The ultimate guide for investing in star employee retention with Drew McLellan

Speaker 1:

It doesn’t matter what kind of an agency you run, traditional, digital, media buying, web dev, PR, whatever your focus, you still need to run a profitable business. The Build A Better Agency podcast presented by White Label IQ, will show you how to make more money and keep more of what you make. Let us help you build an agency that is sustainable, scalable, and if you want down the road, sellable, bringing his 25 plus years of experience as both an agency owner and agency consultant, please welcome your host, Drew McClellan.

Drew McClellan:

Hey everybody. Drew McClellan here from Agency Management Institute. Welcome back to another episode of Build A Better Agency. Thanks for coming back. If this is not your first rodeo with us, and if this is your first rodeo, you’re going to hear something that’s a little different today. So in most episodes, I have a guest with me who’s super smart, and all I have to do is ask good questions. And then you and I both get smarter. Every fifth episode is what we call a solo cast. So that is just me talking to you about something that I think is on your mind or I know is on your mind because I talk to all of you so often. And also it might be something that’s on my mind that I want to make sure gets on your radar screen. So that’s what today’s episode is. It’s a solo cast, and I’ll tell you a little bit more about it in a second.

But on every solo cast, we give away one seat to one of our live workshops. Or if you are from out of the US and you don’t travel to the US, you can have a seat in one of our virtual on-demand workshops. So how this works is what you do is to be entered into the drawing. You go to wherever you download podcasts, and you leave this podcast a rating and review, and then you screenshot that rating and review because most of you have screen names tied to your Apple ID or something like that, that I’ll never be able to knit together who Jeep Wrangler girl is to an agency owner and an agency email address. So what I need you to do is I need you to take a screenshot of the review and then send it to me, then we put your name in the drawing and you stay in the drawing until you win.

So sooner or later, odds are pretty good that you’re going to win a free workshop seat. And those workshops, if you’re a member, depending on if you’re a member or not, sell for around $2,000. So no small change there. All you have to do is get to wherever the workshop is being held and we will be glad to have you with us for the two days of learning and sharing. So anyway, that’s what you need to do. And so today’s winner, Leslie Osborne from the Watauga Group, did that very thing actually, a couple years ago. And Leslie, I’ll reach out to you in case you don’t listen to this real time, but congratulations, you want a free workshop seat. So that’s awesome. So with that, let me tell you a little bit about today’s episode and what I want to talk about. For many of you, the biggest challenge of 2021 and early 2022, and even going into the tail end of 2022, the biggest challenge for you has been finding good talent.

And when you find good talent or you already have good talent on your team, you want to retain that talent. And so that’s what I want to talk about today, or some of the ways that you need to be thinking, some of the things you need to be thinking about as you want to invest time and energy in keeping the good people that you have. So as you know or as many of you know, we do primary research, every year we go out into the field, it’s called the Agency Edge Research Series. You can find it on the website under resources. But anyway, we go out every year and we talk, typically, we talk to CMOs, business owners, directors of marketing, people who hire agencies, and we talk to them about a specific topic. But this last year in 2022, what we did was we talked to agency employees about how they were feeling about work, how they were feeling about remote work versus in office work, how they were feeling about their job, their agency, their career in advertising or marketing.

We talked to them about a wide range of things. And we got some very interesting results, which we’d already did a podcast episode on this a few episodes ago, so I’m not going to go back into the results. But there was a large group of the employees who frankly are struggling, and they’re not as happy as we would want them to be if we think they’re going to stick around for a long time. And so some of the recommendations that came out of that research were looking at the things that they wanted more of that they didn’t get, or the things they wanted less of that they got too much of. And I’ve been talking to agency owners, as we’ve been doing peer groups and things like that all this fall season, we’ve been talking a lot about retaining employees. And so I just want to talk to you about some of the things that you can be thinking about and that you should be investing some time and energy into, to try and keep your best and brightest.

