PERSPECTIVE: IPA's census reveals job losses were just one side of the story

As redundancy's scythe hacked through agency departments last year, most managers will have become all too well versed in UK employment laws. And as Nabs was punched into the speed-dial of hundreds of phones, losing your job lost its stigma and became a key feature of the industry's year.

By now it's a depressingly familiar story. But the IPA's new industry census tells a different tale. It seems things weren't quite as bad as they felt. The relatively modest 2.5 per cent decline in UK agency numbers last year is surprising. Compare this with figures for the US, where, for example, the top five agency groups between them lost more than 1,500 people, the total number of employees in US advertising was down by more than 7,000 and the top 40 US agency groups showed a slump in staff levels of 8 per cent.

Scrape away at the IPA figures and some interesting facts are revealed.

As you might expect, the larger UK agencies cut more jobs than the smaller ones, many of which were actually in hiring mode last year. The number of people employed by agencies with incomes above £18 million was down by 4 per cent; for mid-sized agencies, with income between £3 million and £18 million, staff numbers were up 4 per cent.

So what should we make of all these statistics? That the bigger agencies had a rougher time in recession? Well, to a certain extent, yes. Nimbler, newer independent shops piled on billings and people and proved attractive to some larger clients disillusioned by the way shareholder exigencies are beginning to shape big agency cultures.

But the redundancies at the larger agencies were often less a knee-jerk response to client losses and more a long-overdue tightening up of agency structures. Painful as the culling may have been, there is already a tangible sense that a necessary hygiene has taken place. The economies of scale demanded by the holding companies sliced away at the flabbiness of many London agencies and to good effect; most of the redundancy-makers I've spoken to over recent months confess they wouldn't rush to rehire many of the people they've parted company with. The very best talent is retained at almost any cost.

So in many respects, the IPA employment figures reflect a healthier industry; the smarter, smaller agencies are growing, the bigger agencies have chipped away at some dead wood. The real rankness remains in the actual make-up of the workforce, the number of senior women and the ethnic diversity.

There will be people out there groaning as they read this and, yes, they are hackneyed issues. But improvement is too slow. The IPA is now planning to track demographics and that really should give the industry something to aim for if it is to emerge as an all-round healthier business to work in for those still on the payroll.

- Caroline Marshall is on maternity leave.

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