Who's Going to Do the Work?
By Mike Carlton
During the Great Recession, US agencies shrank by 30,000 people.
The perspective of this is stunning! Almost one job in six disappeared. And, so did the talent that occupied those jobs. Talent now gone from the industry.
When you lay a chart on the decline in agency jobs against overall economy, you see an even more disturbing picture. The economy is slowly trending upward. So agency jobs are representing a declining share of the total economic pie.
The one bright spot is the growth of digital marketing jobs.
Around the World
And, the US is not alone. You can see the same pattern in the agency business throughout the world. And on the client and media sides, the attrition of advertising and marketing communications talent appears to be just as great. When you factor in the media, client and international picture there may be an overall advertising and market communications talent decline of as much as 300,000 to 400,000 people. Enough to populate a fair size city!
What makes matters even worse is who departed.
Some of the first to go were senior agency people. Professionals that were probably fairly expensive but may have been past their peak in productivity. Historically, these folks did much of the mentoring of younger agency staffers. They had the experience, the wisdom, and most importantly, the time to help young talent develop. The good ones believed in giving back to the next generation of agency professionals the skill gifts that they had received in their youth. While their mentoring contribution was not easily quantifiable, it was of incredible value.
There is hardly an accomplished agency professional who cannot point with appreciation and warmth to a senior mentor (or two) that years ago helped make his or her ultimate success possible.
Today’s best agency people usually had yesterday’s best mentors.
Now, the ranks of those unselfish mentors have been dramatically thinned. Almost to the point of oblivion.
The Other End of the Spectrum
Many of those with only a few years at agencies disappeared, too. They were not yet experienced enough to make significant client contributions. While they were not very expensive individually, collectively their cost was hard to justify. From a business need standpoint, they were just plain expendable. So, many departed.
And of course, with the exception of digital talent, almost no new entry level people were brought in. As a result, the advertising agency industry has disproportionately few professionals with less than ten years experience. Not only does this make it difficult to achieve staffing balance, it also means that an important generation of consumers is seriously underrepresented in agency thinking.
This generational gap will haunt agencies for decades to come!
There has been negligible entry hiring. Recruitment programs ceased. Relations with academia withered. So did internship programs. And with fewer young professionals left in agencies, training programs disappeared – all within sweeping cost reduction programs.
So, Who’s Left?
Agencies that made it through the past few years did so because of their mid-level professionals. These folks buckled down. They took on increasing work loads. They focused intently on moving billable work through their agency. And in doing so, they increased agency productivity dramatically.
But, at a heavy price.
Many have been so busy producing paying work that they have had little opportunity to learn new skills or to grow professionally. Indications are that the rate of mid-level burn-out is increasing sharply. A lot feel they have been laboring long in the trenches without much appreciation or hope of relief. Battle fatigue is rampant.
Worse yet, the advertising trade press reports that many feel the agency they work for has lost its way. And recent indicators show that more than half of mid-level agency people are unhappy with their current job. They will likely move as soon as they can find a better one. Mid-level staffing churn may be right around the corner.
Just what agencies don’t need right now.
A Complicating Factor
As if all of this isn’t bad enough, the market is rapidly changing. It is not just a traditional TV spot and print ad business any more. An exploding array of avenues has emerged for reaching and influencing consumers. Agencies must deal with much more than just the websites or product placement or PR or search, or event marketing or guerrilla tactics or social media, or promotions, or marketing automation, or experiential marketing, or, or, or….
It’s all of that, and more. It is becoming knowledgeable in marshalling all the ways a consumer can be touched. It is architecting the holistic communications solution.
Today’s agency can no longer just be able to play one or two instruments well. It must be able to lead an entire orchestra of different but harmonious instruments if it is to succeed in this challenging marketplace.
And with most mid-level agency professionals focused so intently on work in their individual area of expertise, few have had the time or opportunity to learn much about skillfully orchestrating complex integrated programs.
Many have been so busy cranking out stuff that they are ill equipped for the new opportunities facing them.
A 180 Degree Turn
It is said that business leaders always focus most intently on what their business lacks. And, for the past few years, agencies have lacked a growing revenue base to assure continuing profitability. Client spending stagnated or declined. And agencies had to shed costs.
So, the mantra was to control costs while struggling to increase revenue. A tough, largely defensive battle.
The good news is that client spending is growing again.
The bad news is that agencies may not have the talent to handle that growth.
So, to an industry that has had to spend the last few years reducing and realigning staff just to achieve basic profitability, we appear to be entering a period of serious talent upset and shortage.
What a stunning reversal!
Not Much Choice
As clients begin spending more as they raise the ante in share of market fights with their competitors, agencies face an interesting dilemma:
• Do they let clients divert work to other providers when the agency reaches its capacity with existing staff? This would clearly help replace some of the profits lost in the past few years. But, it would be relinquishing share of client spend to others.
• Or, do they protect their share of client spend by staffing up to handle that increased workload? This would be a less profitable approach. And would run smack into the question of where the necessary talent will come from.
Most agency leaders will probably come down on the side of protecting their share of client spend. But, if they do, it will quickly put sharp pressure on the very limited market for talent.
Supply and Demand
The economics here are simple. Agencies had become used to a market in which there was more talent than the industry needed. But the pendulum is quickly swinging the other way. We are now entering a period where there will be more demand for agency talent than is available.
