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
2. Provide Management Attention
3. Reevaluate Your Business Model
4. Protect Your Best Talent
5. Adjust Your Staffing Model
6. Develop a Comprehensive Staffing Strategy
7. Embrace Employment Marketing
8. Build a Prospective Talent Pool
9. Expect People to Grow
10. Revitalize the Mentoring Process
11. Return to School
12. Expand Internship Programs
13. Encourage Staff Referrals
14. Invest in Internal Staff Training
15. Invest in External Staff Training
16. Revisit Retirees
17. Expand Outsourcing
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.