Solving Advertising’s Talent Crisis

Advertising is a massive human enterprise. The top 10 advertising agency holding companies employ a combined 370,000 employees worldwide, with thousands more employed as consultants, freelancers and outsourced team members. All of this talent is a major investment for the agencies. Sir Martin Sorrell, CEO of WPP, estimates that his company spends $9 billion each year on employee compensation. The other holding companies spend billions more on top of that.

Despite this, the industry is in the midst of a major talent crisis. Here are four signs:

Competition for talent is fierce. “We need to fight with startups, technology and platform companies for talent, not just banks anymore!” Maurice Levy, CEO of Publicis Groupe, recently said. Venture capital-backed startups have added a whole new dimension to the talent crunch that advertising agencies are now facing.

Turnover is high. It’s estimated that advertising agencies have an annual employee turnover rate of upwards of 30%. To put this in perspective, only the hospitality industry – made up of people who work at hotels and tourist attractions — has a higher rate (37%). As a result, agency executives are constantly working to retain talent and recruit new employees. “Talent is the single most important thing that I do,” Miles Nadal, CEO of MDC Partners, remarked last year.

Open positions are numerous: I recently spoke to an agency executive about a large account that had 17 open positions. Mid-level positions seem to be the hardest to fill.

Poaching is rampant. At the 4As conference last year, agency holding company CEOs acknowledged that they cannot continue to just steal each other’s employees. As John Wren, CEO of Omnicom, remarked, “We’ve gotten way too comfortable poaching, effectively.” He added. “Episodically Omnicom has gone to campuses, but we don’t stay there… we pretend to stay there, but we don’t.”

Clearly as an industry we need to address our talent issue in order to continue to grow. There are at least four steps that we should take to address this situation:

Outreach. Last month Digitas hosted its first-ever University Open House at it New York offices. Over 125 current and recent college grads from over 30 universities came to hear Digitas leaders like Joanne Zaiac, Matt D’Ercole and Carl Freemont talk about advertising and media as a career. The students met one on one with over 60 Digitas employees and also had access to a recruiter to help with their resume. This is exactly the kind of outreach that we need to do more of.

Technology. After speaking with HR directors at major agencies, it’s clear to me that existing talent management systems do not meet the needs of advertising agencies. My company, Namely, has found that professional services companies like advertising agencies are structured very differently and require unique, account-based HR solutions.

Training. Often advertising is more of a guild than a profession. And while it’s great that many of us in the industry learn from the people we work with, it’s clear that training needs to become more formalized. We need to achieve a level of training on par with the large consultancies.

Diversity. A workforce that is more diverse leads to a stronger and deeper talent pool. The industry is making progress to diversify, at least in terms of gender. Media agencies, in particular, have a good male-to-female ratio, especially in the junior to mid-level ranks. Some agencies still do not have enough double “X” chromosome pairs represented in their executive ranks, however.  This will hopefully change in the coming years as many of the women hired during the 1990s and 2000s work their way up the agency ladder.

While the advertising industry has a serious talent crisis on its hands, I’m certain that it can be solved through a combination of outreach, technology, training and diversity.