Advertising agencies ask ‘where are all the people?’ in the battle of talents

French marketing genius Jacques Séguéla had his tongue in cheek when he titled his book “Don’t tell my mom I’m in advertising. . . she thinks I play the piano in a brothel”. However, more than 40 years later, the difficulties encountered by advertising companies in attracting and retaining their staff are no laughing matter.

In one of the tightest labor markets in modern history, advertising is another industry struggling with recruitment. Employers in the sector asked “where are all the people? said Helen Kimber, managing director of The Longhouse London, a headhunter. “‘Extraordinary’ is the best encapsulation of it,” she added.

Recent results from several major ad groups show how competition for talent has weighed on results. Although different companies have different ways of measuring it, the trend of increasing payroll is clear.

Personnel expenses reached 3.89 billion euros in the first half of 2022 at Publicis, the French parent company of Saatchi & Saatchi and Starcom, a rise of 14% year-on-year at constant exchange rates. Personnel costs totaled £3.93bn at WPP, the London-listed owner of Wunderman Thompson and Ogilvy, an increase of 9% on the same currency-adjusted basis.

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At Interpublic, the US conglomerate behind McCann and MullenLowe, salaries and related expenses rose 10% during the period to $3.15 billion. Sir Martin Sorrell’s digital-focused advertising firm S4 Capital issued a profit warning in July, citing hiring and staffing costs.

“The good – and the bad – news is that our employees are very talented, which means they are always in demand externally. [the company]”said WPP chief executive Mark Read.

Payroll expenses rose in part because of additional freelancers and staffing agencies that hired to capitalize on a resurgence in client demand for advertising from the depths of the coronavirus pandemic.

The offices of the Leo Burnett advertising agency in London, part of the Publicis group
Recent results from several major ad groups show that competition for talent has weighed on results © Chris Batson/Alamy

Despite growing concerns about a recession, they continued to recruit over the summer: in New York, according to the US Bureau of Labor Statistics, the number of people employed by the industry in July passed a peak pre-pandemic to reach a record high of 85,700 on a seasonal basis. fitted base.

Although new hires have been busy – higher incomes have accompanied the increase in the workforce – in several companies, labor costs have exceeded sales.

At Publicis, they fell from 64.4% of revenues in the first half of 2021 to 66.2% this year. About two-thirds of employees received at least one raise in the past year, and 35% had several. Since the start of 2022, 35,000 people have received a bonus and 43% of the workforce another base salary increase.

Wage inflation has been notable recently in the US, UK and India, said chief financial officer Michel-Alain Proch.

Sir Martin Sorrell said Brexit had made recruitment in the UK “more difficult” © Chris J. Ratcliffe/Bloomberg

All told, double-digit annual percentage wage increases have not been unusual for some advertising workers in recent months.

Even so, recruiters say, agencies still lack the creative talent they need to brainstorm and execute on ideas, account managers to delight clients, and techies to track results and run digital campaigns.

Many of the recent recruiting challenges in advertising will be familiar to other white-collar employers: some workers have needed time off to recover from Covid-19, while those looking to change their lifestyle have retired early or reduced their working hours.

Staff turnover has long been high in a sector dependent on young employees with a few years of experience. Yet, since the start of the pandemic, these workers have been particularly difficult to find. In London, which rivals New York to be the global advertising hub, Brexit-related visa complications have added to the pressure.

“No doubt Brexit has made things more difficult, but not just for our industry,” said Sorrell, whose company S4 has only a small minority of its staff in the UK. “While we are looking for talent in London, it has been difficult.”

However, in an interview last week, he added: “The economic problems the UK is having are so serious. . . that is about to change.

The worst staffing shortages have eased in several markets in recent weeks, according to executives and workers on the ground.

Zoe Ellaby, a University of Edinburgh graduate who works for east London-based agency Mother, said she receives about one message from a recruiter on social media every week, or about the half of what a few months ago.

