Episode 335

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Today, we’re delving into a topic that’s been on my mind, and on the minds of agency owners in general, for quite some time: employees.

No matter where you are or how big your agency is, staffing is a challenge for everyone right now. Every time the subject comes up during my conversations with agency owners, there are two frustrations in particular that bubble to the surface time and time again:

  1. It is hard to find and attract qualified agency talent
  2. It is hard to retain the qualified and talented people who already work for us

To tackle those frustrations, let’s explore several things agencies can do right now to counter the rival opportunities your current team members are being poached and approached with on any given day (and yes, it is happening.) We’re also going to get to the heart of what it takes for agencies to create an environment that is attractive to new employees, and a culture that makes your current team want to stick around — and not just for a year or so.

For 30+ years, Drew McLellan has been in the advertising industry. He started his career at Y&R, worked in boutique-sized agencies, and then started his own (which he still owns and runs) agency in 1995. Additionally, Drew owns and leads the Agency Management Institute, which advises hundreds of small to mid-sized agencies on how to grow their agency and its profitability through agency owner peer groups, consulting, coaching, workshops, and more.

A big thank you to our podcast’s presenting sponsor, White Label IQ. They’re an amazing resource for agencies who want to outsource their design, dev, or PPC work at wholesale prices. Check out their special offer (10 free hours!) for podcast listeners here.

Agency Employees

What You Will Learn in This Episode:

  • How agencies can attract new, qualified talent
  • What it takes to keep your agency employees around for more than a year or two
  • What agency employees are looking for in a great employer, and how to be one
  • How to create an agency environment that is attractive to both new and current employees
  • How to utilize other tools for retention instead of relying solely on wage increases
  • Why you should be sharing your agency’s vision with your employees as often as possible
  • The massive value career paths offer agency employees — and owners too
  • The importance of cultivating your culture not for, but with your employees
“If you don’t think your people are being poached or approached, you’re crazy. It’s happening every day, everywhere.” @DrewMcLellan Click To Tweet “For every right solution for you as an agency owner, there is a right solution for your agency employees.” @DrewMcLellan Click To Tweet “Money is not the thing that motivates everyone — we know this.” @DrewMcLellan Click To Tweet “Your employees want to know what they’re working towards a bigger cause than just to make money this month.” @DrewMcLellan Click To Tweet “Our work is collaborative, and it is very difficult to collaborate with strangers.” @DrewMcLellan Click To Tweet

Ways to contact Drew McLellan:

Tools & Resources:

Speaker 1:

If you’re going to take the risk of running an agency, shouldn’t you get the benefits, too? Welcome to Agency Management Institute’s Build a Better Agency Podcast, presented by White Label IQ. Tune in every week for insights on how small-to-mid-size agencies are surviving and thriving in today’s market. We’ll show you how to make more money and keep more of what you make. We want to help you build an agency that is sustainable, scalable, and if you want down the road, sellable with 25-plus years of experience, as both an agency owner and agency consultant, please welcome your host, Drew McLellan.

Drew McLellan:

Hey, everybody. Drew McLellan here with another episode of Build a Better Agency. Thanks for coming back if you are a regular listener. If this is your first episode, welcome to the show. We’ve been doing this, boy, it’s almost seven years now, so we’ve got plenty of episodes for you to go back and listen to, and hopefully, you’ll enjoy today enough that you’ll come back.

All right, so this episode is one of my solocasts. As you probably know, as the name might suggest, that means it’s just me, so no guest today. I am here just with you talking to you about something that I’ve been chatting with a lot of agency owners about, something that’s on my mind, something that I want to make sure that you are informed about, and so we’re going to do that today, and then I’ll be next week with another guest.

Before I tell you what I want to talk about today, I just want to remind you if you subscribe to our newsletter, you already know this, but I want to remind you that we have added a new workshop. We’ve added a workshop into our calendar. The Mercer Island Group workshop, Sell With Insights, I think it’s maybe our fifth time of running that workshop, and every time we offer it sells out because we cap it at 50 people. The reason why it sells out is because of the results of that workshop. We’ve probably had about, I don’t know, I’m going to say 125 people go through the workshop, so that’s probably maybe a hundred agencies because a lot of people bring a second person. Those hundred agencies have applied what they’ve learned and they collectively have earned and won more than $65 million of new AGI by using what they learned at this workshop. That’s just the ones that tell me about it, so I know that’s only a fraction of what’s happened.

But my point is that many agencies go to this workshop, and within six months or a year land the biggest client in their agency’s history. It sells out for a reason. It is spectacular content. It is practical that you can go back and apply. In fact, we’ve had several people in the workshop who were right in the middle of either an RFP response, or getting ready to do a pitch, and as they were listening on day one, they went back to their hotel room that night and changed their entire deck, or their RFP response based on what they learned, and so I am telling you, this workshop is killer.

