Why talent moves from agencies to tech platforms and startups | Advertising
A rise in demand for technology talent, particularly in the areas of data, e-commerce and analytics, has led to an exodus of talent from networks and agencies to consultancies, platforms and startups. Attracted by significantly higher salaries, attractive stock options and the chance to work on game-changing technologies, talent is jumping ship at an increasing rate, say agency leaders and executive search firms .
In turn, agencies have limited options to match or exceed the packages offered by these attractive compensation packages. Instead, they must manage high turnover rates.
This is a challenge that has been in the works for a few months now – our Agency Report Card reports showed several agencies struggling with increased revenue, especially for tech talent. For instance, DDB reported revenue doubled in Malaysia and reached 51% in China. DDB executives revealed in a review call that China, particularly Shanghai, is among the world’s most expensive for talent, even as it continues to expand its workforce there.
Driven by digital transformation
“The digital transformation that so many companies are currently obsessed with has certainly exacerbated the problem for the marketing services industry,” admits Gordon Domlija, CEO of Wavemaker Asia-Pacific. “Companies are looking for immediate solutions in the tech space, fearful of falling behind their competitors in this process.”
Gordon Domlija, wave maker
The challenge for agency executives such as Domlija is that the tech talent pool is limited, and this hiring spree has greatly inflated talent salaries, often unjustifiably, sources say. Country spoken for this story. People with limited experience can receive hugely inflated salaries as companies look for specific skills to fill positions, they add.
The challenge for agencies is finding expertise broad enough to go beyond the purely technical and tactical needs of marketers, says Richard Frampton, Managing Director, Strategic Solutions, Publicis Groupe North Asia. Then there’s the challenge of being able to provide an environment and culture that works for top tech talent.
Richard Frampton, Publicis
The challenge for networks and agencies is that they’ve often nurtured these talents in-house and invested both time and money to nurture them through the ranks, to see them jump on the best deal on the table. . “It’s a market that favors talent over their employers,” said a marketing manager at a Chinese tech platform that transitioned from an advertising network. “When I wanted to make a change, I had at least three other offers on the table.”
This person isn’t the only one ditching the legacy of old ad networks for the thrills and potential riches of the tech industry. According to six HR consultants and people leaders Country spoken, major vendors and consultants, ranging from TCS, Accenture Song, to platforms such as Meta, Snap and Twitter, are all hiring agency talent.
Then, until recently, a boom in the startup scene provided new opportunities for talent across adland. In the last Forrester and WFA survey in partnership with Country40% of respondents said martech/adtech skills were the third most in-demand skill set, after digital commerce/e-commerce (57%) and data analysis and reporting (50% ).
“It’s no longer a battle for talent between media and creative agencies and for the best people in Malaysia or APAC,” says Prashant Kumar, CEO of Accenture-owned Entropia. “Now there is a battle for the best tech talent globally.”
Industry leaders said Country that this surge in demand for tech talent has been precipitated over the past two years as agencies saw their fortunes plummet with Covid and in contrast, tech company business boomed.
“(Executives) tell us that the capabilities brands and advertisers need today to reach and engage consumers to drive their business growth are in high demand,” said Helen Duffy, the company’s APAC CEO. Grace Blue Executive Recruitment Company. “These can be skills in digital businesses and e-commerce, martech and adtech, data science and emerging technologies.”
A change of pace and level
While the initial rush saw people from different organizational levels move in, hiring more recently has been more measured and focused on junior roles, ranging from planners to senior executives. They tend to look to tech companies of all sizes to work on the advertising side of the business focusing on agency sales. Some staff are also applying for marketing and business development positions.
According to HR and business leaders, it’s hard to keep top talent attached to companies, even when they pay competitive salaries and offer substantial benefits. People may be keen to make the most of the changing dynamics in the industry, which may not last more than a few years.
Helen Duffy, Grace Blue
Duffy adds that career trajectories may have changed in the pandemic for tech talent. “We observed how The big resignation was truly a “Great Recalibration”. More than two years of disruption and uncertainty have at times left people feeling drained and exhausted,” she says. “Talents questioned real values and authenticity and re-evaluated their employers based on human values versus income.
Resolve work-life imbalance
According to the senior tech platform executive quoted above, their workday was about 25-30% shorter after leaving an agency network. “You don’t have all the distractions that come with agencies and clients when you leave an agency,” they said. “It makes your professional life more orderly, even if it’s a little boring after the rush and chaos of agency life.”
Xiaofeng Wang, principal analyst at Forrester, said Country: “Our investigation found that middle managers have the strongest intention to leave their current job within the next two years. (As many as) 50% said they are very likely to leave, compared to just 16% of managers/business leaders who say so.”
Xiaofeng Wang, Forrester
People who leave are jumping not only because of the deep pockets of tech companies, but also because agencies “have short arms,” says Wavemaker’s Domlija. “I mean, how can we compete with unlimited all-day buffets, gym memberships, daycare, and spa sessions? If you’ve only ever known agency life, some of the benefits (real and perceived) the platform or customer side can bring that feels more like a Club Med than a workplace.”
So how can adland fight back, and should he? According to Entropia’s Kumar, networks and agencies need to protect their best talent with sandboxes, giving them access to the latest technologies and solutions and eliminating roles that take them away from the bureaucracy of agency life to let them focus on innovation.
While agencies often don’t have the financial wherewithal to compete on compensation with big tech platforms and consulting firms, they could try to build deeper relationships with their teams, empower them (and) share the successes of their organization. “It’s something that established technology platforms and consultants often can’t offer,” says Grace Blue’s Duffy.
What talent shortage?
At Publicis China, people leaders have avoided major spikes in staff turnover, Frampton says. The network has done this by incorporating technology specialists into its business teams. “We don’t fight on the basis of compensation alone,” he says. “We win based on … our opportunities beyond narrow business lines and our exposure to winning brands.”
Much of this posturing is moot, according to some industry leaders, as this pandemic-driven rush for tech talent may be cooling off. In fact, technology companies of all sizes, ranging from startups to large platforms such as netflix globally and Ali Baba in China, may experience their own growing pains.
On the other hand, networks such as WPP and Publiciswhich has lost a slew of talent over the last two or three years to these tech companies, may have regained some of its lost luster (and talent) as the reality of operating in a more normal installs.
(This article was first published on www.CampaignAsia.com)