New business is on the upswing, you’re experiencing shorter sales cycles, and your business is growing by leaps and bounds. All of that is great. But you’re still facing a crisis. An agency employee crisis. There just aren’t enough qualified people to fill the spots needed to service all that business. Or maybe you have just enough employees right now but you are seeing other agencies lose staff to corporate clients and media groups and are fearful that you might be next.
It’s time to take a breath and discover all the reasons that your agency employees want to stay with you and how you can attract more of the same. Your employees have lots of reasons they like agency work and you just might be surprised at the number one reason they offer for wanting to stay. Believe it or not, it’s not about the money.
Find out my take on the current agency employee situation as I detail out:
- The agency employees shortage: why it’s happening right now
- What agency employees want most (and how to use this to attract and retain them)
- Things that will cause employees to leave
- The best benefits you can offer to attract and retain employees
- How you can compete with the corporate world for employees
- Why you need to be actively looking for employees, even if you don’t need them right now
Drew McLellan is the Top Dog at Agency Management Institute. He has also owned and operated his own agency over the last 20-years. And all through the year, he straddles the fence of working in his agency and working with 250+ small- to mid-size agencies in a variety of ways. He works with agency owners and employees in peer network groups, teaches workshops for owners and their leadership teams, teaches AE bootcamps, and does a lot of consulting. Because he works with a lot of agencies every year — he has the unique opportunity to see the patterns and the habits (both good and bad) that happen over and over again. He has also written two books and been featured in The New York Times, Entrepreneur Magazine, and Fortune Small Business. The Wall Street Journal called his blog “One of 10 blogs every entrepreneur should read.”
To listen – you can visit the Build A Better Agency site (http://buildabetteragency.com/drew-mclellan-solocast-episode-7/) and grab either the iTunes or Stitcher files or just listen to it from the web.
If you’d rather just read the conversation, the transcript is below:
If you’re going to take the risk of running an agency, shouldn’t you get the benefits too? Welcome to Build a Better Agency, where we show you how to build an agency that can scale and grow with better clients, invest in employees and best of all, more money to the bottom line. Bringing his 25 plus years of expertise as both an agency owner and agency consultant to you, please welcome your host, Drew McLellan.
Drew: Hey everybody, Drew McLellan here for another episode of Build a Better Agency. Thanks for coming on back or for joining me if this is your first episode. This is one of my solocasts. So as you know, normally I have a guest with me every week talking about some aspect of building a bigger, better, stronger, more profitable agency, but every fifth episode is just you and me.
And typically I choose a topic that I’ve been talking to a lot of agency owners about over the course of the last month that I’m assuming is also on your radar screen. And I just wanna do a deep dive with just you and me on this topic because I believe that I can add enough content here that we don’t need another expert in the field to talk about this.
So today what I want to talk about is, I think a challenge that many of you are having. So the good news is that when I look across the landscape of all of the agencies that I speak to and work with every day, the good news is that new business is on the upswing. So many of you are experiencing shorter sales cycles, more yeses than nos and the business is growing.
The challenge is that while the new business is coming faster and easier, the employees to take care of that new business are not coming faster and easier. And so for many of you, you are really facing a crisis of having the right people in the right seats on your bus to make sure that you can take care of your clients. And here is the reality for all of us, this is not unique to you. So I don’t care if you’re in a big market or a small world market or you’re a big shop or a small shop or a specialty shop or a digital shop, it really doesn’t matter.
Agencies across the land are really struggling to find, hire, recruit, hire and retain great employees. So really what this podcast is about, is how do you create an environment that is sticky for employees. What I mean by that is it’s sticky in that it helps you keep the good employees that you have. But it’s also sticky like a web when you’re trying to attract people to you. That they really get caught up in what you’re doing and how you’re doing it to the point that they want to join the team.
So this is really about creating a sticky environment for employees, whether it’s potential employees or employees that you already have in the shop. So, why are we facing this problem? Well the reality is that, odds are that your next employee is already employed, that the unemployment rate for white collar, college educated people is less than 2% right now. And that’s more than half of what the general unemployment rates are.
