The death of the design agency?
Or, why the future of design is moving towards in-house design departments
A quick search on Linkedin shows a trend at tech giants: More and more designers are working at in-house design departments.
Nowadays, there are more than 7 thousand designers at Apple, 6 thousand at Amazon, 2 thousand at Facebook and 6 thousand at Google. (LinkedIn data)
This trend towards in-house design is also confirmed by job opening numbers. In 2015, I studied the job market for designers in the UK by analysing 1.406 job ads for graphic designers (see more about this study here, here and here. One of the things I did was to classify whether the job ad was for a design agency or an in-house department.
The number of jobs for in-house designers was almost three times bigger than for design consultancies: 903 in-house design positions versus 363 design agencies positions (plus 140 positions that did not specify who was the company behind the position).
Why is this happening? Why are these tech giants and so many other companies opting to have designers internally, instead of simply outsourcing the function to a design agency?
This all comes to one point:
Design is too important to be done outside
As design grows its importance from a peripheral competency to a central one, designers are brought to work inside the company.
This makes a lot of sense. Companies do not usually outsource their main work. For example, an IT company have a lot of developers internally, while outsourcing other functions, such as accounting, law, etc. Essential functions in a company are brought internally.
Following the Danish Design Ladder — a model to evaluate the level of design adoption in a company — design aims to grow from simply styling a product or service to be a fundamental part that contributes to the business.
As more and more companies are aiming to move design up in this ladder, the need for bringing designers internally will grow.
For example, companies having design only as ‘form-giving’ might be fine in not having designers internally. But I doubt that companies using design as a strategy will not have at least one person internally managing the design function.
A tip for designers looking for a job: try to find out how many designers there are in the company. If many, this means that design is an established function internally. If only a few, maybe your work will be to build the idea that design is essential internally.
Coming back to my initial question, does this means the death of the design agency?
No
Design agencies are competent and able to tackle complex projects. Because agencies usually have multiple clients, design agencies have a more broad experience and expertise to offer. Companies can buy their services and get the expertise of multiple designers.
Also, smaller companies and/or companies with no dedicated budget for design can save some resources by outsourcing the design function.
A summary of the advantages/disadvantages of in-house and design consultancies was presented by Betina Von Stamm.
But…
As more and more companies have in-house designers, it is inevitable that (1) some of the work is going to be done by the in-house team and (2) design agencies and in-house designers will have to work together.
#1 In-house designers will take some of the work
Companies which are having designers internally, do need to outsource ALL the design work.
This in a way will allow design agencies to focus on more ‘special’ projects. Design agencies are usually hired because companies want an outsider take or expertise they do not have internally.
Von Stamm (picture above) and other authors (here) have repeatedly said that design agencies are good in creating new concepts, exactly because they are not tied to the daily routines and culture.
It’s easier to ‘think outside the box’ when you are not inside the box.
As a result, some of the projects will be done internally, while some will be done externally, or in collaboration (next topic).
#2 Design agencies will have to master collaboration with in-house designers.
There is a power/ego relationship that needs to be properly managed. For example, the in-house designers might feel neglected if suddenly the company they work is taking care of their job.
As said before, design agencies bring external expertise that sometimes is not found internally. They bring ‘fresh’ ideas that challenge the status quo of the companies.
But when it comes to execution, in-house designers know a lot about the company, the culture, the practices/routines, etc. In other words, they know how to get the job done at the company.
That’s why I think the collaboration (and respect) is key to good projects. Design agencies and in-house designers have complementary knowledge that can only benefit the project to be done.
To summarise:
- Design is evolving from only taking care of visual aspects to be more present in being part of business and strategy discussions.
- Having designers internally is a sign that the company cares about design.
- Design agencies will not die, but they will have fewer projects and will have to collaborate with in-house designers to improve design projects’ success.
If you are interested in knowing more about how design is becoming more strategic, let me suggest two readings:
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