Whatever happened to agency land's brightest and best?
There is a simple explanation for the current talent shortage at agencies: the agencies got rid of too many people at the start of the pandemic and are now struggling to service with the post-lockdown boom.
Most of these people haven’t been sitting around and waiting for good times to roll back again but instead, have gone off and found new employment.
But there’s also a more complex story to tell because managing an agency is not easy. Agencies are the canary in the coal mine when it comes to economic conditions. And at the start of the pandemic they did the same as they did in 2009 during the financial crisis, slash jobs.
Watching large client businesses preparing to cut spend, they started cutting their own overheads. And at an agency that means people, tens of thousands of them across the global industry.
You could argue that on both occasions the pressure of quarterly reporting forced the holding companies to put the needs of the stock market ahead of those of their marketer clients. Navigating the gap between quarterly returns for shareholders and long-term value for clients is tough.
In any case, the consequences this time around are that churn rates are now up in the 30% range and we estimate that open positions are currently at more than 20% across the industry.
There are some agencies that didn’t take this path. In the US, Horizon Media said it wasn’t going to lose people and having seen them recently in a number of different pitches, it seems they are not suffering like others. It may have been able to take a different path possibly because it is independent.
Most marketers are now having to deal with a stretched agency resource – it’s been a very busy pitch year as well – staff are tired and at risk of burning out.
With talent so important for business advantage, markers need to adopt strategies that ensure they have the right people working on their account.
If you are an incumbent with an existing relationship then you have to protect your access to the best talent that currently works on your account. You need to do everything you can to inspire and motivate because talent can move between accounts.
If you pay for resources on a fee basis then you have some leverage over the agency. Ask for a resource plan, look at ways to lock that talent in and behave like a priority client with great briefs, treat your team like strategic partners. Make sure your scope of work is relevant and up to date and that your team’s skills reflect it.
Additionally, if there are gaps in the resource make sure you’re not paying for them and pressure the agency to fill those gaps so that the rest of the team don’t have their workloads pushed to the limit.
If you are currently going through a pitch, then there are serious questions to ask. Interrogate the resource plan being presented by the competing agencies. Know who would be in place on day one. In some cases, it’s just 20% of proposed staffing on the day of transition.
Ask what's the plan of action to fill those posts because quality can quickly be diluted with less experienced staff and the first 30-90 days could set the talent level for the rest of the relationship.
The final marketer challenge in the talent arena is to look at how the current salary increases are being handled. With reports that some people are getting 200-300% rises as the battle for the best intensifies, marketers need to be aware of who is paying for these increases.
Agencies should also be aware that the more their costs rise, the more competitive and attractive the in-housing option will become to marketers.