So basically the employees that you wanna hire are in high demand. So add to that the fact that everybody is competing for the same people that you’re competing for. You’re not just fighting against other agencies to get great employees, you’re fighting against client side businesses, you’re fighting against the media. Everybody is trying to get the same employees. People who are digitally savvy, people who understand content and social, people who can sell, people who can talk business and marketing, those kinds of people are in high demand. Not just in the agency world but in the world in general which means that you are competing against everybody.
The bad news of that is, I hate to tell you but as you already know, agencies are not where people get to be uber wealthy. So it is gonna be pretty tough for you to compete on salary alone because a corporate job is always gonna pay better and may even have better benefits than you do. And you simply are not gonna be able to compete. I have a lot of agencies who are losing good employees. And they are losing them to client side jobs because the employees are making… they are getting a 20, 30 40 percent increase in salary and the agencies can’t just compete.
But here’s the good news, I believe that people are wired to work in agencies and that the best employees that you have and the employees that are going to be your best employees who don’t work for you today, are people who really need and want to work in an agency environment. And so it’s not just about the money. It’s about a lot of other things that make you the right place for them to work and that’s what we’re gonna talk about today, is things that you can do to create an environment that is sticky.
So there’s a couple of things that I wanted to sort of get on your radar screen right now. First of all I know that for some of you, in my conversations with you, it irritates you, that you have to go to all of this effort to create a culture and an environment where people want to stay. That for some of you, your thought process is, “You got to be kidding me? I’m giving them a good job. It’s a steady job. I am paying them a good wage. I have a decent benefit package, why in the world do I have to jump through these hoops?” And the reality is you have to jump through these hoops because there are more jobs out there than there are bodies. And so you’ve got to do things that differentiate you as an employer, that make you the place that they want to be. Whether it irritates you or not, this is something that all of you need to be thinking about and probably doing.
Okay, so what are the things that you need to do to create this sticky environment for employees and perspective employees. The first one is, and this may come as a surprise to you, but the number one thing… Remember I don’t just hang out with agency owners, I hang out with a lot of agency employees especially on the account service side and the digital side. And the number one thing that they cite as what makes your working environment a place they do or don’t want to stay is you.
They want more of you. They want to learn from you. They respect you. They hold you up on a pedestal in terms of your marketing prowess, your agency knowledge, the way you work with clients and they want to be like you. They wanna learn from you. And many times they feel like they don’t get enough of your time and attention. So what they want is, they want to be mentored by you or at least someone on your leadership team. And one of the best ways to mentor your employees is to have those weekly one-on-one meetings that I talked about in podcast episode 15.
I gave you the form to fill out and all of that, and I gave you a kind of a lengthy description of how to go about conducting those meetings. So I’m not gonna get into it in this podcast but if you can conduct a one on one meeting with your employees, and again these are meetings that they own and a big part of it is about their growth goals for the quarter, and again go listen to the podcast to get the whole details.
But these one-on-one meetings do a couple of things. One, they tell your employee that they’re responsible for their own professional development and that you are there to support them but that they own that responsibility. Two, you will be amazed at what you learn in these meetings and how much tighter you are connected to the employee but also the employees’ work. Also the feeling of accomplishment and pride that that employee gets by being able to report in to you their successes for the weeks. So I highly recommend the one-on-one meetings.
It will also tell you that another thing that your employees want is, they want annual reviews. They want to know, not only how they’re doing but where they’re going. They wanna understand what your vision is for them and how to get there. So it’s not just enough to say, “Boy I think you can be a senior or account manager in a couple of years.” They want you to help them map out what they need to do to earn that responsibility and title, and obviously money from you. So that’s a great place for annual reviews.
I strongly recommend that you separate salary discussions from annual reviews. If you are gonna combine salary bumps in pay and the annual review, here’s what happens: they flip to the back page and they look to see what their salary increases. And if they’re not happy with it, they don’t hear another word you say for the whole review.