I can say that because I don’t contribute a lot to it. I don’t teach it. The folks at Mercer Island Group do. They are just generous and smart. If you want to really goose up your new business game, this would be a great workshop. It’s July 19th and 20th in Chicago. You can register for it online at agencymanagementinstitute.com, just go under the How We Help tab at the top of the website, drop down to workshops, and you’ll see it. You’ll see it there. Again, Sell With Insights, July 19th and 20th, if you really want to accelerate your new business win rate.

All right, enough of that. Let’s talk about the topic of the day. I would say it’s actually the been the topic of the last year and that is employees. Every spring, and depending on where you live, it may not feel like spring right now, but every spring, at all of our live peer groups, I do a report, a trends report, just talking about the things that I’ve been seeing, the things that I’m anticipating, and just trying to give my folks a heads up on where things are going.

One of the trends, or actually, it’s two of the trends we’re talking about that are related are, number one, that there has never been more new business opportunity and activity in several years, that lots of agencies are getting many at-bats, many invitations, more RFPs, more requests for proposals, not from a formal RFP process, but just people asking for bids or proposals. There’s a lot of there, there’s a lot of reasons for it, which I get into in the trend report that I’m not going to get into today, but lots of opportunity.

However, many agencies are actually choosing to pass on those opportunities, not because they’re not good opportunities, but because you’re afraid you can’t staff for those opportunities. I think probably the biggest burden now for many of you is the staffing issue. You want to hire, you have open positions, and you can’t find the people. I don’t care where you live, I don’t care how big you are, this is a challenge for everybody right now.

In the conversations I’m having with agency owners, one of the things we’re talking a lot about is yes, we’re talking about the frustration of trying to find new employees, but we’re also talking about the importance of keeping the employees that you have, and what is it that employees are looking for that makes them take a pass when they are headhunted, or poached, or offered more money? Because that’s also happening. I have agencies where, well, first of all, if you think your people aren’t being approached or poached, you’re crazy. It’s happening every day everywhere. It’s not just other agencies poaching them. It’s brands, it’s nonprofits, and it’s corporations, and it’s often people who can pay more than we pay, and so that becomes really a big challenge.

What do we do about this? What I want to talk about today is what employees are looking for in terms of what they feel like is a employer, and hopefully, that will help you recruit, but hopefully, it will also help you retain your people. That’s the conversation today, what should we be doing for our employees?

First thing I’m going to say is right now, there’s a wide variety of opinion about work from home, work in the office hybrid, fill in the blank. Some of you never left the office and have been working five days a week in the office since COVID began. Others still aren’t even back in the office and it’s been two years since COVID began. Most of you are somewhere in between where you have some sort of a hybrid schedule, whether everybody works the same days, or you’ve alternated, or you let people make their own choices.

Here’s what I will say is for every right solution for you as an agency owner, there is a right solution for employees. I have had agencies who lost candidates because they weren’t remote and that they would have to come into an office. I have agencies who have lost candidates because they were remote and they couldn’t come into an office, so you need to decide how you want to run your business. You need to decide if you want to have everybody in the office five days a week, if you want to have a hybrid situation, if you will never want to have an office again, and you want to stay virtual.

All of those are fine decisions based on what you care about and the kind of clients you serve or the kind of work you do. You are going to attract people who want that same work environment, so do not let your fear of recruiting go, “You know what? I really want to be back in the office, but we have three open positions and everybody wants to work remote, so I have to leave us remote, otherwise I’m never going to fill those positions.” That’s not true. It’s not what I’m seeing. You decide how you want to run your business and do it that way and you will attract the right employees.

Number two, what I want to say, and then I will get into what your employees are looking for, I do think hiring is getting easier. I would say in the fourth quarter of ’21 and this first quarter of 2022, agencies are getting more qualified applicants for positions and the salary demands are getting far less unreasonable, so I do believe things are lightening up. I believe that by the end of second quarter, hiring’s going to be a heck of a lot easier than it was last year, so hang in there, it’s coming. There’s a lot of reasons for it, which I’m not going to get into in this show, but just know that it’s going to get better.

All right, so let’s talk about beyond the work environment beyond the, “Do I get to work from home, or do I get to go to the office?” What are your folks looking for? As you might imagine, high on their list is a fair wage and benefits. As you know, we do a salary survey every year. You can grab that at agencymanagementinstitute.com under, I think, resources. You can find that, so you can see if you are paying in the ballpark of what other agencies are paying, your size and your region of the country. It’s North America, so it’s the US and Canada.

