Why agencies can thrive during a recession

Recessions come and go, but when they hit, businesses tighten their belts.

They reassess what’s integral, and move from “business as usual” mode, to “survival” mode.

But unlike some other industries, agencies and freelancers have a unique opportunity in a recession. Employees are an ongoing expense, processes need to be automated, and integral software still needs support and maintenance - and agencies can help with all of that.

Now I’m not saying agencies are recession-proof, but I am saying that as other businesses adjust to economic changes - agencies can benefit.

Agencies can be more affordable 💸

When businesses are cutting costs, they often look to full-time employees as the first area to cut back on.  And agencies can be a cost-effective alternative.

And whilst agencies may cost more per hour that a full-time employee, that's only one aspect of affordability.

  • You only pay for the services you need (e.g. one project)
  • You only pay when you need them (e.g. X hours per month)
  • You don’t have to worry about benefits (sick leave, parental leave etc)
  • None of the other overhead costs that employees have (e.g. desk, computer, chair, office space)

And in terms of efficiency and bang for buck, agencies can often smash out more high quality work in a couple of months than a single experienced employee could do in 10 months.

Agencies have a wider range of skills 👨‍👩‍👦‍👦

Agencies usually have diverse skill sets as compared to employees.

Whilst everyone loves to think they have T-shaped skills (deep expertise in one area, and broad capabilities across many other areas), the truth is many employees are pretty I-shaped - meaning they just do one thing.

When you work with an agency, you have access to a team of professionals with different skills and specialties.

For example, one internal software developer may know backend development and maintain internal systems for a business. However, an agency could offer full-stack development, data warehousing experience, along with AI and ML experience.

This can be helpful when a business wants to get a specific project done quickly or wants to tap into new markets.

Agencies can automate manual processes 🛠

An economic downturn makes businesses think about where their money is going - and complicated manual processes or tedious human-dependant workflows are an ongoing cost.

In addition to providing cost savings and a wider range of skills, agencies can help businesses automate processes that would have previously needed human interaction. This is especially relevant if employees are a large cost to the business.

Internal tasks such as scheduling, data entry, and customer service can be automated with the help of custom software, potentially saving the business a lot of money.

Bonus: smart people are available for hire 👩‍💻

For agencies, finding great talent is one of the biggest issues, and in a recession there are often more people looking for work. Salaries may be cheaper, and the competition not be so fierce.

You obviously need to make the call about whether hiring now is a good decision for your agency, but if it is - it could be a good time to do it.


So even though the economy might be suffering a blow, your service business doesn’t have to.

Keep your sales and marketing going, make sure your existing client relationships are strong, and focus on doing what you do best - making awesome things.