Two years out from the Great Resignation’s peak, finding and retaining top talent remains a significant challenge for leaders. And while C-suite executives across a range of industries are losing sleep over staffing difficulties, those in the marketing industry are likely feeling particularly restless: The number of professionals working in advertising decreased by 14% between 2019 and 2022, and over half of US marketers feel the industry is experiencing its worst-ever talent crisis.
As agency leaders know well, high turnover can be a significant expense. Estimates place the cost of replacing a lost employee around one-half to two times their annual salary, and it can take up to two years for a new hire to become fully productive in their role. As such, agencies should strive to create workplace cultures that better retain top talent, even amidst the many other challenges they face.
To implement effective systems and strategies for retaining talent, it’s important to understand the factors contributing to high rates of turnover in the advertising industry. While there are many, the general theme is that working in advertising is growing more and more difficult: Most agency professionals feel that digital advertising has gotten harder over the past two years, and 70% feel their job is harder now than it was two years ago. Among entry- to mid-level employees, that number jumps to 75%.
Considering this, agency leaders looking to retain talent must first understand why agency work has gotten more difficult of late, and then find ways to help their employees feel supported and fulfilled amidst this increased difficulty.
The increasingly difficult nature of agency work stems largely from the many challenges facing advertising agencies today.
To start, there’s the growing complexity of the media landscape. “We’ve seen a resurgence of fragmentation in the industry—take streaming services and retail media networks, for example,” says Michael Olson, EVP of Client Development at Basis Technologies. “At the same time, agencies are scrambling to figure out how they can bring unique partnerships and inventory sources to the forefront to show that they’re still power players in the industry.”
On top of media fragmentation, agencies are grappling with increased rates from media partners, decreased client budgets, and the rising cost of talent, all of which have resulted in shrinking margins. To cope, agencies are increasingly offshoring and outsourcing work to drive down costs, and can even end up overselling and underbidding to keep their businesses afloat. Unfortunately, these financial pressures and the strategies agencies are using to protect their margins are also adding to the rising difficulty of work for agency professionals.
The many challenges agencies have grappled with in recent years have trickled down to their employees, making their daily tasks more difficult and less fulfilling, and reducing the quality of workplace culture at agencies.
A fragmented media landscape means that agency professionals are more likely to get bogged down juggling many different media channels and inventory sources. Over half of agency professionals’ tech stacks consist of six or more tools, with 17% of agency marketers using 10+ tools to manage campaigns. As a result, more than 25% of those same marketers name siloed and disconnected systems as a pressing challenge. Many teams wind up doing repetitive tasks to connect these disparate systems—for example, manually standardizing and unifying data sets from multiple sources. “They’re stuck working off of antiquated software, juggling spreadsheets, and doing data entry work that’s completely unfulfilling,” says Olson.
And even as outsourcing certain types of work can free up agency employees to focus on more strategic and fulfilling tasks, it can add additional complexity as well. “It's not as simple as reassigning tasks to external teams and completely removing them from the internal team’s plate” says Kelly Boyle, Group VP of Client Strategy and Insights at Basis Technologies. “The internal agency team still needs to oversee and QA the outsourced work. And when you have teams working in silos, and possibly vastly different time zones, there can be breakdowns in communication and context that create complexity.”
In an effort to land clients in a highly competitive landscape, some agencies can also end up overselling and underbidding. While it may lead to new business, the practice can leave employees overextended and stretched thin. One VP-level agency veteran shared that “High workloads have a huge impact on workers’ mental health—I’ve worked at agencies where I’d see at least one of my coworkers crying on a weekly basis.”
Finally, the rise of remote work—and subsequent return-to-office orders—has exacerbated many of these challenges, with agencies often struggling to establish strong workplace cultures in this new hybrid/remote-first environment. At the same time, many employees bristled at their agencies return-to-office mandates: In 2023, employees working at agencies with return-to-office mandates were 40% more likely to be looking for new jobs and 96% more likely to be at risk of burnout than their remote peers.
Luckily for agency leaders, there are strategies that can mitigate these challenges by fostering more fulfillment for employees. In meeting their teams’ desire for appreciation, efficiency, flexibility, and opportunities for growth, leaders can create workplace environments where employees want to stay for the long haul.
