoke Media, ICCO, APACD and research platform Stickybeak last week. 

The study, which attracted 289 responses from across the globe, finds some specific changes in attitudes compared to the first wave of the survey, which took place one month ago. All of the results can be viewed via the interactive slides in this story, where specific questions can also be filtered according to region.

Most notably, customer disruption is selected as one of the top three communications challenges by 55% of in-house respondents, overtaking workplace disruption which drops to third spot with 43% of respondents. Sales/earnings also overtakes workplace disruption, according to 45% of respondents, up from 37% one month ago.

The results suggest that workplace concerns are perhaps less pressing than they were one month ago. Having managed the switch to remote working, corporates now appear more focused on external challenges, including the customer and economic fallout from the Covid-19 pandemic.

Similarly, travel/movement restrictions have declined in importance to 26% versus 41% one month ago. However, employees remain the top stakeholder priority for in-house communicators, according to 55% of respondents, compared to 56% one month ago.

"What’s clear from the results is that both in-house teams and agencies are flexing and changing to meet the challenges of the situation in their market or markets," said Stickybeak founder and PR industry veteran David Brain. "We’ve gone from the focus on how we work as teams together and the setting up of new management and communication systems, to handling the fallout from the commercial disruptions and the changed consumer and stakeholder expectations and behaviours."

Budgets & business

The focus on business fallout is further demonstrated when it comes to in-house communications budgets. While a similar proportion (45%) expect their spend to hold steady over the next year, 45% now expect a decrease, and 26% predict a large decrease, compared to 35% and 11%, respectively, one month ago.

On the agency side, attitudes are broadly unchanged regarding the bleak economic impact of Covid-19, reflecting a welcome stabilization, if nothing else. 74% of agency respondents expect a loss of earnings, compared to 77% one month ago. 

A slightly lower proportion (58%) report a hiring freeze but, worryingly, there is more support this time for pay cuts (42% vs 36%) and layoffs (33% vs 27%). The same proportion (16%) expect increased business from clients, even as 39% report that clients are increasing agency work in response to the pandemic.

Encouragingly, only 34% of clients are less likely to use external counsel during the Covid-19 crisis, compared to 43% in March. And 55% are keeping their external counsel activity at the same level, compared to 45% previously.

"Reassuringly, 55% of clients are keeping their external counsel activity at the same level," said ICCO president Nitin Mantri. "But let’s be prepared: PR firms are likely to lose more clients if the crisis continues for a few more months. However, crisis and corporate comms and public affairs are the three areas that will continue to be in demand. In the coming months, we just have to be humane, agile, resilient, and adaptable for our clients and aim for business-as-usual as far as possible."

So far, according to agency respondents, the downturn continues to result mostly in delayed/cancelled campaigns (80%). However, agencies are seeing more retainer reductions (56% vs 44% in March), and payment delays (41% vs 32%). 

When it comes to specific services that clients are seeking, there is more divergence between in-house and agency than was apparent one month ago, even if results within in each respondent group are broadly similar. For example, agencies select crisis communications (78%) and corporate comms (65%) as the top two services clients are seeking from them right now, ahead of employee engagement (45%).

On the corporate side, "none" remains the top choice, but the proportion choosing this increases from 33% to 40%. Crisis counsel drops out of the top three altogether, replaced by public affairs and regulatory support (22%), alongside corporate communications in second place (29%).

Unsurprisingly, consumer/brand marketing remains the hardest hit sector. 79% of agencies and 44% of in-house respondents made it the most popular choice under services that are being reduced. 

"What was clear from the first wave of research was the strategic role the industry was playing for businesses under sudden and immense strain and change," said Brain. "What is clear from this wave is that the industry has flexed again to the 'new normal’ and in some markets is leading the return to demand generation and the reviving of markets and businesses."