Number one, they want fair wages, that makes sense, and benefits, which are also outlined in the salary survey, but the benefits are health insurance. Most agencies pay about half of their employees’ health insurance, and they don’t pay for family. Health insurance, dental, vision, all the health stuff, ample time off, access to some sort of retirement account, an IRA or a 401(k), some sort of disability insurance, long and short-term disability. About half of you offer life insurance. Most people buy that in a bundle, short-term, long-term, and life insurance all bundled up. It’s super inexpensive and many agencies use the short-term insurance as their maternity policy as well, so that’s how they fund when one of their female employees gives birth to a baby. You obviously have to have other maternity resources if there’s not a natural birth, or it’s a male employee, but nonetheless, that’s one of the reasons.

All of that is table stakes. They want to be paid fairly and they want decent benefits. I am always astonished and really proud of agencies. I think we do a great job of this. I think we pay our people fairly. Especially for our size, I think we have a great benefit package, but I think there are some things you can do inside the fair wage and benefits package.

I had an agency owner who wanted to reward her one of her key employees and make sure her that she was really sticky and that she didn’t go away, so we were brainstorming ways to do that, and we decided we were going to create kind of a create-your-own-adventure version of compensation. Basically, this employee was going to get a base salary, and then we created this laundry list, and I’ll put it in the show notes, this laundry list of perks. One of them was a raise. One of them was free airline tickets. It was this huge shopping list, in essence, of benefits. Some of it was extra time off.

Then what the employer did, what the agency owner did was we assigned a point value to each thing on a menu, if you will, and so she went to the employee and said, “Hey, I’d like you to participate in building out your compensation plan. Not only am I going to pay you X, but you also have 500 points, and here’s the menu of where you can go shopping for the points.” For example, the raise was a raise she would’ve given this person, anyway, and there was a cap. You could only buy one of the raise units, if you will, so it’s not like the employee could use all of their points to buy raises and then get paid exponentially more than they should have been.

But anyway, the cool thing was on this list, almost everything on the list could be bought with points, Amex points, Visa points, wherever you collect points, which most of you do. I mean, and it literally was anything, everything from airline tickets, to a new wardrobe, to somebody mowing your lawn all summer, to the agency owner babysitting the kids for a date night once a quarter. I mean, we got really creative and the employee loved it because she got to customize part of her compensation based on what mattered to her. You know what? Money is not the thing that motivates everybody. We know that. For this particular employee, this agency was on one coast, her elderly parents were on another coast, and so she used a lot of her points for free plane tickets so she could go see her parents more often. Well, again, that didn’t cost the agency owner, anything, right? That was points that she was able to use, but it was a great retention tool for this employee.

I’ve had several agencies who have adopted this methodology and what they find fascinating is that no employee picks the same things, so this is something then the employee gets to do annually, right, for part of their compensation, just an interesting way to bring your employee into build part of their compensation so it’s very custom to them and it really scratches all of their itches. That’s number one interesting way to impact wages and benefits.

Another one is, and I’ve done this in my agency for many, many years, I have milestones. If you hit your five-year anniversary, your 10-year anniversary, your 15-year anniversary, and now I got to come up with a 20th anniversary because I have an employee who’s getting close to that, that you get a trip on me. It just keeps getting sort of more elaborate, if you will.

At five years, you get an extra three or four days off, you get three or four nights at a hotel, and two economy plane tickets anywhere in the US. At 10 years, you get five extra days off and you get five nights at a hotel, or six nights at a hotel, and then you get two plane tickets. Oh, and I give them spending money. At five years, it’s like $500, at 10 years, it’s $1,000. 15 years, they get 10 days off, again, 10 nights in a hotel, but now, at 15 years they can fly economy overseas, or they can fly first class in the US, and then I give them cash. Now, I’m going to have to come up with exactly what I’m going to do for 20 years, but it’ll be in that same vein. My employees love it. They get to take trips that they might not have ever taken and they know how much I appreciate them. Obviously, I write them a note, and I do other things to celebrate the anniversary, but they love these milestone trips.

Another thing some agencies do is they create sabbatical opportunity. The sabbatical opportunity is that typically every three years of employment, you get to take an extra week or two a vacation. It gets added to your pot of vacation and there is some sort of, again, help you cover some travel expenses, and you get to be gone for two weeks in a row. That’s another way of taking care. What’s cool about the sabbatical is in year one, you’re thinking, “Oh, my gosh, in a year-and-a-half, I get to start planning this great trip,” and year two, you’re getting really close to planning the trip, and you’re making all the arrangements, in year three, you get to go on the trip, and then in year four, you’re basking in the glow of the trip, in year five, you’re planning the next trip, year six, you’re going on the trip. It’s sticky and it is tight enough in time that somebody’s always thinking about their next sabbatical, which is a great way to retain employees. That’s some fair wage and benefits hacks, if you will.