All right, so immediately everybody goes to compensation. And I get it. I mean, obviously right now salaries are inflated. Prospective employees know that they are in the driver’s seat and that they can command whatever they want within reason. And I will say within reason, because the unreasonableness of the demands is dropping. And so I’m taking that as a really good sign that things are sort of normalizing. Now, with companies slowing down their hiring with talk of potential recession. We’re seeing marketing departments and agencies cutting staff. And so the good news is the pool is bigger, the candidates are better qualified, and the candidates are more anxious to get a job. And so they are being more reasonable about salary and compensation. So that’s all good news, but that’s still the first thing that we go to is we have to keep paying them more money.

And the reality is, as an agency, you are never going to be the best salary source for your employees. They’re going to have to choose to work with you and for you for reasons bigger than salary. Do you have to pay them a fair wage? Absolutely. Do you have to be competitive? Absolutely. But you’re not going to out pay a corporation. Actually, most agency benefits are pretty comparable to what corporate benefits are. Most of you are very generous with healthcare and insurances and all that sort of thing, but salary for salary, dollar for dollar, you’re probably never going to be able to compete. So you’ve got to figure out other ways to create a compensation package that is attractive and has sort of the flare that an agency can have that another person or a corporation or an educational institution isn’t going to do. So, for example, some agencies have gotten really creative about sabbaticals.

So every three or four years, an employee gets extra time off, they get some extra spending money, and they’re allowed to knit their time off together in a bigger block of time so that they could go on a sabbatical, whether it’s a couple weeks or a month, whatever it may be. And the agency makes a big deal out of these sabbaticals. People come back and they tell stories about where they were at, and they might do a lunch and learn about, if they went to another country, what they learned. So agencies are not only giving the employees these sabbaticals, but they’re merchandising them. They have the employees come back and do a lunch and learn on what it was like to be in South Vietnam or what they did to write their book while they were away for a month or whatever it may be.

But they sort of celebrate the sabbatical with the entire team so that everybody is very aware that the sabbaticals are a thing. They get excited about each other’s sabbaticals, and every three years they get one. So in year one, they’re excited about it and they just started with you. In year two, they’re only a year away from their sabbatical. Year three, they get their sabbatical. Year four, they’re in sort of a glow of their sabbatical. Year five, they’re already planning their next sabbatical. And then year six, they get a sabbatical. So the cadence works well in terms of retention. Another thing that many agencies are doing is that they are offering unlimited PTO. And in the show notes, we will include a sample of some different policies around unlimited PTO. And whenever I talk about unlimited PTO to agency owners that haven’t considered it before, they freak out and they think everyone’s going to take all the time off in the world.

But the reality is, we’ve been talking about this and instituting this with AMI agencies for over a decade. So we have, gosh, probably 50 or more agencies that have unlimited PTO including my own. And I will tell you, without exception, their team as a whole takes less time. There’s always one person in the agency who abuses it and you have to sort of ratchet them back, but it’s only one person and it’s easy to ratchet them back and everybody else, because they don’t feel the pressure to use or lose their vacation time, they are much more reasonable about how much time they take off. They are fair to their teammates so that they don’t leave them in a lurch, and they are pretty respectful of the rules. So anyway, we’ll put in the show notes, we’ll put some policy samples for you to take a look at.

But that’s another great way. It’s a great recruitment tool, but it’s also a great retention tool. And I’ll tell you the other thing that we hear over and over and over, and this is not just in this last survey, but in all of the times we have done research with employees and in all the conversations that we have with your folks at workshops and things like that, what they really want is they want you to see them, to be invested in them, and to care about them. We’re going to talk about that more in a minute, but they want to know that you have a plan for them. They want to know that you are thinking about their career in a way that they’re thinking about their career. And so what you’ve got to have is you’ve got to have sort of a career path for them. And for many agency owners, what I’ll hear is, You know what? Nobody planned my career and I did fine.

