Staffs were held globally at current levels, and, in some cases vacated positions were even ordered left unfilled.
Viewed from Wall Street (and perhaps even from Madison Avenue), this was a wise move. The industry looked poised for a steep decline in developed economies, and prudence dictated that staffing should adjust accordingly.
Viewed from Wall Street (and perhaps even from Madison Avenue), this was a wise move. The industry looked poised for a steep decline in developed economies, and prudence dictated that staffing should adjust accordingly.
But viewed from street corners in Beijing, Mumbai or Rio, it looks shortsighted. Before I dive deeper into this, I should disclose that, my own business stands to benefit from the majors’ hiring freeze. I should be cheering them on.
But I can’t. I have too many friends and ex-colleagues in the business in China who are coping with brutal schedules, overwork, and exhaustion. In the face of continued growth - sometimes in excess of 50 per cent year-on-year - they are being told to make due with the same staff - or less - than they did in 2008. Leaving aside cases of companies that were over-capacity before the year began (and there were a few of those) and managers who are unable to cobble together a business case for new hires, such blanket rulings ignore China’s implicit fundamentals. Agencies that are new entries into the market, who are on a roll winning new business from others, or who are winning business from Chinese enterprises expanding abroad are going to need more staff.
And if they don’t get them, those companies are just going to start burning out the very people they depend on to develop new business, serve the business in house, be creative, and keep the clients loving the agency. Where I come from, that’s called ‘eating the seed corn’. In finance, that’s called ‘dipping into capital’. And that’s unwise.
Service levels cannot be sustained in that kind of environment. Morale plummets, to be sure, but more important productivity, creativity, and quality of work decline. Some of those really smart people who lie at the core of an agency’s long-term prospects in China start looking for the exit. And that’s dangerous.
Smaller, hungrier and wiser agencies in China - a growing number run by refugees from the majors — are circling. Not only are they ready to exploit employee discontent by cherry-picking the best people, they are eyeing the clients as well.
A rational global agency CEO would say to himself or herself “my staffing levels are flat, business in the US and Europe is shrinking, business in China is growing, and my China staff is, in fact, overworked. I’m shifting headcount to China”. But this does not seem to be happening. The impression I’m getting is that staffing is being held globally without respect to market. If I were a conspiracy theorist, I say that this was being done to protect positions or favoured people in the slower markets.
I may be wrong. But I am not the only one who thinks this. At best, it is a perception problem that the agencies need to address. At worst, it may be time for the agencies to think about thawing hiring in China, even if that means putting another market into a deeper freeze.
After all, there is no point in sending an executive out to sell new business in an emerging market, only to shrug and say “sorry - hiring freeze” when she comes back and asks for the staff she needs to delight the new client. All you are doing is sending that client (and maybe the executive) back out the door, into the waiting arms of smaller, more nimble competitors.
David Wolf, CEO Wolf Group Asia
wolfgroupasia @mac.com
