Digital and design agencies are increasingly being asked to carry out work for free, according to a new survey that suggests that small and medium-sized industries are feeling squeezed by economic pressures.

The Design Industry Voices survey reveals that smaller private sector firms feel that clients’ demands have increased since budget cuts in the public sector have come in. “Producing creative work for free during pitches means agencies are giving away their most valuable commodity: their intellectual property,” says Stef Brown, MD of On Pointe Marketing. “I can’t think of any other professional services business where this is tolerated or even considered an option.”

85% of respondents say that clients currently expect more work for less money, and that over seven in 10 clients now expect more work in pitches without payment.

82% say that client budgets have been reduced, which may reflect the fact that job losses in the public sector have been catastrophic: the latest UK figures show a loss of 67,000. And whilst private sector jobs have risen according to the same figures, the Design Industry Voices survey shows that over half of agencies are employing fewer permanent staff and using more freelancers.

Respondents to the survey say they are feeling the effects of a slow, stuttering economic recovery. “Digital and design agencies appear to be running on empty,” says Rachel Fairley, MD of Fairley & Associates. “Staff have disengaged; they are overworked, undervalued, and fed up of poor leadership.”

Under 20% of people working in digital and design agencies feel that their agency is performing ‘very well’ when it comes to ‘helping employees to manage stress’, ‘rewarding people for going the extra mile’, and ‘providing appropriate workload for staffing levels.

The survey was conducted by Fairley & Associates, Gabriele Skelton, and On Pointe Marketing.