The sad state of advertising agency morale

Between every employer and every employee there is a mantra: "Take care of your employees, and they will take care of you." For the employee, it means that he or she will work hard, meet or exceed expectations and get along well with supervisors, subordinates and others. When this equation gets out of balance, people look for a new job.

For employers, it means providing an atmosphere that fosters growth and learning, and providing opportunities for advancement and a nice work environment. Caring about your employees is a necessary foundation for empowering them. Many employees have stressful home lives and it can make an enormous difference to their productivity if coming to work is actually a haven away from their problems at home. 

Some advertising agencies today remain multi-generational workplaces, which pose a challenge for managers leading age-diverse teams. Generational differences in values and job expectations can be a cause of conflict. Managers must recognise the generational differences so that individualised approaches can be made with motivation, recruitment and retention. 

Different generations possess different beliefs about the rewards that a job should provide. Each generation has its own work ethic, attitude, and communication style that may need to be handled differently.

Boomers, aged 50+, feel rewarded with a job well done. While they, like everyone else, want to be well compensated, they take pride in what they have accomplished. But they also derive their rewards from the recognition received for their contributions to the organisation. 

Generation X, 35 to 50 year olds, tend to look at a job as more of a contract, and apply more practicality to the rewards. They expect fair compensation and the opportunity to earn extra for doing extra. They seek opportunities to build skills and credentials that will help position them for the future. Thirdly, they value time off, which will provide the balance they seek, and look for an enjoyable atmosphere where work is not taken too seriously.

Millennials, 16 to 34, are the most racially diverse generation in history. They are also the first generation to be “digital natives”, born into a digitally connected world. In the workplace they seek fun and stimulation. While they know they have to work, they will do so more effectively if they are having fun and feel some control over their environment. They want to work where and when they like and may have a difficult time understanding why it should be any other way. Employers embracing the desires of millennials have been able to maintain lower turnover rates and higher productivity.    

Given today’s tough economic environment, new research shows that many ad agencies have forgotten their end of the bargain. And one thing is very clear: money is not the only factor in keeping their staff from leaving.

Plunging morale

A recent Campaign US Annual Morale Survey for 2016 revealed a staggering 36 percent decline in overall morale among agency employees. I found this statistic to be astounding. Along with slipping morale, the study also uncovered other symptomatic issues including talent retention and a decline in employee performance.

A similar study done back in 2015, revealed that only 34 percent of employees said their morale was either low or dangerously low. Those numbers were alarming at the time. More worrisome is the fact that morale among agency employees this year has experienced a distressing decline with 47 percent of agency employees reporting either "low" morale (31 percent) or "dangerously low" morale (16 percent).

What’s more, agency employees with low morale also reported dissatisfaction with leadership and advancement. The top factor contributing to low morale was a dissatisfaction with company leadership, followed closely by a lack of advancement opportunities, and a general dissatisfaction with work. Less impactful were overall company performance and diversity.

Of the 53 percent of agency employees who reported "satisfactory," "good," or "excellent" morale, life balance was the biggest influencing factor. The other two big contributors to positive morale were "satisfaction with work" and "creative freedom.” If the alarm bells are beginning to ring loud and clear, it’s because 63 percent of low morale employees are actively seeking a new job and an extraordinary 29 percent are looking to leave their current positions.

Unsurprisingly, morale has a major impact on overall employee performance. If agency employees don't feel they are fully supported, their performance takes a hit, which is pure disaster for the ad industry's bottom line.

Suicide in the ranks

I was taken aback recently when I read news about Japanese inspectors from Tokyo’s Labour Bureau raiding the offices of Dentsu a second time as part of an ongoing investigation into the conditions that led to the suicide of an employee last year. It follows the finding that certain employees put in more overtime than they had agreed to. The “suicide due to overwork” phenomenon is so prevalent in Japan that there’s a name for it: karoshi.

The Labour Bureau wanted to determine whether Dentsu encouraged a culture in which employees routinely exceeded their maximum overtime limit. Dentsu made several moves to address the situation, culminating in the announcement a few days ago that CEO Tadashi Ishii will step down, which is seen as a gesture of acceptance of responsibility for the suicide. No doubt, the raid must have been the inspiration behind Manga Comics illustrating the karoshi phenomenon with a cartoon that went viral on social media late last month.

