HR departments of advertising agencies are waking up to a new reality: We’re losing talent, and fast. According to a recent Forbes study, 60 per cent of millennials now leave a company within three years. The days of long and loyal service are over, and in a terrifying twist, clients are now hiring agency creatives, fuelled by the belief that they can do the work themselves.
When our clients begin to hire our best people, it is partly because they’re demanding greater commitment to their brand. As Unilever’s Keith Weed said to his agencies and suppliers: Work 110 per cent for our brands, not your specialty. The other reason is that marketers demand new competencies, speed and agility.
For each millennial employee lost, companies can spend between US$15,000 and $25,000 to replace them, according to a study by PwC. The current advertising talent model is to shoehorn millennials into disciplines and departments—anachronistic for an industry at the apex of creativity and business. We expect our people to stay there for the next 10 years—they don’t. And they won’t.
Fitting into the new transactional, nomadic norm
The needs of clients’ businesses support a much more collaborative model—one that acquires skills according to the unique requirements of each project—thus spurring the freelancing trend. According to executive placement firm Hanson Search, freelancing grew three times faster than permanent employment. And thanks to digital matchmakers, freelance talent is generally available almost immediately. The Deloitte Millennial Survey last year confirmed this trend, finding that 70 per cent of millennials see themselves working independently rather than being employed in a traditional organisational structure.
The exodus from traditional advertising agencies to smaller or newer digital and social firms is not limited to creatives. Planners are leaving to advise brands and startups on business strategy. Tech and consumer firms, such as Facebook, Coca-Cola, Google, Twitter and Mondelez, are among the main scouts of advertising talent.
In order to stay in the game, the agency of the future must be able to orchestrate the best talent around a client’s marketing challenges. They must be able to flex around a client’s partners, be they strategic, data, creative, content, engagement or measurement.
To continue to sell expertise, we may have to borrow from a model already established in the PR industry - build expert practices around categories, such as luxury, consumer, technology and financial, and recruit talent that has a deeper understanding to solve the client’s problems.
Designing a collaborative talent model to meet millennial expectations
Talent managers and culture builders need to take on new responsibilities; they need to be far more proactive and build a constellation of talent that can be drawn together based on the ever-changing needs of client briefs (as opposed to filling vacancies). Where costs used to follow revenue, this is not how the digital age was founded and built.
Our new-style staff expect to be rewarded and recognised as soon as they deliver above expectations, not on the basis of 12-month or (increasingly) 18-month review cycles. They hope to shoulder more responsibility as soon as they have proven their worth, not when the position above them is vacated. They are broadcasting their achievements every step of the way, and competing employers—from every industry—take notice.
A big role that talent managers will need to start playing is to recognise and reward talent, but they need the autonomy to do so. At Bates CHI & Partners, we are able to reward on the spot for a job well done. Given the relative size of the network, without a “central management” function, our staff are much more mobile. They have the change and challenge they need in order to simultaneously be rewarded and keep motivated.
Like any good football club, the agency of the future will have a talent-spotter, evaluator and deployer embedded into every business team. Talent managers need to realise that talent may not necessarily sit in their backyards and will have to be drawn from different parts of the world. Millennials place a high value on overseas experience; 71 per cent expect and want to do an overseas assignment during their career, according to PwC.
Millennials are the managers of today, the leaders of tomorrow. If we do not become talent agencies that support their aspirations, we will lose our ability to stay relevant in an ever-changing industry.
David Mayo is CEO of Bates CHI & Partners