These people need to grow up and plan their own career. Not going to agree or disagree with you; what I’m going to tell you is today’s employees don’t know how to do it, and they need your help. They need to know what’s possible. And so you sitting down and saying, hey, you know what? We’re super excited to have you on the team. Today, you are a junior woodchuck, and I know that you aspire to be a woodchuck. So let’s talk about the skills and talents you need to develop to become a woodchuck. And here’s what those look like. You need to have this certification, or you need to be able to do this, or you need to be able to manage this much business or whatever the criteria is to move from a junior woodchuck to a woodchuck, which by the way, this is a good exercise for you to do anyway, to understand what the progression plan is for people to move up in their career and the skills and talents you need at every level of employment.

So I want you to sit down and you say, okay, look, here’s your junior woodchuck, you want to be a woodchuck. You have to be able to be good at these five things. So let’s look at each of these things and see where you’re at now. So on item number one, you’re almost there. You’re 90% there. On item number two, this is not something that your current job asks very much of from you. And so this is not something that you’ve done a lot of, and I haven’t seen whether or not you’re good at it. So I want to spend some time with you thinking through how you can practice this and demonstrate that you have a skill in this area, whatever. And then you’re going to say to them, let’s put together a plan of courses, shadowing opportunities, whatever it may be, that will help you learn these skills so that you are eligible to be promoted to be a woodchuck when we have the need for another woodchuck.

And so then in your one-on-ones and your check-ins, and you’re asking your employees to set quarterly growth goals, now we’ve defined exactly what it is they need to work on, they need to develop, and how you are going to help them. And it might not be you personally, it might be the staff, it might be their direct supervisor. If they’re not the ones having that conversation, it might be somebody in another department. This is also a great time to say to your employee, hey, you’re a junior woodchuck. Do you actually want to be a woodchuck or would you rather be a deer? And if you aspire to be a deer, then let’s talk about how we have to transition you from junior woodchuck to deer. What are the transferable skills? What are some new things you need to learn, et cetera, et cetera, et cetera.

But having that career path for them, talking to them about their career is super important to them. They want to know that there is opportunity. And especially in some smaller agencies, they may look around and say, I’m never going to get promoted. I’m never going to get a raise. I’m going to be stuck in this position for a long time because there’s no one else moving. And so you need to help them understand that there is opportunity for growth inside your organization no matter what size you are, that they can make more money, that they can have more responsibility, that they can have new experiences inside the agency. They don’t have to leave you to advance their career. That’s the thing you’re trying to prevent, is, them thinking, nobody’s talking to me about the future. I don’t see a future here, so I better go find another job.

You don’t want them to do that. So I want you to do the career plan. And part of that career plan is investing in them and saying, okay, look, you need to have some certifications, or you need to take some courses, or you need to go to our New York office. Whatever it is, there are things you need to do to develop these skills and talents so that you can become a woodchuck. So here’s what we’re committed to as an agency. We will invest in you, we’ll send you to this course, we’ll give you time off to do this thing. And here’s what we’re asking you to do to invest in your career. So be really candid about what you’re willing to pay for and what you expect them to do on their own time in their own dime. And I am a big believer that professional development is a shared responsibility.

And so you need them to be invested in themselves, to be willing to take a course on a weekend or do some certification work at night or whatever it may be. But you also need to show that you are invested in them and you’re willing to invest in them to allow them to advance in their careers. So have that really candid conversation about the path and how you’re going to invest in their growth and the path. The other thing is they want a mentor. And honestly, in many cases, they want somebody who’s going to be their coach or whisper in their ear and really guide them through getting particularly around the soft skills. I mean, you can take a course to learn some of the hard skills, but there are a lot of soft skill demands in our work, and they are probably not super strong at a lot of those soft skills. Whether it’s relationship building or it is negotiation, or it is collaboration with a team across all aspects of the agency, whatever it may be, they probably need some mentorship around that.

So being really clear that that’s part of their career path, too. It’s not just that you have to be certified in this, or you have to know how to do this, or you have to manage this book of business. But also you have to be able to create relationships. You have to be able to build trust, you have to be able to have hard conversations. These are skills that you also have to have. And in many cases, they’re going to need someone to mentor them through some of those, the development of those skills. So they want someone who is invested in them, it might be you, it might be their direct report if that’s not you, but somebody has to be willing to be a mentor. And what they also want is they want some time and attention from you. So I’m going to talk about that in a quick second.