So I would just make an agency wide announcement that we are no longer gonna discuss raises as part of your annual review. Your annual review is a look backwards to see what you’re doing well and where you can improve. And it’s also mostly about what you’re gonna do in the coming year to continue to grow and serve the agency and our clients, that’s a separate discussion, then a salary discussion.
So they want the one-on-one meetings, they want the annual reviews but they also want you to notice that they are doing well. They suffer under the delusion that you have a very clear idea of how they spend their day and what they’re doing all day. And in the AE boot camps, one of the things I tell them is, “Keep in mind that your boss has 5, 6, 8, 10, 50, 100, 150, 200 whatever it is, employees that they are sort of keeping track of. There’s no way that they can know what all of you are doing, all of the time.”
So I encourage them to merchandise the good things that they do so that they do get on your radar screen. But it’s important to them that you notice and that you acknowledge when they have gone above and beyond, or they have made a client super happy or whatever it is. So even if you have to have your lieutenants, your leadership team or other people, department heads, clueing you in to when somebody is going above and beyond, it is important as one of the leaders of the agency for you to acknowledge that.
And again some of you come from the school of, “If I didn’t see my boss and he didn’t talk to me, then I knew I was doing a good job.” Well, you know what? That is not today’s employee. They want recognition, they need acknowledgement. And while that may irritate you, if you don’t do it, you’re gonna lose some great employees. They also wanna understand that you have a vision for the agency and they want to know what that vision is. Where are we going together? What are we building together? What are we trying to accomplish together?
If you have hung out with me at all with any of the owner workshops or you have listened to some of my other podcasts, you know I’m a big proponent of some level of open book management. I don’t believe that your employees can act like owners if they don’t understand the game that’s being played and how they can influence it. But in general they want to know what is your vision for the agency, and where are we going and how can I contribute?
Even more so, they would like to have a voice in that. They wanna be able to contribute ideas of how you can get there. That’s very important to them and that’s part of creating an environment that makes an employee either want to stay or want to come and work for you.
Another big area that is sticky for a perspective employees and your existing employees, is the whole arena of professional development. For the most part, good employees are hungry to keep learning. They understand that if they don’t continue to sharpen their saw, they would become irrelevant. And they’re looking for opportunities to get smarter and to do better and deliver better results to the clients and to the agency.
There was a recent research piece that said that agency employees rated being sent to professional conferences and workshops, that that to them was the equivalent of a 20% raise. That’s how important it is to them. It really says to them that you’re willing to invest in them and that you have believed that they have potential beyond wherever they are today and for you that’s about helping them grow.
I think it’s super important that you emphasize to them that their professional development is a shared responsibility. It is not on you to be tracking down conferences and saying, “Hey I’m gonna send you here.” Should you do that? Yes. But it’s not just your responsibility. Professional development is a shared responsibility and they need to understand that they have some ownership in that.
Many of you already ask employees to come back and do lunch and learns after they’ve gone to a trade show, or a conference, or a workshop, and that’s important. You wanna have them bring back whatever they learned and infuse it into the agency. One of the other things I love about professional development is I think of it as a great litmus test to identify which of your employees think of their job as a job versus a career. Which ones are in there and just kind of phoning it in and they’re the ones that are leaving at 5:15, and which ones are there because they’re very invested, and how they respond to professional development.
Both you’re giving them the opportunity and then what they do with what they’ve learned. Do they come back to you with a plan of, “Here are five things I’m gonna do different based on that workshop I went to. Here are three things I think we should change and how the accounts service department behaves based on that workshop. I’d like to do a presentation to the leadership team about this topic or that topic.” Those are the employees that you know you can count on in the long haul, and those are the employees that you should be investing in both in terms of your time and money.
Because for them it’s not a job. It is a vocation and it’s something that they take great pride in and they wanna get better in. So don’t look at professional development as an expense. It absolutely is an investment but it is also a great way to see your superstars bubble up amongst the employees.
