Does it feel like you’re working harder just to tread water? After it was confirmed last week that the number of people working in advertising and marketing fell by 14% between 2019 and 2022, it is understandable to feel that way.
The Advertising Association delivered a series of reality checks about the staffing pressures facing the sector in its major report, Investing in Our Talent’s Future.
The number of people working in the industry in the UK fell from 424,000 at the start of 2019 to 366,000 in the same three-month period in 2022.
Looking more closely at the figures obtained by the AA, the most drastic drop was between 2019 and 2020 (a 9% fall), no doubt largely due to pandemic-related lay-offs.
But while there might have been some hope that the workforce was stabilising between 2020 and 2021 (when there was only a slight 0.5% drop in staffing numbers), there was another large decline from 2021 to 2022, of almost 5%.
The AA’s report is the result of months of work trying to understand the key challenges. It identified three main hurdles in adland’s struggle to keep staffing levels up. One was a lack of awareness of advertising and marketing as a career choice among young people. Another was the challenge of hybrid workplaces and how to ensure staff do not become isolated.
It was the third that caught my attention the most; low industry salaries and salary progression.
The AA’s conclusion from its analysis of figures is alarming – adland employees received lower pay in real terms in 2021 than in 2011.
Broken down, over the period, average advertising salaries declined by 4%, while marketing salaries dropped 10%, once adjusted for inflation.
By comparison, the body notes, annual advertising spend increased by 42% over the decade – some of which it says could be attributed to reasons including increasing media costs. But still, it is food for thought. As the AA says, “some may find it difficult to shake the fact that, as workloads increase, many remain on the same wages”.
What is unsurprising, but important to point out, is that poor pay is being most acutely felt among junior staff, making it hard to attract them in the first place, and then retain them. HR leaders told the AA that skill shortages in advertising and marketing were worst at entry-level and at mid-level (people three to five years into their careers).
Campaign’s own analysis of pay in the sector – among agencies – last year sparked a conversation about low entry-level remuneration. The survey of 82 agencies revealed minimum salaries for graduates ranged from £17,000 to £28,000, with an average being £22,820. The exercise will be repeated this year, to see if the situation has improved.
Average industry salaries failing to increase in line with inflation over the past decade is a big problem – one that is even harder to tackle now there is a cost-of-living crisis.
As the AA highlights: “Of course, most companies do not have the resources to just simply increase salaries – brands and agencies are undoubtedly suffering from the effects of the cost-of-living crisis, too.”
However, the industry body is at pains to point out that this is not a reason to ignore the issue. A “radical long-term rethink on salaries” is needed, it says, to compete with other industries for talent over the next 10 years.
While employers might not be able to raise pay levels immediately, there needs to be a focus on improving salaries in the long-term – and this can guide actions now.
There is a vicious cycle of fewer staff leading to lower productivity, meaning a smaller chance of business success and potential pay rises. A way to break the cycle is by investing in training and development of staff, which in turn should encourage people to stay in jobs – and increase productivity. That is one of the major recommendations made by the AA in its report, as it implements its three-year strategy to attract and keep hold of talent in the industry.
Industry leaders may themselves be struggling to keep their heads above water in the coming months, but investing in staff too should ultimately pay off, for everyone.
Nicola Merrifield is premium content editor of Campaign