But first, let’s take a break. Hey, there, just a quick interruption. I want to make sure that you are aware that you are cordially invited, not just invited, but cordially invited to join our Facebook group, our private Facebook group. All you have to do is go to Facebook and search for Build A Better Agency, and you’ll find the Facebook group. You have to answer three quick questions, you have to put in the agency URL, you have to talk about what you want to learn from the group, and you have to promise to behave yourself. And that’s it. And then we’ll let you in and you can jump into the conversation with over 1,000 other agency owners and leaders. And there’s a robust conversation happening every day. People are sharing resources and best practices and discussing everything from work-from-home policies to maternity and paternity policies, to biz dev strategies.

So come join us and jump into the conversation, right? Speaking of conversations, let’s head back. All right, I’m back. And I was just saying that regardless of whether or not these employees are your direct reports or not, they want you to be invested in them and they want you to see them and they want you to see them. This came through loud and clear in the survey. They want you to see them as a human being, not just an employee, not just a cog in the wheel, but they want you to know about the fact that they have three kids. They want you to know that their mom is not in good health and that they’re spending a lot of their nights and weekends tending to their mom. They want you to know that they have aspirations and goals outside of work, whether that’s to buy a house or adopt a baby or whatever it may be.

They want to feel seen, they want to feel cared about, they want you to check in on them to see how they’re doing. They hunger for matter, they hunger that you show them that they matter, and that is bigger than just work. And so that takes some time, that takes some energy, that takes some creating opportunities to do coffee together or zoom coffee or whatever it may be. But they really hunger to be seen in a very holistic way. And I think sometimes as agency owners and leaders, we get going so fast and our to-do list is so long and we’re juggling so many things that sometimes without meaning to, we make people feel like we are scooting past them, that we are just running past them to the next fire to put out, and that they are a little bit invisible to us.

And I’m telling you, this is a huge source of dissatisfaction among many agency employees, is they want to matter and they want to matter in a very holistic way. They also want you to inspire them. Another thing that we as owners and leaders need to be mindful of is one of the ways we retain superstars is by helping them understand the greater purpose of the work that we do. And there’s been a lot of talk about this, you can do the whole Simon Sinek, Start with Why, whatever it is. But the reality is, employees want to know what is the company’s vision? Why are we doing this work? What are we doing that matters? I think particularly today, employees want to contribute to something that is greater than making money. And it’s not that they don’t want to make money, they don’t want you to make money.

They do understand it’s a for-profit business, and the only way they get a raise or a bonus is if the company is profitable. They don’t begrudge any of that, but they want it to be more than that. They want to somehow have a role in something more significant. So this gets back to the whole conversation around, do you have a mission, a vision, a set of values? And do those documents and those sentiments and those beliefs, those philosophies, do they guide the way you run the business? And do you talk about them internally? Do you talk about them with clients? Do you talk about them publicly on your website when you’re out and about in the community, whatever that may be. So I think one of the things that our employees want from us is they want to be inspired. They want to work for someone who is inspiring.

And what that means is that you have, A, to have a mission, vision, and some values. You need to actually weave them into the organization. You need to talk about them, not just through talk, but through action. You need to recognize people for living the core values. You need to be talking about milestones that are going to get you to the vision of where you want your agency to be. And you need to help your employees understand why for you, you’re choosing to do this again because you want to do work that matters. You want to do something that’s significant. And it may be that you just want to create an amazing place for people to have a career and be able to take care of their families. Great. Then let’s talk about that. It may be that you want to have some influence in an industry or a niche.

Great, let’s talk about that. But all too often we don’t talk about it. And even if we do talk about it, maybe it’s in the employee handbook, or they hear about it during their onboarding, but it’s not part of the day to day conversation inside the agency. Whether we’re talking about your values or your mission or your vision, we don’t actually build the business around those core factors of our business. And that’s one of the things that your people want. They also want you to be inspired in terms of they want you to be infectious. So you being in the office or on a Zoom call and you are enthusiastic, you’re proud of the work, you’re celebrating people. You’re staying current, you’re demonstrating how you are continually sharpening your saw. All of those things matter to them and they’re inspiring to them.

