Episode 370

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For 2021 and 2022, we’ve been in a job seeker’s market where potential employees have more power to make demands. But now, this period is cooling off as we head into a recession. This means you should be able to find good talent for less money and with fewer demands.

We know it’s hard to compete with big corporations for what we can offer, but many people choose to work with agencies because they’re unique and go against the corporate grain. So once you have your star employees, how do you keep them around? This solocast, I’m focusing on how to invest in employee retention, particularly for your star players.
This episode will cover three key areas where you can get creative in making your team feel valued and how to implement them in meaningful ways. It’s time to put your money where your mouth is and show your team that they matter — because that’s almost half of the employee retention recipe. Stick around for the full episode to learn the rest!

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.
employee retention

What You Will Learn in This Episode:

  • The biggest challenge for agency owners in 2021 and 2022
  • How to creatively compete with big corporations in your employee compensation
  • Why it’s so important to invest in your employees’ career growth
  • What star players look for when choosing to work with an agency
  • Developing a greater purpose for the work you do
  • Why your employees care more than just money
  • How caring more will make your team stick around longer

“The reality is, as an agency, you will never be the best salary source for your employees. They'll have to choose to work with you for reasons bigger than salary.” @DrewMcLellan Click To Tweet “The employers that keep their employees for the longest are the ones who help their employees reach their life goals.” @DrewMcLellan Click To Tweet “Sometimes, we get going so fast, and our to-do list is so long, we're juggling so many things that sometimes, we make people feel like we are scooting past them.” @DrewMcLellan Click To Tweet “What they really want is you to see them, to be invested in them, and to care about them.” @DrewMcLellan Click To Tweet “I am a big believer that professional development is a shared responsibility.” @DrewMcLellan Click To Tweet

Ways to contact Drew McLellan:

Resources:



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