‘The challenge they face is employing staff, and even finding those staff.
‘If an agency employs someone new to the industry, then significant training is required and that means putting an experienced seller at least partially into a training role.’
Davies says that if agencies take on inexperienced staff the profit will drop.
So, a better financial model may be to charge higher fees on reduced volumes – keep the overheads down, reduce risk and make more money.
‘The most efficient way really is to focus on the key clients, the ones that really appreciate the effort being put in and are prepared to pay professional rates for that service.’
He says that while a lot of attention has been paid to the reduction of front-end commissions, businesses are also facing reduced over-rides and pressure at the back end of the business.
‘We are hearing that clients in most cases will pay fees for the work businesses are doing, so it is really a matter of the sector being confident to charge rates that compensate them for their knowledge, skills, and extremely high service levels.
‘There is no point working 12 hours a day, six days a week if you are not making a good return on that effort.’
