Kenny Lim
Feb 19, 2010

Post recession agency bosses are keen to rebuild the ranks without breaking the bank

The start of the year has seen an upsurge in the movement of talent between and within agencies across all industry sectors. Is this a sign that the recession is finally over or is it just a natural occurrence as agencies budget for the year ahead?

Post recession agency bosses are keen to rebuild the ranks without breaking the bank
According to Mike Game, CEO Asia of Hudson, a proportion of the activity now comprises ‘catch-up’ hiring following the cuts and freezes that were implemented early last year.

“Salary trends in the marketing and media industries have been soft, with salary freezes or very modest increases representing the norm during 2009,” he says. “With this sector in recovery, sentiment towards hiring and salary trends will improve.”

Charlie Thomas, managing director of The Talent Business Singapore, agrees. “It certainly feels like confidence is back and there are a lot of briefs and roles around,” he says.

From an anecdotal perspective, at least, it would appear that hiring in the industry is experiencing an upturn. January saw a raft of new appointments, as well a great deal of internal change within individual agencies.

For many agencies,these movments are in part due to the number of big accounts and businesses that shifted over the past year, something especially true for media agencies.

“Some agencies had to let quite a few people go last year and, inevitably, when the business returns via organic growth or a pitch win, there’s a need to staff up again,” says Thomas.

Similarly, a fair number of the new hires can be attributed to the usual start-of-the- year game of musical chairs, as talent - often boosted by end of year bonuses - looks for fresh challenges in the market.

And, according to one agency source, there is another reason for the new hires, and one directly related to the recession: agencies are using their 2010 budgets to get the right talent in place, just in case the market dips again this year.

For others, though, the recession is having the opposite impact. With global hiring freezes in effect, many Asia-based offices are finding it hard to get approval for desperately-needed new hires in the region, regardless of their 2009 performances.

“Holding companies are still being extremely tight on staffing and cost structures, and many agencies haven’t seen a significant increase in revenue to afford significant increases,” says Ian Thubron, EVP of TBWA Asia-Pacific.

In terms of salaries, Thubron notes so far no “crazy increase” levels such as those seen during the Asian financial crisis of 1998 and the dotcom boom. “Then we commonly saw 25 to 40 per cent increases,” he says. “At the moment we’re looking at below 10 per cent in most cases.

While agencies across the industry are adopting different approaches, most are unlikely to engage in price wars to attract staff, preferring to build on their strengths and to look within their own companies.

Edward Pank, MD of Bates 141 Singapore, sums up industry sentiment, arguing that value for money is still the most important factor when it comes to the hiring process. “The age of accountability is very much here to stay.”

Industry Comments:

Mike Game, CEO Asia, Hudson
“It is critical for agency chiefs to engage with their existing talent and implement strategies to improve retention. The tough times of 2009 have negatively impacted engagement in many instances, representing a key retention challenge as the market improves. Agency chiefs should be encouraged but prepared for candidates who have undertaken more thorough ‘due diligences’ on new opportunities than before.

During buoyant periods, candidates were prepared to job-hop for salary increments or other short-term incentives. Now, they are more focused on longer-term career progression, learning and development opportunities, and company innovation.”

David Mayo, president, Ogilvy & Mather Asia-Pacific
“The motion trend of salaries - especially at the junior and mid-tier - has been upwards over the past four years. Now the recession has stunted that trend without killing it outright. Salaries at the top end have been more steady.

When you hire top senior talent, they’re more resistant to external forces and they command a premium that buyers are prepared to pay. Obviously that premium varies slightly, but there is still a premium. I never hire in a hurry and I never play the price game. Everyone loses if you do that. The best people take time to find and engage, and you should expect to pay them what they are worth. The right ad agency managers always plan their staff strategies sensibly.”

Jeffrey Seah, CEO Southeast Asia, Starcom Mediavest Group
“As the negative haze of 2009 dissipates, agencies will start to re-arm their razor-thin staffing ranks. Clients are starting to brief more, thereby catalysing the talent search. Unprepared agencies have resorted to offering pay packages 30 to 40 per cent over the industry standard. This will come back to hurt them as we’re early in the recovery cycle.

In 2010, knowledge leadership will lose its premium as agencies look for multi-skilled operation team leaders. We will see a reduction of skill-set silos such as digital. Talent, on the other hand, will have wider role sets to choose from, with clients, media vendors and agencies hiring on the same skill scope. ”

Christina Cheang, regional MD Southeast Asia, GolinHarris
“I can’t speak for the rest of the industry, but these are still early days to be pushing salaries up. Even heads of government dare not gaze into a crystal ball and confidently announce that all is truly back to normal, let alone encourage salaries to soar.

In the US and UK, bankers are being knuckled for over-generous payouts to them. As such, I would personally approach 2010 with caution until there are clearer market signals. GolinHarris does not dangle huge salaries or huge carrots. Our best team talents cannot be hired in a hurry. The exception is where the talent determines this, and is indeed the prized candidate that we most want and immediately need.”

Got a view?
Email [email protected]

This article was originally published in the 11 February 2010 issue of Media.

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