Almost 90% of digital and design agencies believe their clients now expect more work for less money, according to a new survey.

The Design Industry Voices report, which interviewed 500 agency staff, found that 80% said client budgets have been reduced and more than two-thirds (70%) said clients expect more work in pitches for free.

The survey by Fairley & Associates, Gabriele Skelton and On Pointe Marketing is now in its fourth year and suggests that digital and design agencies are feeling the squeeze as a result of the economic downturn.

This is despite the fact that the Econsultancy and Experian Marketing Budgets 2012 Report showed increasing levels of investment across a range of digital channels and disciplines.

According to the Econsultancy research, based on a survey of more than 500 companies and agencies, more than two-thirds (68%) planned to increase their digital budgets for 2012, compared to 45% of companies increasing overall marketing budgets.

Three-quarters (74%) of companies were investing more in digital marketing technology in 2012, up from 67% who expressed similar intent in 2011.

The Design Industry Voices report also suggests that agencies are experiencing a huge turnover in staff and relying heavily on freelancers.

Almost two thirds of respondents said they are employing fewer permanent staff (61%), using more freelancers (66%) and more than two fifths are using more unpaid interns (41%).

Furthermore, more than half (59%) of staff intend to change job in the next twelve months, while more than a third (34%) have been with their agency less than a year.

But the reliance on freelancers isn’t necessarily bad news for the workforce. Separate research from Boox shows that the average wage for freelancers is £50,820 per year; almost double the national average wage of £26,093.

Just over one in five (22%) freelancers earn less than £20,000 per annum and one in three (31%) earn £50,000 or more per year.

However, across the board earnings for freelancers are mostly staying the same or decreasing, with marketing, PR and advertising proving to be among the most polarised industries in terms of pay.

The report shows that while around 40% of marketers saw their pay decrease in 2012, just under a third (31%) saw their wages rise. This suggests it is an industry undergoing a number of changes, which is why fewer freelancers have seen their wages remain static compared to other sectors.

The report also asked what motivated respondents to go freelance. Overall 4% said it was because they were struggling to find work, but this jumps more than fivefold to 22% for PR/marketing/advertising practitioners.

ICM’s data comes from a survey of 1,000 UK freelancers and contractors between 25 and 27 September 2012.

So, does this fit with your experience of working at an agency or as a freelancer? Let us know in the comments section.