Corporate Communications Cuts: How To Reverse The Trend

While, we haven’t seen any surveys or reports that put it in terms of numbers, we have certainly heard plenty of first-hand accounts that “big company” corporate communications cuts are still happening, even though in many industries, The Great Recession is in the rear view mirror.

We are still hearing stories of reductions in already slashed in-house staffs, further agency cuts and even additional (asinine) “no more local PR firms” edicts being issued. All signs point to just one fact – communications just isn’t that important to many large corporations.

There are multiple factors that have led to this state of affairs. Both in-house and agency cultures are to blame. For example, for too long, many corporate communications departments included some people who frankly didn’t need to receive a full time salary, benefits and stock options for doing what were basically part-time jobs. And on the agency side, too many agencies were billing large monthly fees that were really too large while throwing more bodies on corporate clients than were really necessary, just to rack up the bills. Corporate clients often paid hundreds of thousands upon hundreds thousands of dollars for “big” agencies to prepare binder-held reports that helped preserve both in-house and agency job security. With these bloated efforts, is it any wonder that PR has often been “the first to be cut?”

Another huge factor is that, as far as we know, corporate reputation is seldom, if ever, a measuring stick for executive success. Top executives get compensated for “hitting numbers,” typically short-term financial goals. So if communications can’t show up in “the numbers,” executives generally don’t place a priority on it (unless it’s a “crisis” that could cost them a job).

In order for budgets to stabilize, increasingly shrinking corporate communications departments and their increasingly endangered agencies need to be smart, not greedy. They need to operate efficiently with nimble, accountable models.

But, in order for this trend to be reversed, it has to start in the boardroom. What if CEOs were judged by their boards on corporate reputation? Not executive positioning per se, but long-term image building of the company. Why shouldn’t they? Wouldn’t that, all of a sudden, place a premium on communications?