The other day CNBC’s Storyboard had an interesting debate on ‘Talent Management in the Advertising Industry’. Based on the Deloitte Rewards Survey (conducted among 15 agencies) the debate covered a topic that has long been touted by the captains of the advertising industry as the ‘most important challenge’: attracting and retaining the best talent. Unfortunately, it has remained just that – a challenge, for quite some time now. What I liked about the show was the plain-speak of the participants, the variety of issues touched upon and the interesting nuggets of information. Here is Part 1 (26MB) of the show:
Click here for Part 2 (26MB) and Part 3 (16MB).
Some of the points emerging from the survey (not entirely unknown to the industry) and discussed on the show are worth repeating:
– this is one of the lowest paid industries compared to other ‘progressive’ industries like, FMCG or IT/IT Services
– the salaries at entry levels are really low; it shoots up at the top resulting in a huge gap
– the HR departments among the surveyed agencies are not ‘competent enough’; they don’t get the support of the CEO or second in line; they don’t have processes in place
– designations are invented resulting in artificial levels; roles are not clearly defined
– poor compensation from clients results in profitability squeeze which in turn affects the ability to hire the best talent
All valid and worth debating. More importantly, worth finding solutions for. The issue isn’t simple and there are wheels within wheels, with many interconnected problems. My $0.02 on this and related issues:
The crux of the problem is how agencies are positioned in the clients’ minds: as trusted, long term business partners or as vendors of a service. Over the years, consultants and other specialists have come to be valued more by clients on strategic inputs compared to ad agencies who are seen as script developers. Client’s are not going to up the fee if they don’t see added value. And agencies can provide added value only if they have talented, motivated, trained people on board. Which costs money. Agencies too have brought this situation upon themselves through under-cutting rival agencies, displaying total lack of unity and not elevating the client-agency equation to that of a partnership. In order to simply get a business, many agencies have agreed to low commissions and retainer fees. It leads to a cyclical effect of being unable to service the business with good people who value-add.
Irrespective of the squeezed margins, the fact is most agencies don’t have processes & systems in place. When a fresh recruit joins, it is very rare that he or she is put through the paces in terms of a structured training. It may happen to batch recruits from a B-School but when someone with say, 2-3 years experience joins an agency in the middle of the year he is most likely to be thrown straight into the job. There is hardly any effort made to convey the agency’s philosophy & culture to a new recruit in a structured manner. If there is a credentials presentation he is likely to go through it on his own. This is only an indication of the lack of processes and how everything is people dependent in most agencies.
As an aside, I asked for thoughts on this issue on Twitter and got some interesting responses:
The sentiments expressed here – low pay at entry levels, lack of succession planning, training are pretty much echoed in the Deloitte survey too. Clearly, there are deeper, far reaching issues which is perhaps fodder for another post.
Would love to have your comments.
Related posts from my blog archives:
Agency compensation: the eternal dilemma
Speculative pitches: whose idea is it anyway?
Is it time for agency creative & media to sit together again?
Advertising agency and fear of clients
insightful article and as an industry insider… very very true.
It’s the same thing over and over again. Agencies undercutting each other and clients not seeing value. I think its about time we cleaned up our act and started behaving like the true value creators that we are.
Ad industry bodies are fighting over petty things like who voted against who at award ceremonies instead of focussing on the core of the business.
Thanks for the article!
Remove the creative part of this post, the rest is true for PR agencies too!
Consider the following :
1. Is it a problem caused by the cult of personality that stunts the growth of an organisation and its culture ?
2. Leading with Knowledge – As companies require more specialised services, the agencies need to consider are they leading with knowledge or simply reacting to situations?
3. People first – agencies perhaps need to consider how they are supporting their teams across all touchpoints – internal and client facing.
4. One question I would ask – Have all these associations with global advertising networks helped or hurt? To undertake a transformation, Would it be better to be independent at this stage ?
1) CEO / Head of an organisation plays an important role..if he thinks d way he worked or been recruited was right..he will always throw that down the line.
2) If CEO/head is fine with new concepts then do these HR guys really know what they are getting into & what exactly they have to do when they join this industry ..i mean apart from arranging party's and all. If it, then why don't they do it.
3) If actually HR people really understand the talent required then are there any proper systems made for them (by this industry) to find that ..apart from ref's & PR
4) If we say referring is the best way then ask people on what basis they refer…personal relationship or talent ?
5) Sahi main Personal relationship sometime get you the one you want but then who decides the money factor…?? how it is decided?? PR ya fir the actual talent ?