They want to work for an inspired leader and an inspiring leader. And so part of that is, you have to take good care of yourself. You have to be in a place where you can be inspiring, where you can have a passion around the work, where you can be excited about biz dev opportunities or an employee’s growth or things like that. You’ve got to bring that to the party. So a lot of you are feeling a little tired, right? A lot of you are feeling like the last couple years have really been a heavy lift and everything seems harder. I hear that sentence all the time. We’re doing fine, we’re making money, but everything seems so much harder. And I think part of that is because we haven’t actually recovered from all of the things that happened in 2020 and 2021. We didn’t give ourselves room or time or space to sort of heal from those changes, those hurts, those losses.

And so we’re carrying all of that extra burden, that extra grief, that extra fill in the blank. So I think part of this for you is sort of looking in the mirror and saying, am I an inspiring leader? And am I projecting the kind of energy and passion for the business that I would want my people to receive, and also then reflect through the rest of the organization? And if not, what do I have to do myself? What do I have to do to be able to step into that role and actually be inspiring? So that’s a little soul searching, I think, for you. And then again, having a plan of, okay, and oftentimes when we put together a business plan, it’s really about metrics and money. But it’s not necessarily about how do I get closer to being the agency that my vision describes us to be?

And is it around excellence? Is it around subject matter expertise? Is it around impacting the community by the kind of clients you serve? What is the vision? And then what are the milestones that we’re going to measure against and talk about all year long to get us closer to being that vision? So if you’re an agency that serves nonprofits and your vision is that your agency is the conduit that brings people doing good work together with people who want to support good work, meaning financially, volunteers, whatever that is, and also people who need the work, who need that help, and your job is, you match make for that, that’s a great vision. So then put some milestones together with it and measure it. If you are in the B2B space and your goal is to work with clients who deliver a quality of excellence that changes the lives of their customers.

So whether it’s lawyers or CPAs or architects or whoever it may be, you want to work with the best of the best so that their work can actually transform the lives of the people that they serve, great, then talk about that. But to say, our goal is to hit $3 million in gross revenue, or this number or that number, and only have it be about the numbers that is not inspiring, probably not inspiring to you, but certainly not inspiring to your employees. And so stepping back and doing a little bit of soul searching about what you really do when people describe your agency after the agency is long gone, what do you want them to say about you? What do you want them to remember about you? What impact do you want to have and on whom? So I think that’s great soul searching, but then share it with the team and then weave it into, make it a practical part of your monthly all agency meetings or the metrics that you measure.

It has to actually be meaningful and you have to demonstrate that you’re actually not just giving it lip service, but you are actually trying to accomplish that goal, and here’s how we do it. And so anytime we set a big goal, of course, we build milestones. And so you can inspire your team to help you accomplish and achieve those milestones, which will fire them up. All right, so those are some ways that you can retain your best talent. I will tell you, there’s a methodology, I see agencies doing that is not the right way, and that is giving up shares or ownership, that, where you are gifting a share of stock, or five shares of stock, or whatever the number is. Do not. There are other ways, insurance policies, bonus programs, there are other ways to be sticky with your key employees.

Do not, under any circumstances. I don’t even care if they’re your kids, do not give away shares of stock, that does not make a great union. It is doing a noble, honorable thing for the wrong reasons. And it always backfires. Almost always. I can think of one time that it hasn’t backfired and the rest of the time it has not worked out well for the agency owner. You think that giving somebody 5% or 3% or even 10% of your business is going to make them stay. But the reality is a minority partner at that size has no voice, doesn’t make that much more money. There’s not enough in it for them, for them to stay. And so what happens is a lot of times if they want to leave, they’re going to leave, and then you end up buying back the shares of stock that you gave away.