What’s your agency culture?

Having worked in the ad industry for more than 30 years, I was dedicated to creating a culture where staff would enjoy coming to work and be dedicated to creating great work for our clients. I found that most employees working on active accounts were truly engaged in what they were assigned to do. Whether the staff were creative, account service, media, digital, or design people, many of them came in early, worked late into the evening, and felt gratified to make their contribution to the advertising product. Granted, a decade or two ago, advertising was much simpler than it is today. Now it’s so complex it’s hard to even call it advertising.

For ad agencies today, it’s better to empower employees than it is to exploit them. Yet many agency employers are underpaying and/or overworking their employees and feel proud when they are increasing profits for themselves and their shareholders. Regrettably, this type of agency culture leads to short-term gains at the expense of long-term rewards.

In the ad agency business, employees are as important as the product you are selling—maybe even more so. However, the battle for ad agency talent has always been a great concern for agencies, with some of its top people either moving to different companies within the industry or leaving the industry altogether. To begin with, turnover in the ad industry is higher than most related industries and growing at a faster rate (10 percent per year) than competitive industries. For an industry built on the backs of its people, the ad industry now has a major problem in not meeting peoples’ expectations.

Agencies at a crossroads

Data, pulled from LinkedIn's talent-focused surveys of over 300,000 global professionals, placed agency jobs near or at the bottom of categories including long-term strategic vision, work-life balance and job security. Agencies were compared against eight competitive industries including technology, retail and consumer packaged goods. Fifty percent of agency staff said they wanted more challenging work, compared to a 36 percent global average. In terms of compensation, 45 percent want more rewards or recognition and are unsatisfied with compensation and benefits.

Looking deeper, we can see another major factor for low morale in advertising agencies is the diminished role of advertising agencies as strategic advisors and counsellors to the overall marketing plan. Today some of those responsibilities have moved to research firms, data companies (Deloitte, Accenture) and strategy consulting firms and that has delegated roles of advertising agency personnel to glorified commodity project managers.

If that’s not all, these days ad agency management seems to churn through entry-level employees as quickly as they come in. Why? Because they are cheap to employ. Many are brought in on a trial basis to see if they work out. Most young people in ad agencies these days are millennials. Research says their major fault is their lack of loyalty to one company throughout their career. But who can blame them when the environment they work lacks training programs or a management structure that supports their career development?

Another major factor for low morale in traditional advertising agencies is the diminished role of advertising agencies in general as strategic advisors and counsellors to the overall marketing plan. Today some of those responsibilities and roles have gone to technology and strategy consulting firms. And that has relegated the roles of advertising agency personnel to glorified commodity designers, production managers and traffic/project managers.

The advertising agency business is at a crossroads in regard to how it treats its employees and the value agencies see in their employees. Something has to change.

Truth of the matter is, if people feel they are really part of the organisation they work for, that their contributions are welcomed and taken seriously, if they feel they are creating something special, new or different, they will be far more happy in their job. As I see it, it comes down to leadership. Leaders have to create that emotional engagement for that to happen.

10 ways to improve your employee morale

Compared to employees who are motivated, disengaged workers are less efficient, miss more workdays and cost their employers more in lost productivity. To fix morale problems, agencies need to create a work environment that is more appealing and tailored to the individual. Let them know what they can achieve and accomplish, what sort of development and personal growth opportunities there are for them within the company.

More than anything, it's incumbent on ad agencies to help young people coming into the industry to experience work that is creative, fun and enjoyable, and not just drudge work that the more senior people often try and pass off to the juniors in the shop.

Developing and maintaining good morale starts with hiring the right people in the first place. The best agency managers know that their keeping morale levels high is in their hands.