Talent will be in short supply. That will not only force talent costs up, but the very scarcity of talent will constrain agency growth.
The New Imperative
For some time, many agencies have been able to treat the talent staffing issue with benign neglect. Those days are over.
Agencies without comprehensive strategies and programs for the identification, attraction, development, utilization and retention of talent will end up on the sidelines.
Remember, there are very few good people out there left to hire. And, current staff is probably restless. Agencies that lose the best people they now have will likely not be able to replace them quickly, easily or economically. And clients, with fresh money to spend, will probably not be very tolerant of agency talent disruptions.
Not a pretty picture.
Some Proactive Steps
Here are some things you might consider to keep this talent shortfall from negatively impacting your agency. This list is certainly not complete, but it can be a good start:
1. Face the Issue
A problem well defined is half solved. That old saying is absolutely true here. Giving the issues of talent identification, attraction, development, utilization and retention high priority on the agency’s business agenda is the first step. Only by doing that can an agency shift from a reactive mode to a proactive one.
2. Provide Management Attention
This is not the kind of challenge that can be put on auto-pilot. It must be driven from the top. This will require significant management time and attention. It will become as critical to an agency’s success as new business, and will demand the same level of intensity.
3. Reevaluate Your Business Model
The best people need variety in their work. Most are looking for continual intellectual challenge. They get bored quickly with repetitive tasks. A business model that is based on a high volume of similar projects can make it more difficult to attract and keep them.
4. Protect Your Best Talent
Identify those you absolutely do not want to lose. Then make sure that their psychic needs are met. Their financial needs, both immediate and long term, are important too. But don’t be fooled. If the psychic needs are not met, a fat pay check is usually only a temporary fix.
5. Adjust Your Staffing Model
It will be difficult to find experienced mid-level people. The good ones will be protected by their current agency. So, this means that an agency’s mid-level staffers must leverage their talents through the use of junior people. They will need to move from “doing” to “leading.”
6. Develop a Comprehensive Staffing Strategy
It is vital to be out in front of the talent shortage with a well thought out strategy. One that bonds the best people to you and generally anticipates future staffing needs. This can assure retention and a continuing flow of the right kind of candidates.
7. Embrace Employment Marketing
Just as agencies market themselves to prospective clients; it makes sense to begin systematically marketing the agency as a preferred place to work. This means creating a complete employment marketing program to prospective employees. This also reinforces commitments of existing staff.
8. Build a Prospective Talent Pool
Identify those people you would like to be in your agency well before you need them. Cultivate them. Just as you would cultivate prospective clients. Make sure that they know your feelings about them. Then, when the time is right, recruiting them becomes much easier.
9. Expect People to Grow
Grow or go is not a bad staffing philosophy. Good people want to grow professionally. You should expect them to want that. And, you should demand that they do, in fact, grow. In this kind of environment, the agency should provide the avenue for that growth. Fostering individual growth can be disruptive, but it is a key to building a dynamic talent base.
10. Revitalize the Mentoring Process
If you have people who are excellent mentors, celebrate them. If not, develop a program to encourage senior people to spend the time and effort necessary to mentor younger professionals. Allow them the time to do it, and reward them for it.
11. Return to School
Student interest in careers in advertising has declined. Establish, or reestablish, relationships with colleges and universities. Connect with faculty members. Seek opportunities to speak to students. Young people that you touch while they are in school can become your best talent of tomorrow.
12. Expand Internship Programs
An ongoing internship program is the easiest, least expensive way to develop a continuing flow of young talent. It gives you the opportunity to connect with a variety of tomorrow’s talent without long-term commitment on either side. An internship program can become the source of the best and brightest entry level people.
13. Encourage Staff Referrals
Your current staff can be the best source of new talent. Create an environment that encourages them to be missionaries for the values and opportunities of your agency. And then, reward them for referrals that lead to new hires.
14. Invest in Internal Staff Training
Much has been written in recent years about the benefits of becoming a learning organization. Develop ongoing programs for the entire staff that improves their knowledge and skill levels. These can be conducted early in the morning or after work. And the faculty can be the best of your own people or outside experts. The key is making this a part of the ongoing fabric of the agency’s culture.
15. Invest in External Staff Training
As Stephen Covey says, “Everybody needs to stop once in a while to sharpen the saw.” Getting your best people away from their work to expand their perspective and re-charge their batteries can play a major role is individual growth and talent retention. Good people are attracted to the agencies with the best continuing education programs.
16. Revisit Retirees
Lot’s of very talented agency professionals are retired. Some voluntarily. Some involuntarily. All have skills. And, many have retained their vitality and passion. Talk with them. They may be able to make significant contributions to your talent base.
17. Expand Outsourcing
Focus staff on your areas of core competency. For services outside that core, it makes sense to outsource. This can include everything from freelancers (who are getting a lot busier) to firms specializing in everything from complementary client services to agency back room operations. Engagements can range from casual assignments to ongoing relationships.
When you look at a list like this, it is easy to say, “I know we should be doing those things, but they take time and money that we don’t have right now.”
There is no question that the impending talent shortage is one more challenge that agencies don’t need. But, like it or not it is an issue that must be addressed.
Leo Burnett is reputed to have said, “The assets of this agency go down the elevator each night.”
You want to be sure those assets come back up the elevator the next morning.