You will have read about the Great
Resignation. The global pandemic has increased the rates of resignation as
people re-evaluate their lives and careers. And while the great resignation
appears to vary in degree across markets, there is enough anecdotal evidence it
is impacting the advertising industry, particularly in established markets such
as the USA, Canada, the UK, and Australia.
After a decade or more of flat or only
moderate salary increases in the advertising industry, the great resignation is
causing a perceived talent shortage, leading to increased salary costs to
retain or attract talent to the agencies. Increases of 20%, 30% or more have
been thrown about, as agencies fight to keep talent, and compete to attract
talent from a diminishing pool.
This can only mean upward pressure on
agency fees, as agencies try to pass on these increases to their clients
through hourly rates and retainers. So, what should marketers be doing? You
could ignore it and expect your agency to absorb the cost and you may be lucky
you do not suffer a rapid increase in agency staff turnover.
A better option is to understand exactly where your
current agency fees sit compared to market and prepare yourself for the
conversation that is coming. This month we are sharing the information you need
to make more informed decision on understanding your agency fees and how to
manage them in the face of the Great Resignation.