Okay, I’ve got two more big categories to talk to you about but first I want to take a quick break for a promotional announcement. So just sit tight for a second and then I’ll be right back. I hope you’re finding this content really helpful. I just want to take a quick pause and remind you that on top of the podcast, we also do a lot of live workshops for agency owners, agency leaders and account service stuff. If you’re interested in the schedule, check it out at agencymanagementinstitute.com/live. Let’s get back to the show.
Okay, we are back, talking about sticky employment environment. So again, creating an environment where your employees who are currently working for you want to stay and they’re turning down offers from head hunters or your clients or the media because they want to stay and keep growing with you and your agency and also an environment where, when you talk about the way you work with your employees, perspective employee say, “You know what? That’s a place that I wanna be.”
So the next one is one that we all talk about quite a bit which is culture. And here is one of the places where you can really kick the corporate job and the media department or the media companies. You can really kick their rear ends because you can create a culture that is very vibrant and very energetic and really a place where people feel like it’s a fun place to work. It’s a creative place to work. It’s an energized place to work and all of that starts with you. So you can’t be thinking about your shop like it’s still the 1950s.
The reality is that the workplace and the employees are changing the way we work and we have to make some modifications. So if you are still, if you still have your heels dug in, that everybody is gonna work from 8:00 to 5:00 and everybody is gonna work in the office five days a week, I am here to tell you, if you haven’t already seen the attrition, you are gonna start seeing the attrition. Today’s employees want more flexibility. They want to be able to blend their work and their life.
So, for some of them that means coming in to work earlier so they can leave by 4:30, so they can pick their kids up after school. For others it means not coming in until 9:15 because they have… that’s the… what time they can get to the office after their last kid gets on the bus or they carpool with a bunch of other people and that’s when they can get to the office.
Your agency employees are expecting you to be a little flexible and that doesn’t mean that they can be irresponsible. It doesn’t mean they can just come in willy-nilly whenever they want. You can still put structure around it, but they want flexibility. They want flexibility in terms of the hours that they work, in terms of when they start and when the stop and they also want flexibility in terms of where they work. Whether that’s work from home, on occasion, or remote employment. There are lots of different models and I’m not gonna get in to any of those in this podcast. But know that you’ve got to be thinking in those terms to be competitive today, whether you like it or not.
I also think it’s important that you create an environment that says, “We at this agency are lifelong learners.” So whether you do something old school like you have a book club or you bring in people to do lunch and learns once a month for your staff, whether it’s media reps or your 401K rep or somebody else to teach them some aspect of the business or just kind of adult life in general, but you’re creating an environment where people learn that you’re sending people to workshops. All of that sort of stuff matters to your employees.
I think you also have to create what I would call “moments of fun”. These are little quickie things that happen that are playful, that are… I think of them as palate cleansers. So your people are working hard, they’re concentrating, they’re trying to be creative on demand. Every once in a while it’s nice to have sort of a mental floss moment where I get to clean out my brain, get a refresh and then go back at it.
That can be as simple as you know, you stopping at the grocery store and bringing back ice cream sandwiches for everybody. That can be as simple as somebody deciding to have a paper airplane contest. These are events that take 15 minutes or less but they are just moments of play in the middle of your day. Lots of agencies have pinball machines or ping pong tables or dart boards or something in their office, but a lot of times those things gather dust. So they’re great in the beginning and then they sort of just gather dust.
So why not start a foosball tournament or something that says to your employees, “It’s okay to play on occasion.” They need that mental break and I will tell you this, whether you plan it or not or someone else in your shop plans it, it’s important that you participate, and here’s why. When you don’t participate, you are sending the message loud and clear that you don’t approve.
So I get that you’re super busy, I get that you may think that you know, “Fifteen minutes of ping pong is stupid.” But you participating at some level or you know, cinco de mayo, you know chips and salsa, you don’t wanna do that or you’re on a diet or whatever. Participate at least for a while. Give them the very clear physical sign of your presence that you approve of this behavior and activity. It’s great if you wanna initiate it, a lot of agencies have a fun committee or a social committee. You can handle this however you want but it’s important that you create an environment of play and fun inside your agency.