Here's 10 morale-building areas to focus on:

1. People thrive on continuous feedback. Make sure that your people clearly understand their role and how they bring value to the agency. Make sure you give them continuous feedback to ensure this understanding and to make them feel truly connected to the agency.
2. Lead and motivate by example. Set a high standard. Show them your own positive commitment, attitude and optimism in the manner you want imitated.
3. Face to face interaction is best. Modern technology, such as e-mail and teleconferencing, have largely replaced face-to-face interaction in the workplace, causing workers to become disconnected. It’s critical that you communicate face to face with your employees. Don’t do it by e-mail. Tell them your objectives for the company and share all the news you can that will affect the agency. Ask workers directly what motivates them, and get their feedback on how they would handle staff issues.
4. Treat your employees as equal members of the team. Make them feel valued by giving them room to make decisions. Valued employees tend to be loyal employees. To make employees feel valued, managers need to constantly and immediately acknowledge their contributions.
5. People thrive on recognition. One of the biggest reasons people change jobs is that they feel anonymous in the agency—like they do not exist—and feel under-appreciated as a result. Too few ad agencies thank their employees for their contributions, no matter how big or small. Employees need to be recognised. Consider using an all-staff memo or a group e-mail to boost their morale when an individual or a teams made an extraordinary contribution.
6. Stimulate your people. People need new challenges to stimulate their creativity and to incentivise them. Try not to maintain the status quo of agency creative and account people. If they remain doing the same things for too long they may move on and take more stimulating jobs elsewhere.
7. Manage staff work loads effectively. Advertising people are known to 60- and 80-hour work weeks. Rewarding them with salary increases cannot resolve the issue of burnout. One reason so many of the best and brightest minds leave the ad industry is because they can make more elsewhere, work fewer hours and have a better balanced lifestyle. Ad agencies need to be aware of and manage overwork.
8. Mediocre supervisors. Lousy management is the single biggest complaint of all. Agency employees cite too many “rush projects, poorly planned projects, and lack of project direction” from their supervisors. Today, agencies are moving their people up the ranks too quickly. Many are totally untrained and lack the necessary management skills. Employee evaluations should be used as a management tool to help valued employees improve performance. Agencies need to invest in leadership and management training skills to continually upgrade their employees and to motivate them.
9. Loyalty is a two-way street. When an agency loses an account or a client cuts its budget, employees are fearful that they will be laid off. This policy breeds contempt, communicates lack of loyalty and results in poor morale and a feeling of futility. It makes people want to leave. What to do? Share in the pain. You don't win over employees if you ask them to take a pay cut while they watch management continue to receive an annual bonus. Employees appreciate bosses who make sacrifices, too.
10. Incentives are critical. Companies need to find ways to incentivise their employees to stay on. Keeping highly regarded employees should be priority one and is neither difficult nor expensive. It merely requires a management committed to act in the belief that their employees are their best asset.

How one ad agency improves its operations and morale

To cultivate what their executives like to call an “invention culture”,  New York ad agency Kirshenbaum Bond Senecal & Partners, part of MDC Partners, crowdsources ideas from its staff members on how to improve operations and morale.

One of the ideas, which won a $5,000 grand prize for two young employees, involves turning over about 4,500 square feet of space in the agency’s headquarters for employees to use, individually and in groups, for personal, creative projects. The space will also be opened to artists and other people not on the agency’s payroll for exhibits, discussions and potential collaborative work sessions with staff members.

Another idea, which won a $500 runner-up prize, involves creating a game-like rewards system in which staff members and agency clients will be able to acknowledge employees who go the extra mile. The rewards will come in the form of points that can be exchanged for small cash bonuses.

The agency’s first crowdsourcing competition was held in October 2009. Three months later, a proposal from two employees to start an agency mutual fund led to an initiative called the K.B.S.& P. Client Stock Index, which tracks the performance of publicly traded shares of the agency’s clients.

A culture true to your company’s vision and goals

Such efforts to cultivate ideas from employees are indicative of attempts by ad agency leaders to pay more attention to their work forces, to inspire and refresh talent and, ultimately, gain retention.

When advertising professionals talk about what they enjoy most about their job, they often speak about agency culture. A positive and upbeat company culture can keep employees sticking around for longer and reduce the agency’s spend on replacing talent. It is therefore important to maintain a culture that is true to your company’s vision and goals. You might want to consider creating your own culture committee to be responsible for making sure that your employees are still engaged and having fun. Agency cultures that honour humanity, that embrace change and improvement, that motivate people so they feel purposeful, connected and valued, are usually the ones that are the most successful.

Mike Fromowitz., a longtime Asia-Pacific ad man, is now partner and chief creative officer of Ethnicity Multicultural Marketing + Advertising in Toronto. He is also the author of the one of the most consistently popular articles on this website, a 2013 post entitled, "Cultural blunders: Brands gone wrong".