The Talent Crisis: Where have all the graduates gone?

They're a fickle lot: some students are shunning adland because the money isn't good enough, while others are looking at treading a more worthy career path.

Ask any chief executive of any ad agency in the UK about the quality of graduates joining the business these days and you'll witness a pained expression cross their face.

Nostalgia undoubtedly plays a part in the current vogue to bemoan the calibre of the industry's more recent recruits - a kind of "it wasn't like that in my day" attitude.

But is today's graduate intake as robust as it used to be? Most observers concur that it's not a quality issue, but is more of a quantity issue. Generally, there's a feeling that the quality of graduates is not a problem - yet.

Indeed, cast your mind back to the graduate intake at Ogilvy & Mather in the early 90s, when CHI & Partners' Johnny Hornby rubbed shoulders with Rainey Kelly Campbell Roalfe/Y&R's outgoing chief executive and creative director James Murphy and Ben Priest respectively. There was also CHI's Nick Howarth, Freud's Tom Vick and MindShare's Nick Emery. This was one agency that was attracting several of the industry's future leaders, all at the same time.

IPA figures suggest that about 500 graduates join the business in a good year (and the current advertising economy renders this a good year). This amounts to about one in every six written applicants getting a job. Although not terrible, the numbers suggest that agencies aren't exactly overwhelmed with choice.

Hamish Pringle, the director-general of the IPA, points out that many of the applicants get offers from more than one agency, also suggesting there's not enough talent to go around.

So where are all the other top graduates going? The answer, more or less, is the City. Starting salaries in the Square Mile regularly top £35,000, and often offer the repayment of any debt incurred while at university. Accountancy firms offer in the region of £30,000. Advertising agencies, on the other hand, offer £19,000 (and media agencies even less).

This kind of salary inflation has been driven by Britain's healthy economy. Everybody is chasing the best graduates. As Jeff Goodman, the director of careers at Bristol University, says: "It's a strong employment market. There's a lot of competition."

His view is echoed by Sharon Maguire, the careers advisor at Edinburgh University. She says a lot of employers are complaining about a lack of high-calibre graduates, not just advertising agencies.

Damn that strong economy, because another of its features is the robust housing market. Even if current graduates were not particularly motivated by the trappings of wealth, the cost of getting on to the property ladder makes a good starting salary a more serious consideration than it has been for generations.

Rory Sutherland, the vice-chairman at Ogilvy Group, believes agencies need to reflect very seriously on the housing issue. After all, most agencies - and, therefore, most starting jobs - are in London, where the average house price is more than £300,000. "We need to offer people the choice of working outside of London. New electronic means of communication no longer require everyone to be in London all the time," he says.

Pringle would like to see a unilateral increase in the starting salary for graduates going into agencies. He believes that by choosing not to offer more from the outset, agencies are not only deterring graduates from applying, but they are also pushing them into jumping to a rival agency once they've got two years' experience under their belts in order to secure a salary increase. Sutherland laments the departure of graduates after only a few years, and refers to Ogilvy's graduate programme as a "donation of talent to the rest of the industry".

The graduates themselves are clear that advertising salaries start off low, but have the potential to rise significantly. Peter Lindsay, a 2007 graduate from Cambridge, thinks: "In the long-run, it certainly can be a well-paid career, although from what I've heard, the starting salary can be quite low." Peter Warner, a Culture, Media and Communications graduate from Surrey, adds: "I wouldn't expect to enter the industry as a graduate and immediately start making a lot of money. The opportunity to make lots of money is there, but perhaps the wages to begin with are lower than a lot of industries."

But for many graduates, neither advertising nor banking are attractive options. Edinburgh's Maguire talks about the ambitions of "Generation Y". They're young people who want to contribute to the betterment of society, but want to enjoy themselves while doing it. Not for them the selfish world of trading shares or flogging FMCG products. Instead, some of the best brains want to work in marine biology, or for lobby groups. Again, this is a symptom of a robust economy.

Some young people still living off the wealth of their more financially ambitious parents have yet to discover the disadvantages of a low salary. Maguire lends strength to the theory. She believes graduates' job applications are cyclical. At the moment, the vogue is for improving the planet, but this is new. She says: "Ten years ago, it was about big business and making money. Twenty years ago, it was public sector. Things are cyclical."

She adds: "There's a push among the student population for ethical careers. If they're thinking about advertising, it might be for government, but they seem a little less keen on the industry as a whole."

Not only do graduates want to be a force for good, but some also see a job in advertising as doing precisely the opposite. It seems advertising's image problem, already rendering it the victim of junk-food ad bans, is also damaging its graduate intake.

The words of Neala Hickey, who is graduating from Sussex University with a degree in Philosophy and English Literature this year, are somewhat alarming: "I would stay away from advertising because I don't particularly want to be responsible for persuading masses of people to buy things they either can't afford or don't need. Not only this, but I'd also be encouraging people to buy mass-produced goods, environmentally unfriendly goods, or exploitatively produced goods, for my own career and financial gain."

