Over 800,000 creative sector workers face redundancy as the industry shifts towards ‘outsourcing’

Over 800,000 workers in the UK creative sector are at risk of redundancy as businesses shift to ‘outsourcing’

In the UK creative sector, over 1.75 million full time equivalent jobs are supported, across marketing, advertising, and the events industry. With half of previously furloughed staff in the UK now returned to work, either part-time or full time, this puts more than 800,000 jobs at risk of redundancy in coming months: comments David Blackburn of

Current research shows that 46% of companies previously employing in-house marketing teams are now planning to outsource their marketing needs, rather than retain staff currently on furlough. The sector employs more than 1.75 million staff across marketing, advertising and event sectors. With consumer confidence at an all time low, and businesses stalled since lockdown, British businesses are struggling to regain pre-Covid business levels.

In both B2B and B2C sectors, approximately 89% of marketers admit to reviewing and delaying their market spends for the remainder of 2020 and into 2021, with over 80% having paused a new product or service launch for the foreseeable future. As a result, with revenues diminished, end users are cutting back on ‘in-house’ skills and ‘out-sourcing’ as the new normal, on a ‘when required’ basis. With agency staff also be moving from furlough with the consequences of diminished requirement in-agency, ending up on the jobs market with little hope of re-employment, the real fear is the UK will create a ‘talent mountain’.

The consumer-facing marketing sector has been hardest hit with 44% of all staff being made redundant and 57% of marketers have had their roles scaled back in some form or another, whereas the B2B sector has seen 25% redundancies as well as 64% of roles changing in some way.

David Blackburn, founder of Marketing Quotes comments, “We work with over 30,000 creatives in the UK. As consumer and business confidence continues to suffer B2B and B2C marketers are being hit equally hard, with 69% in both sectors reporting a slackening of demand for their brands’ products and services. With commercial TV advertising revenues slumping by 50% in the months of June and July, the potential outcome will be a ‘talent-mountain’ which may see marketers exiting the industry for good.”

Written by: David Blackburn, founder of Marketing Quotes, providing businesses with FIVE Agency Quotes for FREE. E: W:

*Source information – / Econsultancy / Marketing Quotes / BBC

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What to tell employees if you’re insolvent

No business wants to find itself insolvent, unable to pay its debts and with its future in doubt, it can be a stressful time for everyone involved. If your business does become insolvent, you should aim to keep your employees as well informed on what is going on as possible. There will be a level of anxiety in your workforce as they think about their future. As your employer, you should help them understand the situation while not giving them false hope.

Remember their rights

Even if the company is insolvent, in the hands of an insolvency practitioner, undergoing a recovery procedure or closing through liquidation, your employees maintain their legal rights for the procedure’s duration, and if you have to dismiss them.

If for example, you liquidate the company, employees can still claim wage arrears (up to eight weeks’ worth from the Redundancy Payments Office), holiday pay (unpaid, or up to six weeks), any unpaid pension contributions, and pay in lieu of notice.

If you have to make employees redundant, you’ll have to give them a period of notice before dismissing them. That period of notice is either specified in their employment contracts or the minimum statutory notice period, whichever is longest.

Know what insolvency procedure you’re going through

Once the directors have engaged a licensed insolvency practitioner, they will determine which insolvency procedure would provide the best outcome for the business. They will take the company’s circumstances into account, what the directors want, and what you can realistically do with the company.

In the UK, the insolvency practitioner may recommend the following procedures:

Company Voluntary Arrangement (CVA) – A CVA is an arrangement in which the company pays a set monthly amount to the insolvency practitioner, who distributes it to the creditors. This procedure may be a viable option if the company structure has the potential to succeed if unencumbered by its debts. Employees may not even notice the effects of a CVA, as trading can continue uninterrupted. However, their jobs could be in a precarious position as the directors will still be looking to save money where they can.

Administration – In an administration, a third-party takes control of the company and will make the necessary savings with less input from the directors. There could be an increased risk of redundancies, as parts of the business deemed unprofitable are likely to be cut to make the savings required to stay operational. A lender who has a debenture over a client, which is effectively a floating charge over various assets such as stock, raw materials or fixtures and fittings, can also in some scenarios place that said company into administration, if the charge covers the majority of the company assets.

Creditors’ Voluntary Liquidation (CVL) – If the directors can’t see a future in the company, they can apply for a CVL to close it voluntarily. The assets are sold, and all staff will be made redundant. Subsequently, they can claim redundancy payment and other entitlements. In most circumstances, the bulk of the money gained from the selling off will go to the creditors, who will want the highest return possible.

Compulsory Liquidation – Where a CVL is a voluntary procedure chosen by a director or insolvency practitioner to liquidate the company, Compulsory Liquidation is forced on the company when a creditor applies for a winding-up petition. The company’s bank accounts are frozen, the closure would be instant, and the directors will have no control over what happens next.

Whatever procedure the company is going through, you should keep your staff informed of their intricacies and potential impacts. Doing so will clear up some confusion and help them decide what to do next.

Avoid overpromising

While it may be tempting to offer reassurance to concerned employees, you should temper what you say to restore confidence. It would help if you always kept your employees informed as to what they’re legally entitled to. What you should avoid is providing false hope of recovery, promise them job security, or additional benefits you wish you could, but might not physically be able to provide for them. Though employees may react badly to negative news, most of them would rather be prepared for the worst-case scenario than be caught off guard while expecting everything to sort itself out.

Make sensible savings

A benefit of applying for a CVA, is directors retain some control of the business and any potential cost-cutting. While it’s still not a pleasant job deciding which employees need laying off or which departments need disbanding, and you’ll have to remain as objective as possible, you’ll at least have control over the process.

While admitting that your company can’t pay its debts isn’t a pleasant prospect in any sense, it’s your responsibility as a director to act in the company’s best interests. Your employees will look to you, or the HR department for answers, and not deciding on the process best for your business could result in more damaging consequences.


When a company becomes insolvent, you can help minimise your staff’s anxieties by keeping them well informed as to what the company is going through, and how the directors intend to rectify the situation. You should also remind them of their rights if they’re made redundant and what payments to which they’re entitled. When deciding which departments and staff you can afford to keep in the most difficult times, remain objective and keep the business’ best interest at the forefront of your decisions.