It’s also important that you do bigger things around that theme on occasion. So think of them as field trips, a couple of times a year, four times a year that you guys pack up at 2:00 or 3:00 in the afternoon and you go to an art museum or you go throw clay pots together, or you build a habitat for humanity house. Whether it’s a team building activity, a creativity activity, you go see the newest animated movie together. Whatever it may be, look for ways to fuel and feed your team’s creativity and their sense of team.
And it doesn’t have to cost a million bucks, you don’t have to do it very often but I’m telling you those are the moments where your team comes together, they bond, they create connection and they look at your place as something more than just a job. They look at it as their place and it’s sort of their posse of people. You can create that environment pretty easily and pretty inexpensively.
I also think it’s important in the culture that you help your employees understand how agencies make money and how they can influence that. So I am a big proponent of AGI based bonus programs. And I have not done a solocast on this but I need to do one. But if you have interest in a bonus program, know that we teach it in great detail in both our best management practices of agency owners and our workshop called “Money Matters.”
So you’re welcome to attend one of those. I promise I’ll do a podcast on this in the future but I am a big proponent and create… rather than just giving away a Christmas bonus, why not do a bonus that teaches your employees how to think and behave like an owner when it comes to money. And that only happens to repetition and education and I promise you they are already guessing how much money you make and all the things that you worry about, about open book, those things exist in your head. There is a way to do a bonus program that is tied to AGI that helps them understand how and when the agency makes money.
You can’t expect them to be good steward of the agency’s money if they don’t understand how it works. So package all of that up. That’s all about culture, that’s about shared accountability, that’s about when the agency makes money, we all make money, that’s about moments of fun and that mental floss, all of those things matter.
And certainly the last component of this, of this sticky work environment is the whole idea of benefits. So again remember that salary alone is probably where you’re never gonna cut it but you certainly wanna make sure that you are paying a competitive wage in compared to other agencies. So we do an annual salary survey where you can look at the numbers based on geography, based on number of employees in the agency and based on specific job titles. So that’s a resource for you.
I know there are plenty of other salary surveys out there that are more generic that aren’t are as agency specific. And I know there are some other ones out there that are agency specific. So whichever one you use, first of all make sure that your salaries are competitive. Secondly, beyond that, making sure that your benefit package is competitive. So again in our salary survey we ask agencies to tell us what benefit packages they, what benefits they put in their package, and at what percentage do they pay for it versus the employees.
So you can sort of see what other agencies are doing in terms of vacation time and other things, right? Speaking of vacation time, one of the big benefits that is very sticky for today’s employees is unlimited vacation time. Now, before you start clutching in your chest and saying, “There is no way I would ever do that.” Let me tell you how this works. It’s still by department. You can still limit how many day in a row someone takes so that they can’t take off for a month and half.
In the AMI Agencies where we have implemented the unlimited vacation policy, we’ve done studies and we have looked at how much vacation time was taken in the old school way where people got a set number of days, whether they were PTO or vacation days versus the unlimited vacation, and in every single case the employees as an aggregate whole, took fewer days or the same number of days that they took when they had a defined vacation policy.
But the differences are pretty dramatic. Number one, the agency employees’ satisfaction around vacation policy went up dramatically. Number two, you know that crunch of people taking time off from mid-November through the end of December because you have a use it or lose it policy, that goes away. Think of the unlimited vacation policy sort of like an all you can eat buffet. When your employees know that they have vacation when and if they need it but that they don’t have to count the days and all of that, you will be amazed at how much more judiciously they use vacation time and how it gets spread out over the whole year rather than jamming up over the last 6 to 8 weeks.