The other thing that, and keep in mind, we spend a lot of time with agency employees, we’ve done research with agency employees, so this is not just anecdotal, this is research-based, but it’s also anecdotal. I hear it all every time I talk to your employees at an AE BootCamp or something like that. One of the big things they want is they want to understand, what is the agency’s vision? Why does the agency exist? What are we trying to accomplish? How are we changing the world? It doesn’t have to be some grandiose, you’re going to end hunger sort of thing, but why are we here? What matters to us?

That vision/mission/values piece is super important. Your employees want to know what they’re working towards for a bigger cause than just to make money this month, so sharing your vision with them, why sharing your vision of how the agency’s going to change and grow over time, the opportunities it’s going to present for the employees, and very important, your employees want to know what their role is in making that vision come to life. They want to know how they’re going to contribute, so talking about that, not once, and not once a year, but in maybe every quarter, and in all agency meeting, and reminding people why the vision matter and why it matters to you as an owner and why you want it to matter to them is a great attraction tool.

When you talk about why you exist, it’s a great conversation to have in interviews. It’s a great piece to have on your website. It is satisfying to your employees to know that they’re contributing to something bigger, and so it’s also a great retention tool. Again, talking about it every quarter, making a big deal about it, making sure everybody understands what their role is in accomplishing the vision, super important.

Another thing your folks want is they want the opportunity to learn and grow. They want to keep getting better. They want to keep getting better for a plethora of reasons. They want to keep getting better because they’re just driven to do that. They want to keep getting better because they know that our industry is constantly changing, and if they don’t keep getting better, they become obsolete pretty quickly. Obviously, they want to keep learning and growing so that they in advance in their career and make more money. But part of it, too, is they want to contribute, and so giving them opportunities to learn and grow.

By the way, we’ve talked about this before. It doesn’t have to be send them to some expensive conference or workshop, although that’s a fine choice, too. It can be lunch-and-learns inside the office. It can be a book club. It can be lots of other ways. It can be a online account to a masterclass, or LinkedIn’s learning, or whatever it is. There are lots of opportunities out there for you to give your people a chance and access to things that will help them get better. All of those things add up to them being better for the agency, but also them feeling really good about the fact that you’re investing in them. That’s the way I would talk about it is that you’re willing to make an investment in them so that they can keep learning and growing.

Some other ways that you can make an investment in them that matters to them… Oh, you know what? Before we do that, I’m going to pause and I’m going to tell you that we’re going to be back in a second, and then I will tell you some other ways you can invest in your employees. It’s going to be the big reveal. All right, not that big of a reveal, but we’re going to take a break, anyway, so I’ll be right back.

Hey, there. You know I am incredibly grateful that you listen every week and I want to make sure you get all of the support and tips and tricks and hacks that we have to offer. In every issue of our newsletter, I tell you what’s on my mind based on the conversations I’ve had with agency owners that week. We also point you to additional resources and remind you of anything we’ve got coming up that you might benefit from. If you are not subscribed to our newsletter now, we can fix that in a flash. Head over to agencymanagementinstitute.com/newsletter and complete the simple form and we’ll take it from there. All right, let’s get back to the show.

All right, welcome back. Today, we are talking about what your employees are looking for and what will help them make the decision to stay with you rather than take what I promise you is happening every day, a job offer that is coming their way, and also, how you can create an environment where it is attractive to other employees. One of the ways that is super attractive to prospects that several of my agencies have done is they have worked really hard to win one of the best places to work awards, either locally, or through one through our industry, but they have worked really through Forbes. There’s lots of different places you can be named a best place to work. It takes some work. You have to understand what the criteria are. You probably want to do some planning. But that’s a great feather in your cap. Also, it reinforces the buying decision of your current employees. It’s a great thing to use when you’re recruiting, so don’t minimize the importance of that in your market, or when you are recruiting.

All right, back to some other things that your employees want to help them in terms of you investing in their learning and growing. The big one is they want one-on-ones. One-on-ones, as you know, are 20-minute meetings that happen every week or every other with their direct supervisor. I did a whole solocast way, way early in the podcast, I think it’s episode 15, that walks you through how to do a one-on-one, what’s the value of it. It gives you a form to use. The employee actually fills out the form. It’s their meeting, so they really drive the agenda of the meeting.

But I will tell you that I teach about the one-on-ones and almost all the owner workshops because I believe in them so strongly, and after every workshop, every single workshop, I’ve never had less than five people reach back out to me and say, “You know what? I thought the one-on-one thing was kind of lame,” or, “I didn’t want to do it,” or, “It’s too time-consuming,” whatever the excuse was, “But I decided to try it, and I can’t believe how my employees are responding, how much they love it, how grateful they are, and how much more I know about what’s happening