6) Chalo actual talent gets d money but then what about the talented people we already have..fine can't give them money but what about the growth ??
7) WHO CARES . If they move out…will find more.
There was a time when my salary didn’t come in for 5 months straight.
Then there was a time when something I had worked on wasn’t even looked at, despite having worked on it for 5 days straight.
As narcissistic and juvenile as it sounds, I think the latter situation (as often as it has occurred) has made me want to quit more than anything else.
Quite enjoy your blog, and hope that it fosters at least a little bit of debate in the circles that matter. Well, at least for those who read it.
Why simply advertising alone, if you consider that the essence of most businesses can be boiled down to two things; ideas and people, and perhaps, managing people with ideas. I have this vague notion (my opinion, entirely) that we don't fully understand ideas in advertising yet.
Some might say that we cannot even articulate what a good idea is. Which is a fair comment to a certain extent, but that merits another post, a discussion for another day. But it does explain why we see so much of work we don't particularly like. This is important, because great ideas inspire people to join the industry in the first place. In some ways, it is a bit of a vicious circle and inextricably related to the problems of managing talent.
Importantly, it explains what someone in the comments has termed as the "rise of personalities". Remember, it is these very same leaders who are not only able to clearly articulate & develop ideas, but also inspire the rest of us to strive just a little bit harder. Personally, I don't believe that is the problem at hand. You only need a little bit of honesty and an opportunity to work with some of these giants, to understand how ideas work.
Which brings me to the second bit, managing people (indulge my lack of brevity). It is an unfortunate reality that we are seeing a more ruthless world today. One that places a greater premium on sharper elbows over sharper ideas. Look no further than the celebration of a ruthless characterisation of James Bond, Sherlock Holmes in his modern Guy Ritchie avatar, and the likes of a certain John Terry. Remember managers, chief executives, makers of men, this is the world that your children, and your children's children will inherit. There is no escaping that reality.
This excellent article in the Financial Express talks about similar issues; http://bit.ly/ds9KXG If you do read it, you may be start believing that managers need to start growing up a little bit in India Inc. Not a bad thing at all, if you accept the argument we've still got a lot of space to grow as a "market" and hopefully, develop as a society.
Thanks for the comment, Harshal. Sorry about the delayed response. ‘premium on sharper elbows over sharper ideas’ is so true of our business. Wonder if that’s what it takes ahead in life – ironic given that this is an ideas business. Some refer to ad folks as ‘snake oil salesmen in shiny suits’ – not surprisingly.
Not at all. Particularly enjoyed this post, because it speaks of a glaring issue that is increasingly being ignored. Is there simply a lack of management talent (we are churning out more management graduates than before) or do we simply lack the will to change?
I could drive an analogy with the road traffic situation in India; notice how we ruthlessly cut lanes in a bid to ‘get ahead’, or the peculiar sort of nonsense that takes place at traffic signals.
Another topical metaphor lies in football, (soccer if you must). Where success lies in expertise and teamwork. No amount of aggression can substitute for great strategy & game play. Cricket doesn’t foster this kind of thinking, incidentally. It tends to glorify individual brilliance. Nor do some of the more popular sports being broadcast (tennis, F1, anyone? Arguable). Notably, the amount of money does not necessarily translate into success.
So that nullifies the arguments against the personality-driven ethos of the funny business that is communications, as well as, the commensurate salaries argument.
The truth is management is hard work. One needs to actually manage. That’s what we get paid to do. Manage expectations, talent, excellence in craft, the list is frankly endless. But one thing is clear, it is a full time job. No half measures here. Creativity does follow a certain logic. Understanding that takes work. Even the seemingly unimportant little stuff, like written briefs, presenting creative solutions, understanding the problems at hand, and how to go about solving them.
If you will allow for it, here is another lovely article via the WSJ that talks of Jose Mourinho, maybe there is something there, particularly in the bit about, “inspirational quality that makes people run through barbed wire to please him” http://bit.ly/cEjW7V (sounds a lot like excellence in craft, doesn’t it?)
I have a slightly different perspective. Are we really in talent business? Are we really in skill business? Well a part of our business may still be in that business, but we more and more are into process business! At least that how clients see it, and pay for. We squandered the currency of ideas long ago. Forget the real work, even on supposedly award work lack of ideas is so clearly visible. If formula is all we will be driven by, than we will continue to do this debate. Just look at research as an industry. They moved the needle. They are in knowledge business, and they treat their business like that. And get paid for it!