The World: Insider's View - Russia

Seven years ago, Russia's ad industry was reeling from a recession. Now, budgets and salaries are spiralling, and keeping talent has never been harder, Ella Stewart writes.

During the Russian financial crisis in the summer of 1998, ad budgets were slashed and many in the industry were made redundant. At BBDO Moscow, we resolved to take the long-term view and cut salaries rather than let people go. Seven years later, the situation that caused me so many nights' lost sleep is now unimaginable.

The Moscow advertising market has been growing at a hair-raising 30 per cent a year since 2000. This, of course, has many benefits, but finding and keeping good staff has never been harder. The top Russian agencies are struggling to capture and retain people and we have a genuine talent war on our hands.

Part of the challenge is to balance staff demands for Western pay levels with the client expectation that budgets and fees will be lower than in other parts of Europe. This tension is becoming ever more intense as the competition between agencies inevitably leads to financial packages spiralling upwards: one of our strategic planning directors was recently enticed away for two-and-a-half times her salary.

Even more extraordinary was the case of a young, inexperienced copywriter who applied to us. He wrote a brave essay, setting out his ambition to be a creative director, and we decided to take him on in a junior position where he could learn while we assessed his talents. His performance was mediocre and the role didn't work out, but a competitor offered him a job on 15 times what we were paying him.

The talent shortage is compounded by the lack of formal education in advertising skills available in Russia. University courses and academic study in our sector have barely begun, so everyone has to be trained by their agency.

Agencies have taken various approaches to this issue. Most have given in to fuelling the salary escalations, at least to some degree.

Others have focused their efforts on making their agencies more enjoyable places to work and embracing flat management structures.

The lack of formal education makes it possible to dramatically change roles in Russia. Cases abound of receptionists becoming client service directors and of people moving between specialisms as their true talents emerge.

Of course, despite these efforts, it's hard for staff not to consider opportunities to more than double their incomes. For those of us in management, industry growth is a double-edged sword.

We have to work on several fronts: to drive the growth of training and education in advertising; to balance client and staff expectations about remuneration and, most importantly, to stabilise the development of our industry. The cutbacks in 1998 might have kept us awake at night; little did we realise rapid growth would have the same effect.

- Ella Stewart is the chairman and chief executive of BBDO Moscow group.