According to Gallup, appreciation and recognition “might be one of the greatest missed opportunities” for driving performance, engagement, and company loyalty amongst employees. Despite the impact of appreciation, Gallup’s survey found that it’s common for workers to feel that their best efforts are regularly ignored. Even more, workers who don’t get the appreciation and recognition they feel they deserve are twice as likely to say they’ll quit their jobs within the next year. Agencies that take the time to acknowledge their employees’ work and demonstrate their appreciation can have an easier time holding on to their top performers and keep morale high.
“People are willing to go above and beyond in their work, especially when they feel like that work is appreciated,” says Boyle. “It can be as simple as saying, ‘I know you’ve been putting in a lot of hours lately, and I really appreciate it.’”
Research indicates that the most effective way to recognize employees’ contributions is to provide positive honest, authentic, and individualized feedback, and for managers to show appreciation for their workers at least every seven days. Better still is when praise comes from “every direction”—i.e., from their manager, from their manager’s manager, from their peers, and from high-level leaders as well.
Perhaps the best thing about showing appreciation: It’s free of charge. In creating team cultures rich with appreciation and praise, agency leaders can ensure their teams feel seen and celebrated for the difficult work they’re doing.
Agencies must also ensure they’re providing work environments that are both efficient and conducive to their employees’ best efforts. For example, to bolster efficiency, leaders can set regular check-ins with clients to get clear on what deliverables are necessary.
“Agency leaders should take a step back and ensure employees are focusing their effort on things that deliver value for their clients,” says Boyle. “It’s easy to get caught in the cycle of providing the same reports and deliverables without truly understanding if they’re being utilized to their full extent.”
Leaders can also foster efficiency for their teams by building their tech stacks with employees in mind—for example, investing in CDPs that facilitate the collection, standardization, and usage of first-party data, or in automation technologies that streamline processes and reduce manual labor. These tools not only save time and create more efficiency for agency workers, but also free them up to focus on more strategic, creative, and fulfilling tasks.
Finally, agencies must find ways to meet employees’ desire for more conducive work policies—especially younger employees’. Take Gen Z workers, who now make up a significant portion of junior-level employees, and who many marketing organizations it particularly difficult to retain. With 78% of Gen Zers reporting that sustainable work-life balance is critical to their career success and 42% saying that they would quit a job if it caused burnout or lacked work-life balance, it makes sense that agencies are struggling to maintain workers of this generation, as agency work has historically lacked that balance. And it isn’t just Gen Z: Workers of all demographics are increasingly valuing work-life balance and flexible hours. To acquire and retain top talent, leaders must find ways to meet these needs—for example, by offering flexible work hours and remote work options.
Overall, in prioritizing efficiency and creating workplaces that work for their employees, agency leaders can meet the needs of the marketers of today.
Lastly, agencies must find creative ways to offer their employees opportunities for professional growth. Mentorship is particularly valued by Gen Z, so setting up programs to match junior-level employees with senior colleagues is one way agency leaders can foster growth. This can also give senior-level employees the opportunity to feel they’re having an impact in their work—which goes a long way, given that burnout isn’t always a result of employees having too much work, but can also occur when employees feel they aren’t having enough impact.
Giving people opportunities to become subject matter experts is another powerful way to offer both professional growth and professional impact, according to Molly Marshall, Client Strategy and Insights Partner at Basis Technologies. “Team members can become experts on specific types of clients, or specific types of audiences,” says Marshall. “Becoming a subject matter expert gives employees another way in which they can feel special and needed—it’s something they can take pride in and even talk about with their families and friends.”
Of course, agencies must offer career advancement through more traditional routes like promotions as well, but finding other unique ways to make team members feel that there are many opportunities for growth and advancement at their jobs can further counteract some of the difficulties agency workers face today.
Given the ongoing talent crunch and high costs of attrition, adopting strategies that serve to improve talent retention must be a top priority for agency leaders. In setting up systems that provide agency workers with regular praise and appreciation, adjusting their workplaces in service of efficiency and employee preferences, and developing a variety of ways for employees to grow, agency leaders can create the kinds of businesses where people want to stay for the long term.
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Want to learn more about how agency professionals feel about their jobs, their industry, and the trends shaping digital advertising today? Check out our 2024 Advertising Agency Report for all the top takeaways from our survey of agency professionals across the US.
