The War for Talent is Back. Here’s What to Do.

Attracting and retaining top talent is the key to long-term success. It’s about to get a lot harder to do. The ongoing battle for talent is heating up.

The purpose of this article is to make independent agency owners aware of what we believe is either here already or on the horizon. During the next few weeks, our posts will go into depth on two critical areas… compensation and culture… to ensure your agency is protected from the imminent talent war.

There has always been fierce competition to attract the best talent, even during difficult times. There’s simply not enough of it to go around.

Today, the battle for talent is already heating up to the most competitive level we’ve seen in years. The bidding for the best people will only become even more intense in the coming months.

What’s happening right now.

All indications are that we’re finally coming out of the COVID-19 pandemic. During the crisis, many talented people with stable positions were too anxious or insecure to move to a new job with a less certain future. Job stability was more important than new opportunities and they stayed hunkered down in place (especially those with families to provide for).

That’s quickly disappearing even as you’re reading this. People are starting to change jobs again. Talent in general is feeling optimistic about industry-wide growth and what that could mean in terms of an exciting new role or higher compensation. Talent is now being recruited aggressively while they’re simultaneously considering changing jobs for the first time since February, 2020. And some of them may be working for you.

Marketing communications agencies are now transitioning from sheer survival mode to actively pursuing growth. The GDP grew an impressive 6.1% in the first quarter of 2021 (and some of the most populous states weren’t completely open yet). The rest of this year is expected to be at least as strong if not even stronger.

Rising GDP and the expected increase in consumer spending should drive overall agency industry growth which will translate directly into a greater demand for talent. The increase in demand will then drive higher average industry salaries.

Here are some of our thoughts about what you should be doing about that.

Four key steps to affording and keeping talent.

We foresee an upward shift in overall compensation, especially for senior and mid-level talent. We expect both salaries and bonus compensation to increase.

First, you should be closely tracking industry salaries now. Make sure your base salaries and fringe benefits are market-competitive (and stay that way). Don’t wait until year-end to assess your salaries in the face of an environment of increasing compensation. You’ll be too late and lose talent.

Second, lock in talent with robust annual performance bonuses coupled with a long-term incentive plan that rewards tenure and performance by providing them with a stake in the future. This plan can be limited to the people who drive your agency’s success. Losing a key senior leader can be devastating to most independent agencies.

Third, since talent represents your largest cost, increases in compensation should be reflected by increases in your agency’s hourly rates and retainers. Like any other business, agency owners must ensure their pricing reflects the true cost of providing services to clients.

Fourth, to some degree, you can fight back against talent turnover with a healthy culture. Said more forcefully, we have frequently found that the most successful agencies have exceptionally strong cultures. With enough care and commitment, your culture will help you retain talent and can even become a strategic weapon for your firm.

We know how to help agency owners develop compensation, bonus and talent retention plans.

We’ve worked with many different marketing communications agencies to create compensation and bonus plans that help them attract and retain top talent, especially at the senior level.

We’re here to help you prosper.

Prosper Group exists to help the owners of independent marketing communications agencies achieve their ambitions and maximize the value of their life's work.

Our team of former agency leaders and owners focus their deep experience on implementing proven proprietary methodologies across our three practices of agency performance, owner exit planning and M&A transactions in order to drive owner and agency success.