Demonstrating to students that advertising makes a massive contribution to the economy, and that a job in advertising is actually an opportunity to have a positive influence on business is important. Moray MacLennan, the president of the IPA, has made taking this message to the wider population his mission. "Advertising is a force for good, not just because it creates wealth, but also because it provides choice and improves quality. The UK industry is world-beating, and something to be proud of," he says.

Sutherland believes a positive message needs to get out there. He says: "I want to hire people who want to change the world. We need to show them they should do it in partnership with business, and not in opposition. Ford and McDonald's have done a better job at democratising than Lenin or Marx."

"Generation Y" is not only showing an interest in ethical careers, but it is also very keen on a comfortable work/life balance. As anyone who works in the business knows, that's not really an option in advertising. Sutherland has radical ideas on this. He thinks Ogilvy should look at offering a four-day, 40-hour week, believing that he does his best thinking at the weekend anyway, and that extending it would render him more productive.

That might not be possible, but it represents the kind of radical rethink the industry needs to undertake in order to remain relevant to today's graduates. As Sutherland puts it: "Understanding 'Generation Y' is our job."

Advertising's trump card is its sense of fun, something that needs to be protected in these days of procurement directives and time-sheets. If the best graduates have one reservation about joining the City, law firms or accountancy practices, it's that they know they risk a very boring working life.

And there's still a sense among today's graduates that advertising is for interesting people. Maisie Hull, a Law graduate, says: "I imagine those who work in advertising to be creative thinkers, and those who 'think outside the box'." Laura Sturt, fresh out of the University of Plymouth, thinks advertising people are "highly dedicated, innovative and creative people".

Network agencies can offer students something many of them covet: the opportunity to travel. And Sutherland adds that a posting overseas might not only satisfy young people's wanderlust, but it offers a tidy way around the difficult London property market.

The best way for potential recruits to get a sense of advertising's dynamism, however, is to offer a robust placement scheme. Cilla Snowball, the chairman and chief executive of AMV Group, says: "Trainees are much more likely to have direct or relevant experience as well as a keen interest. It also means we have to offer good work experience provision, all year round." She adds that this gives AMV "access to the talent of the future".

For the advertising industry to continue supplying the best consultancy to its clients it needs to keep attracting the best calibre graduates. But that is only step one. Next week, we look at the problems of keeping those graduates committed to a career in advertising throughout their working life.


- Take up a consistent presence at milkround fairs - careers officers recommend that agencies set up stalls every year

- Offer paid holiday placements - lack of grants mean students are under pressure to earn in their holidays

- Support the IPA's efforts to improve the advertising industry's image in the public eye - demonstrate the positive effects of working in advertising

- Promote the fun side of a career in advertising - agencies can't compete with the City in salary terms, but they can trump it when it comes to offering an engaging career option


Degree: Psychology, University of Plymouth

Grade: 1st

- Do you want to work in advertising?

"Yes. Advertising is a fast-moving and exciting world, where analytical thinking and making presentations, skills which I have developed while doing my degree, are used."

- Do you think advertising is an ethical career?

"Advertising is as ethical or as unethical as you want it to be."


Degree: Human Sciences, University of Oxford

Grade: n/s

- Do you want to work in advertising?

"It has never appealed to me greatly."

- What kind of people do you think work in advertising?

"Dynamic, artistic, intelligent people."

- Do you think it is a well-paid career?

"I believe it is not so well paid at the beginning, but there are opportunities to earn more later in your career."


Degree: Law, University of Southampton

Grade: 1st

- Do you want to work in advertising?

"Advertising would be a very rewarding, fast-paced career, which I may well consider in the future."

- Do you think advertising is an ethical career?

"On the whole, yes. If you fall for it, to some extent, then surely this is the buyer's own mistake. But I do think that the people behind the ads have to be responsible, though."


Degree: Culture, Media and Communications, Surrey

Grade: 2:1

- Do you want to work in advertising?

"Yes. It is an incredibly influential industry. The chance to have an internationally based career in an ever-more globally oriented world and work with other cultures is also appealing."

- Has anyone ever spoken to you about an advertising career?

"When I was at school, I did my work placement at Y&R in Camden."


Degree: Music, University of Cambridge

Grade: Starred 1st

- What kind of people do you think work in advertising?

"I think it's a particularly young industry, with a large proportion of the workforce under 30. It requires a sharp business mind, and someone who is both flexible and well organised."

- Is advertising an ethical career?

"I'm not sure how valuable a role it plays. I would find myself working towards goals that don't appeal."


Degree: Textile Design, Nottingham Trent University

Grade: 1st

- Is advertising an ethical career?

"It is not unethical because it's a necessity in today's consumer society, but I do feel that it could exploit the consumer by enforcing false wants and needs on them."

- What kind of people do you think work in advertising?

"Confident, loud and outgoing people. I imagine them to be quite pushy people."