Heavy attrition in media agencies: What’s causing it?

Advertising is an industry that requires continuous stewardship to meet evolving consumer behaviours and technological innovations – finding new, better and different ways to communicate, captivate and convert, Christian Juhl, Global CEO of GroupM wrote in his blog a year ago. 

He further wrote, “The worldwide lockdowns, and the dramatic impacts they have had, have forced advertising to dig deeper to identify relevant and appropriate ways to engage with consumers. Behind these business shifts, our people have had to adjust too.”

What Juhl sought to underline is that the ad industry demands highly skilled and motivated leaders. Besides, exponential growth of digital advertising during the pandemic has further increased the demand of skilled manpower in media agencies. But the supply side continues to be weak, just as in other sectors. 

Result: Massive churning is being reported in all leading media agencies. Companies are trying to poach the best talents from rivals to boost their businesses, industry insiders told e4m. 

The Indian unit of Dentsu Group Inc has been rocked by a series of senior-level exits. More than six senior executives left Dentsu International India this year. Publicis groupe faced similar exits in 2020. 

Attrition has affected many agencies as employees nurtured to take up larger responsibilities and possible leadership roles are quitting and moving to rival set-ups, say industry watchers.

Salaries are not the driving force behind the worrying metrics offered by LinkedIn. It is a multifaceted issue that has been going on for a while, and the main reason talent is shifting to the technological industry is related to poor growth opportunities, they say.

According to ANA and Forbes, the annual turnover rate in the advertising industry is around 30%, the second-highest rate overall, after tourism. Having a high employee turnover rate is a worrisome metric, and it can be a symptom of unhealthy agency culture. 

High demand, weak supply in digital

Digital is now and it is the future. According to LinkedIn, the industry is growing at a rapid speed and has the greatest number of job openings, says Kaushik Chakraborty, EVP, iProspect India. 

Chakraborty opines, “All businesses need digital marketers to attract and retain customers. The prospect of exciting jobs in high growth areas that provide variety, excitement and learning, makes digital one of the most sought-after fields in advertising. The high attrition in this field as compared to traditional media, makes digital planners high in demand, hence, the opportunity to earn more salary and growth.” 

Advertising is a very people-led industry and many stay back because of the people there. When they leave, many other people also leave after them despite competitive salary and remuneration, say industry insiders. 

Rajni Daswani, Brand Experience & Employee Management, SoCheers, says, “Creative and digital agencies thrive on creativity, which is a very people-dependent aspect. Stability of people within the agency enables continuity and sustainability for its succession planning. However, work-from-home has changed what people expect from their employers. Apart from wanting open, creative and non-hierarchical workspaces, today the creative minds also look for more flexibility, work-life balance and job satisfaction of having created or achieved something more fulfilling.”

Daswani notes, “We are also seeing a lot more brands scaling up their digital presence after the pandemic & are realising the need for building in-house teams. Since the possibilities of training & in-person guidance were lower in recent times, it stepped up the demand for mid-career, senior employees.”

“The current demand-supply equation of talent in the industry is in disarray, and while the demand for good talent in the advertising sector is at its peak, supply of trained people in the industry is limited. Bigger advertising agencies that were primarily mainline are also scaling up their digital wings, picking up talent from smaller successful agencies,” says Daswani.  

He adds, for these people, the endless opportunities that are coming their way is a tide of good luck and perfect timing in regards to their careers. Moreover, working for a bigger name, be it a group agency or a known popular brand, promises a more direct impact of the work they create, hence the great appeal of the shift.

Aspirations & unhappiness

People switch jobs due to personal aspirations or are agencies unable to give their star performers a broader horizon? 

It's both, feels Janak Sarda, Vice President, Vice President, Digital Innovation on the global Executive Committee of the International Advertising Association (IAA). 

“Career ambitions usually drive people to take a switch. Moreover, many creative heads had little to do with economic distress. Ad budgets were slashed. In such circumstances, many people decided to switch their company for career growth,” says Sarda.  

“Sometimes, it is better for the person to leverage his talent in some other way, in a different culture,” an executive said. 

“Sometimes, there are many takers and fewer chairs; this is where a lot of churns happen. People who have been loyal to an agency for many years might not see an internal growth and think of moving, he said, adding that no employee would leave if the circumstances are perfect.

Restructuring in company 

In 2020, Dentsu announced it would cut the number of global brands from 160 to six as part of a major transformation of the Tokyo-based group’s international operations. This necessitated many exits and entries. 

Publicis Groupe had also witnessed integration of BBH which resulted in change at top level. Restructuring in the company also causes a rejig at senior levels.

“Company’s focus and targets often change due to reshaping, acquisitions, mergers. Many people find themselves uneasy in the new set-up and often tend to leave the organization,” says an executive. 

Sachin Kumar, Founder of Bottle Openers, says, “I don’t view recent shuffle in the industry as exits, but more as Change Management. Depending upon the stage of the company, every 5-10 years company goes through change. The needs of business could vary from a change in the strategic direction of the company, bringing in the change capable new age leaders, driving cross-functional collaboration, cost efficiencies etc. As they say 'What Got Us Here Won't Get Us There’.

Policies play a role too

The industry doesn’t have a mechanism to spot talent from the grassroots and develop it. It still looks to the very few postgraduate schools to get freshers. Most of the middle level recruitment is done by poaching from another agency, often at 20-25% more cost, since everyone wants people with experience. The only ones benefiting from this are the search companies.

People say designations in the ad industry are usually given based on years of service not on performance. There is no clear distinction between an average one and a good one, which often discourages the young and talented.

More churning expected in 2022 

Overall virtual fatigue and need for change, workplace recognition & rewards, internal politics and various other reasons continue to drive people to shift jobs. 

The next year or so is going to be a great demand-driven market for people in the mid and senior career paths and we can expect to see more of these changes happening, industry leaders speculate.