Barkers: strategic restructure to follow 90-day consultation

Barkers has announced a root-and-branch strategic review of its business against a background of a year-on-year decline in revenues of between 25-30% over the last five months.  While a major restructure was already planned for 2009, tough trading conditions have accelerated the timetable.  In addition to achieving savings in personnel costs and other overheads, the review's objectives will include re-shaping the business model to reflect the fundamental changes taking place in employment marketing and communications.  "Cost reduction is a key objective," says Barkers' managing director Andrew Platt-Higgins, "but the focus is equally on reflecting clients' changed points of entry and transaction patterns in a model that will introduce new roles and changed team structures."

Every part of the business will come under the spotlight during the review process, and every one of the 440 jobs in the firm will be at risk.  The intention is to streamline the way business is transacted with clients, moving away from a structure of different units in different silos, to a cohesive, flexible business operating at strategic level with clients, establishing more purchase points, and reducing the cost of delivery across all product streams.  While 75% of business in some locations derives from digital and resourcing activity, some parts of Barkers are still set up around the delivery of traditional advertising services.  Management has been planning for some time to address the anomaly.

Rather than making quick decisions, the agency has elected to enter a 90-day consultation period with staff.  The reasons are twofold: first, it will allow time for the most thorough analysis and reorganisation possible; and secondly, during the period in question, the results of a number of pitches and reviews are due, which could affect key decisions.  In the last few weeks, wins at BAe Systems, Nestlé, John Lewis Partnership and within the LBRP network have shown that growth is still possible in today's climate.  And while there may still be difficult times ahead, new resourcing contracts with income in excess £200K were secured last week alone.

There are of course many questions that remain to be answered.  How will the destiny of massive reviews such as Lloyds Bank (decision imminent) affect Barkers and, for that matter, all the other interested players?  How quickly is the inevitable shift of public-sector recruitment advertising from press to online going to happen?  Would an incoming Tory administration be more concerned with the £12bn of recruitment costs incurred by the public sector with REC members than the £700m spent on recruitment marketing?

One vision of the future suggests that in five years time, some of what Barkers does will be very similar to what it has done for nearly two centuries, namely broadcasting lots of different announcements at low cost to generate response.  These minor transactions will lead to an online environment where candidate will engage with employer on a richer basis.  Where brand ware will be deployed, reputations built and examined, and relationships developed.  The work will be clever, digital, creative, and rewarding.  It will call for people who can write, people who can design and, above all, people with brains.  And it will be radically different to what most of us have known during our working lives.

We are grateful to Barkers and especially managing director Andrew Platt-Higgins for a frank report of what's going on and a promise of regular updates.  We will of course keep you posted.