How the web industry is coping in uncertain times

Whatever your political leaning may be, it’s hard to argue right now that we’re living in anything other than interesting times. The year 2016 served up two enormous helpings of the unthinkable. Firstly in the form of the referendum, which saw the UK vote by the narrowest of margins to leave the EU (read our Designer's Guide to Brexit article), and then later in the year when Americans chose Donald Trump as their president.

Spin forward to now and Trump is already teetering on the verge of impeachment, while in the UK there's been a snap general election that’s blown up right in the government’s face, leaving the country with a hung parliament and Brexit talks starting for real. 

The only certainty now – death and taxes aside – is uncertainty, and it’s perfectly natural to feel nervous in such a volatile world. And if you’re running your own web business or trying to get by as a freelancer, this feeling is only magnified. Prospects might look bleak, but are things really that bad?

We’ve been speaking to web professionals and studio heads to get a feeling for how the web industries are coping in these uncertain times, and here’s the good news: they’re broadly optimistic that things will work out. It might be a rough ride, but as players in a business where rapid evolution is the order of the day, they’re sure that they can adapt to whatever’s thrown at them in the coming years.

The negatives…

Which isn’t to say that everything’s fine. “The referendum itself and the election were hugely disruptive for a lot of our UK local government customers,” says Suraj Kika, CEO at Jadu. Fortunately this didn’t result in any cancelled projects; however it did result in delays that play out over months afterwards. “No one enjoys that kind of disruption,” says Kika.

Confusion about freedom of movement post-Brexit is another cause for concern. Alex Ellis is managing director of Delete, and employs numerous team members from outside the UK, both from Europe and further afield. “The uncertainty around freedom of movement and the effect that will have on them, as well as their family and friends, has understandably caused a lot of concern,” he tells us. “Bearing in mind the vast mix of countries that the talent within our industry in the UK comes from, this could have a bigger impact than is currently being discussed.”

The impact of Brexit on the value of the pound has naturally had a knock-on effect for businesses, particularly those who employ staff overseas. For Brown&co, an outsourced-model brand collective, this has already been an issue. “Many of our collaborators work and live elsewhere in the world,” explains co-founder Troy Wade. “With the weaker pound post-Brexit, we are having to pay them more than we were to match or beat their local earnings.”

There’s a similar story from Harry O’Connor, managing director at VoodooChilli Design. While most of his staff work out from the main office in Hereford, the company also works closely with talented people based around the world. These workers are paid in US dollars. “Brexit has slashed the value of the pound in relation to the dollar,” explains O’Connor,“ and remote staff are far more expensive than they used to be.”

… and the positives

Of course, the devalued pound can have its upsides as well as its downsides. “The service industry in the UK has got significantly cheaper for overseas clients with the drop in the pound,” reveals Ellis. “Soon after the Brexit decision, we saw clients in both Switzerland and Italy re-issuing briefs to us for a number of key projects that had previously been paused. From talking to our European clients, it is being seen as another advantage.” 

Ellis understands that this may only be a short- to medium-term advantage, but nevertheless it’s one to leverage while it’s there, and Delete isn’t the only agency to recognise this. 

O’Connor notes that VoodooChilli’s quotes to American clients have become far more competitive thanks to the weaker pound, and Wade points out another positive: that foreign clients are now seeing British agencies as a more attractive prospect. 

“We are completely set up for remote working (with collaborators and clients) so it really doesn’t matter where our clients are based,” he tells us. “Our two biggest are currently in the Netherlands and Turkey. Through a combination of our model and the weaker pound, they can now afford to work with a top drawer British firm.”

And it’s possible that Brexit could make life a little easier for anyone building the web; for Kika, it offers the opportunity to say goodbye to a thorn in a web developer’s side. “The Cookie Law, a piece of legislation that requires websites to get consent from visitors to store or retrieve any information on a computer, started as an EU Directive and was adopted by all EU countries,” he says. “Hopefully we’ll see that thing become part of the past!”

Preparing for the future

While it’s impossible to predict the future, it is at least possible to recognise potential dangers and adapt your business so that it’s ready for anything. Kika is rethinking how his company will grow across Europe, and anticipating the need for different financial processes for European customers and employees. 

But Jadu has been preparing for uncertainty in another way: “Two years ago we anticipated that things might start hitting the fan. We launched a cloud-based customer service platform called ‘CXM’ which focuses on helping customers connect to organisations that service them. Sort of a ‘digital concierge ’, CXM is real-time case management and instant messaging rolled into one.”

The success of CXM has led to a wholesale shift in Jadu’s business, seeing it becoming a cloud SaaS service provider and giving it an extra degree of diversity and versatility in the face of the unknown; an excellent survival strategy that’s already paying off.

