Advertising industry in India has been pummeled by an unprecedented manpower crisis. Although traditionally a poaching ground for talent, employee churn in the industry has hit a high of 35 percent-40 percent which has both big and small agencies worried. Exciting opportunities outside of advertising, better money in new-age jobs, poor retention plans at agencies and a young workforce not averse to taking risks, have all contributed to talent bleed and steep employee turnover.
Unmesh Pawar, chief people officer for Dentsu South Asia is candid about the industry’s current predicament. “The attrition in this industry has been challenging. The issue is complex with multiple factors aggravating the situation,” he says. Sanjeev Jasani, COO, Cheil India agrees. “Ad agencies have been experiencing some serious churn at the junior to mid-levels. The employee turnover rate of 35 percent is definitely a cause for concern,” he adds.
A couple of decades ago, an ad agency that managed to keep its employee turnover rate at 7-8 percent a year was laudable as the industry norm was 12-15 percent. “Today, if your turnover rate is 20 percent, it’s not problematic since most agencies have planned attrition of 10 percent a year. So, your real attrition is only 10 percent. But the current figures are high and worrisome as they impact the working of an agency and put pressure on the system,” says a former CEO of a large creative agency, declining to be named.
The reasons for increased attrition are aplenty with both pull and push factors at play. What’s pulling people outside agency jobs is the rise of digital marketing and the tech industries– sectors that have opened up a new world of possibilities for young professionals. They have a wider range of career options with start-ups and tech giants offering enticing opportunities that were not so prevalent a few years ago, says Cheil’s Jasani.
Roles associated with user interface, user experience and content management are available outside traditional ad agencies. “The tech industry provides higher salaries, a fast-paced working environment and opportunities for innovation,” says Dentsu’s Pawar.
Interestingly, even a new-age digital agency network like Zoo Media could not buck the trend. “How could we when every company is looking for a digital manager? In fact, the demand is greater than the supply. If I lose a person, I find it very hard to fill the position,” says Pratik Gupta, co-founder, Zoo Media Network.
The job market has been phenomenal for the last three to four years with well-funded startups poaching people from advertising, says Gupta. Ad professionals looking for new adventures moved as “these entrepreneurial ventures offer people a chance to be part of innovative projects, wear multiple hats, and have a direct impact on the company’s growth,” explains Jasani.
Even as new avenues open up, offers from the traditional work streams like professional consulting firms and brand manager roles continue. For creative ad talent, there’s availability of writing roles at content studios or in-house creative shops set up by companies. There are openings at firms like Google, YouTube and Netflix. In fact, Google launched its own ad agency Toaster.
Though advertising jobs were associated with glamour in the past, today, working for television, streaming services, social media or e-commerce firms is trendy, says adman and former BBH and Publicis Worldwide CEO Subhash Kamath.
To be sure, the advertising industry remains notorious for its long and stressful working hours which may be driving away young talent more inclined towards work-life balance. Jasani says the fast-paced nature of the work, tight deadlines, and high expectations can lead to burnout and a desire for a change of pace. Demands placed on ad agency employees have increased exponentially with the changes in the digital landscape and there’s a need to stay ahead of the game that requires constant upskilling. “Some individuals may feel overwhelmed and seek opportunities in other industries that offer a different work-life balance, Jasani says.
The younger generation of workers have very different expectations from their employers compared to the previous generations. Kamath attributes this to them being more secure financially as children of working parents. “They are willing to take risks or even a break from a job if they feel tired and want to pursue something else. I am not saying it as a negative if they’re for better work-life balance,” he says.
Financial security has also helped them speak up at their place of work and ask for more flexibility, better hours and opportunities for professional development. “It can be very challenging for agencies to meet all of these needs,” says Pawar.
However, he refuses to stereotype the generation on the basis of different expectations from their jobs and atypical preferences. Jasani agrees and says that it’s important to avoid generalizations and recognize that the high churn rate is influenced by a variety of factors. It’s the shared responsibility of employers and industry leaders to adapt and create an environment that attracts and retains talent, fostering a sense of loyalty and commitment among employees.
He says if you cannot excite people to co-own your vision and help them develop to the next level then there is no reason for them to stick around with you. “The problem then is not with them but with you,” he says.
Unfortunately, the industry has fallen short of employee expectations in terms of career guidance and advice. “To some degree, career paths haven’t been very clearly articulated and defined. To a large degree, this has been an apprenticeship model of sorts, where an iconic leader takes you under his or her wings and helps you grow. You can grow a few people like that but in an enterprise, you can’t grow multiple careers like that. This can be frustrating and dissatisfying for some employees, which also contributes to the turnover rates,” says Pawar.
So, while talent retention is challenging, the advertising industry has also failed to recruit and build talent up from the grassroots levels. “As an industry, we have not created a catchment in the smaller towns of India. There’s a lot of creative, writing and art talent in the country. But we are busy poaching from one another. So, the same talent pool is being circulated,” says Kamath.
However, the bigger roadblock in hiring trainees and freshers is the low salaries that the industry pays. Graduates from decent business schools take up finance and marketing jobs that offer good money. “How many agencies can pay Rs 10-12 lakh annual packages to freshers,” Kamath asks, adding that the industry salaries are 50 percent of these numbers.
To be sure, the advertising industry’s changed structure is also responsible for its current financial state. Jasani says the agencies are getting squeezed as clients keep reducing the fees paid to them. “It’s funny how they demand the best talent to work on their business but refuse to pay for that talent which is reflected in lower fees,” he says.
Pratik Gupta says even media commissions have plummeted. However, he blames the industry for agreeing to do business for such poor payments. “Clients keep beating down the rates as there is another agency which will pick the business for a lowly sum. What we need is to stand up as an industry and seek better business terms from clients. We are in the people’s business and still cannot afford top-class talent,” says Gupta.
The former CEO of a creative large agency who was quoted earlier says that ad firms are making less money as brands now split their marketing and communications budgets among multiple agencies. “Earlier, an agency got 90 percent – 95 percent of a client’s mar-com budget. Today, one agency gets not more than 25 percent to 35 percent at the most,” he says.
“If agencies are to attract and nurture that talent then they need to get their clients to pay for them. It’s a Catch 22 situation that people don’t really want to address,” says Jasani.
But it’s not all gloom and doom. By creating a supportive and nurturing work environment, offering continuous learning opportunities, and providing a clear growth path, agencies can attract and retain top talent in this competitive market, Jasani says.
Meanwhile, Dentsu has just launched the Next Generation Council which brings together its best talent from among the very young employees to give them a voice in the agency, to be part of shaping its culture, input into the strategy of the organization, input into its policies, both internal and client facing, and disrupt them with their new-age thinking.