IPA ADAPT: Reducing staff churn drives performance in the talent wars
A view from Dominic Mills

IPA ADAPT: Reducing staff churn drives performance in the talent wars

Agencies that can reduce churn rates will consistently outperform their competitors, and achieve better commercial and creative performance. But addressing churn rates is only part of a wider strategy agencies need to adopt to attract and motivate the right talent in an increasingly competitive environment, writes Dominic Mills IPA Talent Adaptathon Report

The real costs of staff churn are significantly greater than they might appear, and constitute the single largest drain on agency performance, former Vivaki CFO Sydney Hunsdale told the Institute of Practitioners in Advertising (IPA). 

She quoted a study estimating that the cost of staff turnover in the media and advertising industries was approximately £184m a year.

"Agencies with higher retention rates consistently outperform those with churn," Hunsdale said. "They are more competitive, more efficient, deliver greater growth and greater profit."

Hunsdale, also a former global chief operating officer for Razorfish, was speaking at the IPA Talent Adaptathon yesterday, October 7th. The event was designed to explore how agencies can better compete for talent, including attracting recruits that reflected the cultural and ethnic make-up of society and with the right creative and technical skills, as well as retention.

Attended by more than 175 senior agency management, about half of whom were HR directors, the event was the final strand of IPA President Ian Priest’s ADAPT agenda designed to create a platform to improve commercial creativity.

"There is no doubt that, in terms of talent, we have to be less traditional, and more diverse," Priest said. He challenged agencies to look hard at how, and who, they recruited.

He asked: "Are we embracing diversity as much as we should? Shouldn’t our own workforces reflect the make-up of the audiences we are targeting? In terms of creative technology skills, can we compete with tech companies, the City or game developers? And in our focus on digital natives, are we also guilty of ignoring the wisdom and experience that staff over 50 can bring?"

Employer culture

If agencies are to win the war for talent, corporate psychologist and academic Dr Max Blumberg said , they had to put transparency at the heart of employer culture. "If you’re not transparent, if you’re not authentic, and if your leadership can’t win the trust of employees, you will not attract the talent you want," he said. 

Agency leaders also had to learn to manage organisations where different generations – from baby boomers to Gen X and Gen Y – had different sets of values. Baby boomers, for example, valued experience, lived to work and took a measured approach to risk. Gen X and Gen Y staff, he said, were more focused on competencies, were more likely to work to live, sought regular, constant, feedback and needed recognition and approbation.

To succeed, agencies needed to create a culture that was open, flexible, informal and entrepreneurial. "Leaders need to emphasise the ‘why’ before the ‘what’ to engage the younger generations," Blumberg said.

Blumberg urged agencies to spend money on training, learning and development. "Performance drives engagement," he said. "People who perform highly are more engaged, so the money should be invested in helping them perform better."

Motivations other than money

Like Blumberg, Hunsdale noted that base salary on its own was not a retention tool. "It’s better to create a such a great work environment that people don’t want to let go of it," she said, "but if money helps, use carrots. For example, raise the bonus possibility rather than loading it onto base salary."

She echoed Blumberg’s call for transparency, noting her experience of a bonus plan in which all staffers knew what was required to achieve it, and which was predicated on teamwork, generated a high return but was still self-funding.

Reducing staff churn must remain a major aim of agencies, she said. "It can take new employees between 20 weeks and seven months to reach peak performance."

"If you factor in time, the effects on client and team relationships, and lost productivity, the cost of replacing entry-level staff costs around 30-50pc of their salary, 150pc for mid-level staff, and between 200-400pc for senior staff. In addition, your HR team spend their time recruiting, not training."

To maximise retention, Hunsdale said, agencies should also set staff turnover goals, rewarding senior management for achieving KPIs, and ensure that the finance and HR departments were "joined at the hip".

"People are your asset," she said, "but if they’re not managed well, they are a liability, and they become someone else’s asset."

Positive action on diversity

Sandra Kerr, national campaign director of Race for Opportunity, a unit of the Business in the Community charity, told delegates that there were significant advantages to be gained from recruiting a racially and culturally diverse workforce. 

One in four schoolchildren were of BAME origin, Kerr said, and one in eight of the current working age population. Employers that reflected this in their workforce would see benefits. "If you have a diverse workforce," she said, "you reduce the risk of ‘group-think," she said, "and you can avoid cultural blind-spots." Both issues are particularly pertinent to advertisers trying to reach minority audiences and to mass markets in the future.

She urged the industry to take a pro-active stance, including benchmarking, mentoring and mapping out career routes and ladders into the industry.

Get involved on Twitter with the hashtag #ipadapt

Visit the IPA’s ADAPT hub www.ipa.co.uk/adapt where news from the events as well as the findings, photos and videos from this Adaptathon will be posted.