Meanwhile Jon Davie, CEO at Zone has found that despite political and economic uncertainty, most things are carrying on as usual. When it comes to post-Brexit, however, he expects that Zone will have to put more effort into attracting and retaining digital talent.

“Anything that makes the UK a less attractive place to live and work is a risk,” he explains. “We’re already in a competitive market for the best people, and we’ll have to work even harder to find and keep our people happy.”

Ellis agrees that there’s a danger of talent leaving the UK, and Delete’s approach to managing this is more about prevention than adaptation. “In this industry your team is key,” he says, “and we are very proud of ours; my focus will be on ensuring we continue to invest strongly into our teams at an individual level to ensure that Delete, and the UK, continues to be the right place for them.”

Shall we get out of here?

After the EU referendum there was plenty of talk about getting out of Britain and moving to the EU, and in the financial sector that still appears to be a likely prospect. However, as far as the web is concerned, cooler heads seem to be prevailing. 

“For weeks after the result, I seriously contemplated leaving the country, which may have been a knee-jerk reaction,” says Adam Cowley, a small business director with seven years’ experience as a freelance web developer and technical lead. 

“In reality, as a freelancer you could be based anywhere in the world. Many UK companies currently outsource to non-EU countries, I don’t see why the EU would be any different. Luckily, countries – EU or otherwise – will always be looking for highly skilled, knowledgeable workers so the option is always there if things don’t work out well.”

Delete is taking a pragmatic approach and looks set to stay put: “Our three-year plans have not changed, so we are definitely not looking to relocate wholesale to the EU,” says Ellis. “We are continuously reviewing the market in the EU, including the number of leads we are receiving and growth of our existing clients, and will plan any physical presence in the EU around that.”

The advantage of the internet, of course, is that it doesn’t matter where you are, as Wade agrees. “Technology, if used correctly, allows many face-to-face meetings without anyone needing to be physically face-to-face,” he tells us. “It also means we can work seamlessly with collaborators in any country we choose, when the need arises, and without having to have an office there.”

Kira is thinking along similar lines. “We aren’t sure ‘offices’ in the traditional sense are where we are going,” he suggests, “rather we’re likely to invest in facilitating remote working regardless of location.”

Brexit: The endgame

There’s always the possibility, mind, that all this is just a big fuss over nothing. While Article 50 has been signed and the UK is on the road to leaving the EU, it’s not guaranteed that this will actually happen. This summer’s general election appears to have knocked the wind out the hard Brexit sails, and with a long process of negotiation ahead that no-one here seems to be ready for, who knows where we’ll end up?

Ellis is hopeful about what will happen. “Ultimately I believe it will result in a deal that works for the UK,” he says, “whatever that ends up being. The UK is not just going to shut up shop and the EU doesn’t want to crush us, so despite the twists and turns I am confident about the end result. Honestly, for me the riskiest part of this is the next two years, during the uncertainty of the process, rather than the end result.”

Not everyone shares Ellis’s optimistic outlook, though. “I can’t see a lot of good coming from it,” comments O’Connor. “I think long term, costs will go up for the average person in the UK, and businesses will need to charge more in order to make ends meet. I suspect prices will eventually be forced down for web designers.”

Cowley is also concerned about how Brexit may end up playing out, believing that negotiations will be difficult and we could end up leaving the single market in order to control the free movement of labour. “This could be damaging for the tech industry in the UK if the skilled labour isn’t available,” he notes. “When I recently helped with employing a full-time developer for a London-based company, the majority of applicants were non-UK.”

For now, though, we can’t be sure what will happen. “I think recent events have shown us that only a fool would try to predict what will happen next week,” says Davie, “never mind how the next two years will play out!”

Are we doomed?

With so much uncertainty, it’s easy to get caught up in doom-mongering. But really, is it worth it? From what we’ve been hearing, there’s plenty to be optimistic about. “I’m fundamentally optimistic about our business and the digital market generally,” says Jon Davie. “People with the skills to help clients adapt will be well placed to benefit from that disruption.”

O’Connor sees uncertainty as a great opportunity for anyone whose job is helping other businesses succeed. “Selling websites in uncertain times is like trying to sell water in a drought,” he points out, “It’s not a difficult sale!”

While he thinks the next few years will be up and down, Ellis thinks this situation is temporary. “The fact is that no matter what the future brings, to prosper you need to be positive,” he says, “and with an industry that is full of creativity, entrepreneurial spirit, talent and pure grit we will survive, and I believe thrive, throughout and beyond.”

Whatever happens, Wade is ready. “This is the new normal, ” he concludes, “and we’re excited about it.”

This article originally appeared in issue 296 of net magazine. Subscribe here.

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