Should agencies increase salaries?

Is it time to finally stop talking about the recession? People working in the creative sector have suffered years of pay freezes, increased workloads and low confidence about job prospects.

The feeling is that the outlook for 2014 may be brighter.

The latest IPA Bellwether Report showed the fifth successive quarter of growth, with a net balance of 11 per cent of companies increasing their advertising budgets during the last three months of 2013. This suggests businesses’ concerns about the economy are starting to subside. The recruitment company Reed believes this renewed confidence may shift power back to employees, as greater job security and opportunities encourage workers to consider their next career move.

In a poll of 2,500 employers and employees, Reed found that 89 per cent of marketers and creatives felt secure in their roles and that 42 per cent of employers are worried about losing talented individuals. It also discovered that two-thirds of employees in the marketing and creative sectors have not received a pay rise in the past 12 months. So, should agencies look to retain staff by offering higher pay this year?

Tell us what you think in our poll below: do you expect a salary rise this year?

Agency head

Kate Waters, partner, Now

"My rule of thumb is to apply a simple principle to pay-related questions: that people should get fairly rewarded for the job they do. So, as employers, I think that means we should do what we can to look after our people and help them keep up with the cost of living – after all, no-one wants to work for an employer that inadvertently makes you poorer. But, the other implication is that any further rise should be based on merit. That way, people know when they are valued and are doing well, they can be confident that they are being paid at a rate the market thinks is fair, and the stars who add real value to a business will be less likely to feel the urge to explore pastures new."

Creative head

Peter Souter, chairman and chief creative officer, TBWA

"What we do for a living is pretty special. How many other people get paid for coming up with cool and crazy and sticky ideas? What other industry can see you in New York one day and Shanghai the next? These may well be cast off as aspirational and some do go a whole career without experiencing them, but they are a juicy carrot. We just need to make sure that our staff know that this stuff can happen to them. Of course, we know that money really does matter and incentives can only go so far. Meritocratic pay rises should happen, but we must never forget the power of opportunities – they’re cheaper than a wage increase but can be worth so much more."

Agency head

Jonathan Trimble, chief executive, 18 Feet & Rising

"The big challenge every agency will face is getting hold of the best talent as the economic recovery kicks in. The expected revenue per head has crept up to £120,000 from £100,000, while staff costs have declined from 60 per cent to 50 per cent. You can’t keep squeezing that. It is important to reward staff for good work, but money is not the way to motivate them. People tend to ask for more money if they are feeling unfulfilled. Everyone should have a tailored development plan to help them reach their potential. Agencies also need to prune the people who have got stuck. Agencies often overpay people who should move on."

Recruitment specialist

Simon Shroot, managing director, Sylex

"Yes, agencies should increase pay levels. Overall, basic salaries in the media sector are the same as they were 15 years ago. The power is definitely in the hands of employees. There are more jobs, higher levels
of confidence and a smaller talent pool. During the recession, the industry hired fewer graduates. Those who were hired now have experience and take their pick of the best jobs. Agencies should have open conversations with their employees and make sure their pay is in line with the market. Salary isn’t everything, but it is one of people’s priorities at the moment as the cost of living increases."