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Agency

Agency culture is broken, and how to fix it.

The average staff turnover for marketing agencies is around 30%. That’s ~3 years if you’re on par. One of the worst-performing industries for staff retention. Something isn’t working.

I’m a big fan of Mad Men. I take every opportunity to channel my inner Don Draper. Minus the wit or casual misogyny.

The image of agencies defined by parties, heavy drinking and everything else that goes with it, is not far off the mark. For a modern twist, just add meditation.

The thinking behind such benefits is that they attract and retain top talent. But is this true, and does typical agency culture reflect the values agencies aspire to?

The average turnover for marketing agencies is around 30%. That’s ~3 years if you’re on par. One of the worst-performing industries for staff retention. Something isn’t working.

The problem with ‘lifestyle’ culture.

Don’t get me wrong. Having regular opportunities for staff to feel part of a team creates a sticky culture that people don’t want to leave.

But let’s try a thought exercise:

An agency has a free bar in the office, regular opportunities to go out drinking through the week, and extended Friday lunches. Staff stay long after work to hang out and enjoy the facilities. They play pool, drink free booze and generally have a good time.

This same agency hasn’t implemented training programs or clear career paths. Performance reviews are intermittent and salary reviews come when a staff member threatens to leave.

Who will this agency attract and retain? Top talent looking to progress in their career or people looking for a good time?

The answer is no mystery. McKinsey research identified the four elements most valued by top talent and their relationship to employee satisfaction.

Let’s call the beer fridge a perk. It’s just one part of the least influential group of factors affecting employee satisfaction. That’s no surprise. 90% of people are willing to earn less money to do more meaningful work.

How should agencies view employee experience?

Below is a list of statements grouped by negative, expected and positive experiences. Which of these statements apply to your agency?

Negative experiences

Agencies with these negative staff experiences would see new staff leaving within a year.

  • I am not paid a fair rate for my work
  • I am expected to work unreasonable hours
  • I don’t have the equipment I need to do my job
Expected experiences

Agencies achieving these expected experiences may retain staff 2 – 3 years.

  • I am treated well by my manager and peers
  • My manager understands my work and contributes to my professional development
  • My contribution is valued
  • I receive regular reviews of my work and salary
  • Working here is contributing to my career
Positive experiences

Agencies achieving these positive experiences might expect to retain good staff for 4 years or longer.

  • I have fun with my work*
  • I am seen as an important part of the team
  • I feel positively challenged by my work (stretch)
  • I am rewarded for excellent work

*Free beer goes here

Part of the take away here is that whilst drinks, parties, and free food can be part of creating a fun workplace, they aren’t more important than fulfilling the basic expectations. That is: demonstrating to someone that their career is important to the business and they have opportunities for growth.

But for top performers, agencies need to go further.

“Many of these employees set an incredibly high bar for their organizations. Precisely because they work harder (and often better) than their peers, they expect their organizations to treat them well—by providing them with stimulating work, lots of recognition, compelling career paths, and the chance to prosper if the organization does.” – (HBR, How to keep your top talent)

What should agencies be doing?

Addressing the issues affecting employee engagement doesn’t need to be complex, but it does require senior buy-in and a top-down push.

There are some obvious starting points:

Basics
Expected as a minimum by most employees.

  • Monthly catch-ups with a manager (at a minimum)
  • Quarterly goal setting and review
  • Annual performance reviews connected to the above
  • Scheduled salary reviews (not combined with performance reviews)
  • Training and development programs
  • Adequate resourcing based on contracted client hours

Advanced
Not all that common, but important for developing a stronger culture.

  1. Stretch projects / Project champions
  2. Involvement in decision making
    (team leadership, shadow boards, regional team leadership)
  3. Internal / external recognition
  4. Financial recognition programs
    (bonuses, prizes, benefits)
  5. Defined career paths and progression opportunities.

This second set provides an opportunity for the business to focus on its aspirational qualities. Typically: fostering innovation, ownership and quality of work.

Giving high performers opportunities to shine through projects focused on developing aspects of the product offering, sales, marketing, or any area of responsibility not only engages those staff but can help build a better business.

There is an important caveat. Extra responsibility should result in reward. Failure to reward good work will be interpreted as a lack of recognition or exploitation and is a red flag to a top performer.

TL;DR

For many agencies, a defining aspect of their culture is drinking. This is often accompanied by a failure to support employees career development. This will inevitably lead to loss of good talent.

But the solution is not complex or mysterious. Establishing basic processes to guide staff through their professional development can help stop the leak.

Going further, businesses who challenge high performers with additional responsibilities will not only keep those staff more engaged but also solve business challenges. However, they should be prepared to put their money where their mouth is or risk appearing exploitative.

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