PERSPECTIVE: Top-earning bosses must respect value of employee morale

It's that time of year when industry observers start picking through agencies' annual figures to unearth the revenue truth behind the new-business hype and expose those agency businesses that are run about as well as Johnny Vegas doing the London Marathon.

Most fun of all is the ranking of the industry's highest-paid directors.

Look out for Campaign's annual "Agency Performance League" at the beginning of October for the full lowdown, but here's a sneak (if unsurprising) preview: Sir Martin Sorrell's 2002 packaged nudged the £2 million mark, Aegis' Doug Flynn (admittedly rather less well-known than Sorrell for services to the communications business) clocks in at £1.15 million, and Cordiant's former chief, Michael Bungey (hopefully for the last time in the history of our tables), pocketed just over £650,000.

None of these executives are likely to have much need for the sort of staff soothers outlined in this week's feature (p18). When your basic salary tops the half-million mark, a free breakfast is a bit irrelevant. But as our very unscientific analysis of the perks offered by London's agencies suggests, these eye-watering salaries are not everything.

Sure, an extra "happy hour" in the agency bar or troop-rallying memo from the warm-hearted big boss in the New York office is hardly much compensation for a pay freeze. But agencies are clearly more aware than ever that these little extras can help keep staff motivated when working hours and stress levels are growing faster than salaries.

In many respects there's little to choose between agencies: a free breakfast here, an extra per cent into pensions there. A duvet day will not a career decision make. Where such benefits do make a difference is in creating a bond of loyalty and a genuine team spirit that helps curb stress and make long working days more palatable and, crucially, fun. And they can keep the agency in a healthy and energised frame to capitalise on any upturn.

Some agencies genuinely manage to pull this off - it's something you can sense from a pew in reception and endures even after a few hours of heavy drinking in the agency bar. Others will never master staff morale, no matter how generous the holiday allowance.

What makes the difference, of course, is the person, or people, leading the agency. The problem with recessions is that they tend to shackle the chiefs and grind them down with relentless cost-cutting. But the best leaders retain the energy, vision and commitment to take their people with them without the need for big bonuses to buy loyalty. If they also happen to pop up among the industry's highest-paid directors, there's little to argue with. But for all those employees currently being soothed with French Fridays and free cereal and toast, this autumn's pay and profitability leagues will make fascinating reading.

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