So I’m going to do a whole solo cast on this down the road, but I just want to put this little pin in this now that I understand that you desperately want to keep your key people. I am telling you loud and clear, giving away part of your company is not the way to do that. There are other ways, and we talked about some of them. There are certainly some other financial ways. Like I said, you can buy vested insurance policies that they get the money out of, like a overfunded whole life insurance policy. You can create bonus programs for them around metrics, but do not give away what you have built. If they want it, they can buy it, but do not give it away. All right, I’m going to get off that soapbox. Here’s the deal. We all know that our agency is as good as our people.

And for many of you that have successfully stepped out of a day to day role and are really working more on the business than in the business, you know if you lose some of your key senior people, the solution is you have to step back into the business, which is not something that you want to do or frankly is good for the business. So it is important to spend some time really thinking about how to invest in your key people. Another thing, back to that sort of seeing them as a whole person, if you have not read the book, Dream Manager, I highly recommend it. It’s basically a book that says the employers that keep their employees for the longest are the ones who help their employees reach their life goals.

So again, it might be adopting a baby, buying a house, buying a vacation home, spending more time with their elderly parents, whatever it is, but you understanding what matters to them and helping them, not by giving them money or paying for it, but you helping them accomplish those goals is, at the end of the day, the way that this is going to win for you. So again, it is having a career path for them. It is about understanding that your compensation is never going to be what wins the day for you by itself. You’re going to have to do some interesting things with benefits like the sabbaticals or the unlimited PTO.

It is very much about having a career path, helping your employees see their future within your agency and helping them accomplish the goals that they need to accomplish to take that next step. It’s about being inspiring; it’s about firing them up. It’s about having a passion for the business yourself and spreading that through the agency. Those are the kind of things that keep our employees being clear about why we exist and what we’re doing, and inviting the employees to participate in that. That gets everybody excited. And honestly, it’s going to fire you back up, too. If you’re feeling like you are a little out of energy or you’re constantly walking uphill and there’s never a downhill, this may help you as well; as you become more inspiring, as you invest more in them as human beings and as professionals, you help them accomplish their goals, I suspect it’s going to be good medicine for you too, and it will help with your retention.

All right, that’s what I have for you today. Just a reminder that we are now selling seats for the January workshops. So Mercer Island Group is back with a brand new workshop. It is all about how to get to the final three. How do your written documents either lose you the opportunity to be in the final shootout or to win the business, or how do your written documents, case studies, cover letters, proposals, all of those things, how do they get you to the table or keep you from the table? And I’m telling you, for all of you, as we go into 2023, and you’re worried about the recession and you’re worried about all the other things, this methodology they’re going to teach you, they’re going to show you good examples and bad examples. They’re going to teach you how to do it. And for some people in the workshop, they’re going to use your materials as examples if you want them to and help you improve them.

So that’s like a free consultation with Mercer Island Group, cannot beat that. So the workshop is a Tuesday, Wednesday. I think it’s the 24th and 25th of January. You can read more about it on the website under how we help. And then find workshops. And you will see the Getting It Right Workshop, is the workshop I’m talking about. All right. That’s it for me. That wraps up this solo cast. I know this is top of mind for many of you, how to keep your folks, and I’m hoping this was super helpful. I want to give out a huge shout out to our friends at White Label IQ. As you know, they are the presenting sponsor of the podcast, and so they do White Label PPC, dev, and design for many, many agencies. They are their outsource partner. They are a great resource. I’ve known these folks for 20 some years.

These are good human beings, could do great work and have been a huge help to many AMI agencies, and I’m sure many non-AMI agencies as well. So if you want to check them out, go to whitelabeliq.com/ami. And if it’s your first project with them, they have some free hours for you to sort of kick their tires. All right, so I’ll be back next week. Next week I’ll have a guest and we will talk about something that will help you think about your business a little differently. In the meantime, thank you for listening. Always grateful to spend the time with you, and I will see you next week.

Thanks for spending some time with us. Visit our website to learn about our workshops, owner peer groups, and download our salary and benefit survey. Be sure you also sign up for our free podcast giveaways at agencymanagementinstitute.com/podcastgiveaway.