Sorrell said while the recruitment pressure was “still there” in digital advertising, it was “not as intense” as it was a few months ago as employers became cautious about the global economy.

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Some analysts have said that despite recent shortages, ad companies may need to join tech companies and lay off workers — as they did quickly at the start of the pandemic — if a downturn sets in.

Last month, social media group Snap announced plans to cut a fifth of its workforce largely due to a slowdown in digital advertising. Facebook and other tech employers have also cut their hiring plans.

Whatever the short-term trends, however, some in the publicity say the disruption caused by the pandemic has only exacerbated deeper employment issues for agencies. Old fault lines between advertising and other industries have blurred as technology has replaced traditional media, giving staff more options to work elsewhere than in rival agencies or client marketing departments.

Silicon Valley is not the only source of competition for workers: the consulting firm Accenture, for example, has created data-driven marketing services.

“So many skills in our industry are now transferable,” said Victoria Livingstone, human resources director for Europe, Middle East and Africa at Japan-based Dentsu, the world’s fifth-largest advertising group. “In the past, if you lost employees, you lost them to direct competitors. Replacing people wasn’t the challenge it is now,’ she said, though she added that it also meant ad agencies had a bigger pool of talent to draw from. .

Advertising has never paid as well as investment banking, consulting, or commercial law, but it has long appealed to graduates who aspire to work in a creative environment.

Increasingly, however, other careers promise similar lifestyles, as well as higher salaries. At the same time, according to some elders, advertising has become less glamorous than during its 20th century heyday.

Today’s advertising professionals are more likely to produce short video clips for sites like YouTube – which viewers tend to view as a nuisance – or targeted marketing emails aimed at generating immediate sales. , rather than imagining big-budget products building ads seen by a large portion of the population.

“It’s not a particularly pleasant job for the people doing it now,” said Bruce Daisley, a former Twitter executive and work culture writer. “It’s become much more tactical, performance-based. Advertisers are obsessed with showing that a particular ad works [by generating sales] rather than necessarily evoking a sense of the brand.

“The heyday of great advertising creativity – where there were iconic TV ads that everyone was talking about – is over.”

Industry leaders dispute this characterization. While linear broadcasting and other traditional media had indeed “lost ground”, Sorrell said, the idea that digital, in particular, lacked appeal was “nonsense”. To claim that advertising was less fun than it used to be was “looking at the past through rose-tinted glasses”, he said, calling digital advertising a “sexy” career option.

Yet, in an industry where workloads can be grueling, moving online has also brought pressure for measurable results.

“The industry relies on a lot of ‘hope workers’: young people coming in agree to work crazy hours, don’t talk about certain things like bullying or whatever,” Sammi said. Ferhaoui, account manager at the Havas agency.

Many entry-level salaries barely equaled a living wage, especially after recent inflation, added Ferhaoui, who was speaking in his capacity as co-founder of Creative Communications Workers, a union for employees in the sector.

Advertising workers have other complaints. Managers report that they are increasingly likely to disapprove of certain types of work, such as for oil and gas customers.

About two-thirds of industry respondents to a investigation by the World Federation of Advertisers and MediaSense endorsed the proposition that young people leaving advertising found greater “purpose” in other industries.

Lack of training and career structure were also among the main factors in dropping out, according to the study published in July.

“There was an industry complacency around attracting talent as people wanted to come and work in advertising because it was perceived as cool,” Dentsu’s Livingstone added. “As a result, there was less emphasis on offering a structured career development proposition.”

In addition to improving salaries, agencies are doing their best to address these concerns. Along with a series of initiatives to improve diversity, they also offer more flexible working, generous parental leave and workplace benefits. WPP gave its 109,000 employees a company-wide vacation in July, from Thursday evening 7 to Tuesday morning 12.

And despite all its recent recruiting challenges, advertising’s place at the heart of consumer capitalism helps give it lasting appeal as a career.

“Advertising gives you the ability to react to everything that’s happening in the culture, in a way that other industries don’t,” Ellaby said.

Marilyn J. Hernandez