Close-Up: Are ad agencies out of step with the real world?

In age, race and gender, adland's workforce doesn't reflect the wider picture across all UK industries.

Although anecdotal evidence seems to suggest that agencies are continuing to shed considerable numbers of staff, last week's IPA Agency Census presents a rather different picture. In fact, it claims that 2004 saw an 8 per cent increase in the ad industry workforce.

The IPA's annual survey, which has been running since the 60s, is designed to provide an accurate picture of the employee base among its member agencies.

As well as measuring staff numbers and their ethnicity, age and gender, the survey has added a category this year to gauge staff turnover.

Some of the figures need to be viewed with caution - staff levels rose from 14,036 in 2003 to 15,190 in 2004, although the number of member agencies also rose from 220 to 234.

But Hamish Pringle, the director- general of the IPA, is still optimistic.

"The number of member agencies has increased, so it's not a like-for-like comparison. But the figures still indicate that agencies are rehiring. As other reports, such as Bellwether, have shown, the market is recovering after the recession," he says.

This recovery doesn't seem to have been felt in the mainstream creative agencies, many of which are still making redundancies. Clearly, some agencies are faring better than others. Pringle thinks the improved figures most likely come from the inclusion of direct marketing and digital agencies in the census.

Certainly, the creative departments are still feeling the squeeze - staff in this discipline now make up just 12.9 per cent of the industry total and their numbers are the lowest they have been since records began seven years ago.

Andrew McGuinness, the chief executive of TBWA\London, is quick to voice concern: "This figure sounds a warning. It's easy to retrench creatives but we need to remember we are not service houses and that creative is the heart and soul of the industry."

Something that has remained consistent is the youthful face of adland - the mean age of agency employees is 33.6. A staggering 48 per cent of the advertising workforce is under 30, with only 6 per cent over 50. Of the total UK workforce, the majority (38 per cent) fall into the 35-49 bracket and 25.6 per cent are over 50.

McGuinness agrees that the agency world has been slow to recognise the value of experience. He says: "Hiring the young is an agency habit but we are out of kilter with the rest of society where the zeitgeist is about people working until they're older. We are at risk of dislocating with the society we are there to reflect."

Another perennially contentious area, and one that the IPA has been trying to address, is adland's number of ethnic minority employees. The figure stands at 5 per cent. This may look small but is fairly representative of the UK population, which is 8.6 per cent ethnic minorities, with an 8.3 per cent ethnic working population.

Ray Barrett, the creative director at Barrett Cernis, who has been spearheading the IPA's ethnicity drive, believes the ad industry's figure will continue to improve. "There are signs that our recruiting drive is beginning to have an effect. Eleven per cent of IPA stage-one attendees were from ethnic backgrounds," he says.

One of the industry's success stories has been the inclusion of more women and the gender split is now almost equal. The figures don't look as impressive, however, when you examine female seniority - only 26 per cent make it to management level and 15 per cent to the top management jobs. Pringle argues that this is not unusual for any industry. "It's all about life choices rather than women being excluded from the top jobs," he says.

The figures for agency churn, the new category, look bad, with a 15 per cent average level of turnover and 8 per cent of agencies recording figures double that.

But Mark Lund, the chief executive of Delaney Lund Knox Warren & Partners, is not too concerned: "Hard-line employers such as McKinsey want a 10 per cent turnover. People change and so does the company and it's unlikely that after a year, 100 per cent of its employees will still be suited to it. The agency churn is perhaps a little higher than it should be but it's not massively out of step."

While the advertising industry's age profile is out of kilter with the rest of the UK, closer analysis and comparison with a wider UK industry census reveal that this year's IPA figures are perhaps not as sensational as a first glance would suggest. As Lund concludes: "There's the feeling that advertising is this white, middle-class, male-dominated industry that hates women and ethnic minorities but this ghetto-esque image is not actually the case."

PERCENTAGE OF STAFF BY CATEGORIES

CATEGORY 1998 1999 2000 2001 2002 2003 2004

Chairman/CEO/MD 3.1 3.1 3.0 2.9 3.2 3.0 2.8

Other agency management - - - - 3.4 2.2 2.8

Account handling 23.7 22.8 20.8 23.0 22.9 20.6 22.5

Account planning and

research 4.8 5.8 5.1 6.2 4.8 6.6 6.6

Media 14.5 14.9 17.6 16.5 13.8 18.0 16.6

Creative 14.6 14.8 14.0 14.3 16.4 14.0 12.9

Creative services 9.2 8.5 9.4 7.5 7.3 6.8 8.6

TV production 4.1 4.5 4.1 4.2 3.3 3.5 3.0

New business, marketing

& PR - - - - 2.2 1.9 1.9

Source: IPA Agency Census.

Topics