EDITORIAL: Hold on to talent before wielding recession axe

Britain’s advertising agencies are continuing to pay the price of the last recession. That much is clear from the Willott Kingston Smith study revealed to Campaign readers last week. It told a story that senior agency managers everywhere already know by heart: salary costs are getting out of hand again and are hurting profit margins.

Britain’s advertising agencies are continuing to pay the price of

the last recession. That much is clear from the Willott Kingston Smith

study revealed to Campaign readers last week. It told a story that

senior agency managers everywhere already know by heart: salary costs

are getting out of hand again and are hurting profit margins.



The root of the problem lies in the short-sightedness that afflicted the

industry during the last big squeeze of the early 90s. As the business

contracted, agencies became obsessed with firings to such a degree that

they forgot all about hirings. Now, the failure to remain committed to

recruitment and invest in training is taking its toll: there is a skills

shortage at the top and, as a consequence, inflationary pressure on

wages.



These are the facts and there really isn’t much anyone can do about

it.



But already a new recession is looming. Agencies would do well to

reflect that, while they can’t do much to prevent its immediate impact,

they can ensure that the hangover doesn’t last as long. Good recruitment

practice, however, is not the complete remedy. Just as important is the

issue of staff retention: the ad industry still loses a frightening

proportion of its young recruits and part of the reason for this is

surely the over-cautiousness shown, particularly outside the creative

department, when it comes to giving important tasks to ’rookies’.



The industry’s status is such that it continues to attract bright, young

people. The big challenge - which is even bigger during hard times, when

mistakes can be so much more costly - is to use them. If it doesn’t, the

industry will lose them and will be much the poorer for it. Again.



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