Despite efforts by individual agencies and the 4As, Hong Kong is
caught in a vicious salary spiral which one senior executive described
as "out of control".
Staff poaching by dotcoms and among agencies have contributed to pay
packets rising by up to 60 per cent in some cases.
The hikes fly in the face of a 4As recommendation earlier in the year
for agencies to cap increases at three per cent. They also undermine
efforts by agencies to retain staff through non-financial means -
training, outlining career paths and the implementation of flatter
structures that give individuals greater responsibility.
A recruiting consultancy source said the situation could become even
worse because Pacific Century Cyberworks (PCCW) has begun a massive
drive for advertising, marketing, branding and PR professionals. (See
also CReATION, page 23).
At another recruitment consultancy, a source put the vacancy rate in the
ad industry at 30 per cent and added that because it was increasingly
difficult to find the right people, agencies were lowering their
standards.
"One agency was looking to fill a senior position in its interactive
unit. The brief was simply that the right candidate had to have two to
three years Internet experience. Advertising experience would be an
advantage but not necessary. Half a year ago, no agency would have
considered this candidate," the source told MEDIA.
Dotcoms are mostly poaching middle-ranking agency executives; however,
even senior staff are being lured into cyberspace.
The most senior defection to date is Mr Raymond So, who quit as J.
Walter Thompson Northeast Asia chairman to become executive VP of PCCW
in Taiwan.
Mr So was with JWT for 14 years and his responsibilities will be taken
over by JWT's Asia-Pacific CEO Kevin Ramsey.
However, it is the poaching of middle-ranking executives that is
fuelling the steep salary spiral.
Dotcoms are luring large numbers of professionals from the ad industry,
shrinking the talent pool.
To compensate, agencies either have to look overseas for replacements or
poach from each other. Both options mean greater salary overheads.
Some try to retain staff with pay hikes, but even this can be
expensive.
Agencies said that in order to keep key staff, they are forced to give
them a pay hike of between 20 to 30 per cent; in one extreme case it was
60 per cent.
TBWA MD Neil Ducray, estimates that there are currently 70 per cent more
jobs than people available.
"The talent pool is just not there anymore. Expats might be the way to
go but for middle level personnel that isn't the preferred route I would
take," he said.
McCann-Erickson Hong Kong said that it has up to 15 positions to fill
because of staff leaving and new business wins.
Mr Vince Viola, McCanns worldwide account director for Cathay Pacific,
said: "Every time someone leaves, the replacement would have to be paid
30 to 50 per cent more or they won't come.
"It's almost like the stock market now. One day an account manager is
worth 'x', the next day the price changes, typically higher, to value
'y'. It's out of control and it cannot go on like this."
At Bates Asia, the agency has rolled out an interactive course for all
1,000 staff regionally. To date, only 60 are taking part and Bates'
regional president Jeffrey Yu said, "We are initially offering the
course to loyal and senior people."
When asked whether he was afraid that some of the first batch might jump
over to a dotcom with their newly-acquired knowledge, Mr Yu - who is
also the Hong Kong 4As chairman - said, "There is always a risk but the
benefits are greater than the risks. If we don't do this, we will be
left behind in the new economy."