Another benefit is, if somebody leaves you and you have an unlimited vacation policy, you don’t have to buy back their vacation days. You don’t owe them any money for that and say, “Look, when you leave, you leave and whatever vacation you use, great, glad you used it but we don’t owe you any more money.” That can be a huge savings for an agency especially for some of your older employees who right now are getting three or four or five or six weeks of vacation. So that is a great benefit.
Another great benefit is shutting down early one day a week. So many agencies have moved to a 2:00 or 3:00 shut down on Fridays. Now the understanding of that is, if a client schedules a meeting or whatever, yeah you still have to go. So most employees end up getting maybe two Fridays out of the four, they end up getting off early but they love the idea that they may be able to sneak out early on a Friday.
Some agencies do that year round and other agencies just do it in the summer. What many agencies do, what they do is, let’s say they normally started around 8:30, what they’ll do is they will just add half an hour to each of their first four days of the week to make up those two hours. So it’s really not time off, it’s really just rearranging time. So you can ask people to expand an extra half an hour a day during the front half of the week so that they can get out at 3:00 on Fridays, which people adore.
Again we’ve talked about the flex and the remote time. Here is an idea that is really, really proving to be successful in many agencies. I’ve got several agencies who are doing what we’re calling sabbaticals. What that is in essence is, every three years the employee gets an extra week of vacation, an X number of dollars towards a plane ticket or hotel. For most of you, you can use you AMEX points or your credit card points to buy that.
So basically what you’re saying to that employee is, “Drew every three years I’m gonna give you an extra week of paid vacation and I am gonna contribute $500 to plane tickets for you and your family or you and your significant other or you and your neighbor or whoever.” And you can set the dollar around however you want. “We’ll buy $500 worth of plane tickets for you.” Or if they’re gonna travel by themselves, “We’ll give $500 in essence travel voucher and we’ll apply it towards plane ticket and or a hotel however that works out.”
Agency employees love this. First of all they love that they get the extra week off. Secondly… so obvious this does not work if you do an unlimited vacation policy. Secondly… So first they love the extra week off but they love the fact that you are encouraging them to travel. And they love that you are helping them do that by picking up part of the tab. And the great thing about this is the year they do it, there’s no way they are leaving. And by the way they have to pay it back if they leave within six months of the sabbatical.
So for that year it’s sticky. The next year they still are remembering the trip so it’s sticky. The third year in, so that’s a year away from their sabbatical, they know their sabbatical is only a year away so they are less incented to leave you because they know they’ve got that extra vacation and that bonus money for travel coming up. And then the year of, they know it’s coming and then of course they are on the hook for the six months later.
So this is a really… this is a really great way to hook your employees and I’m a firm believer that employees that are well traveled and that explore the world… and again the world could be Canton, Ohio or it could be somewhere in China, that I don’t care about. But people who get out and see the world are better employees. They ever brought a perspective, they understand the markets better and they are somebody who has a broader understanding of the world in which we all live.
So there’s lots of benefits to doing this. It’s super sticky, your employees will love it and I think they come back a better employees. So again, just to kind of wrap all of these up, the number one thing that makes your agency sticky for perspective employees and for the employees that you wanna keep is you. That mentoring, that one on one meeting, you sharing your vision, all of that really matters. Your employees also want professional development. They want to get better and that serves the agency and it’s also, as I told you, a great way to identify your super stars.
The third thing is all about culture. So creating a place that is energetic and creative and fun. And you can do that in lots of little ways that don’t cost you an arm or a leg, but it’s important that you do it and it’s important that you participate. And last but not least, make sure that your salary and benefits package are competitive, and try and throw in some extras that make you different and better than the other agencies, the other corporate jobs and the other media companies who are all suiting, chasing after and trying to be a suitor to your employees.
All right that’s what I have for today. So hopefully that was helpful, happy to answer any questions. As always you can find me at [email protected] Feel free to checkout other podcasts. Again remember if you’re wondering about that one-on-one meeting, that’s episode 15. I promise I will do a bonus program episode pretty soon.
But in the meantime please subscribe if this has been helpful to you. I don’t want you to miss an episode. If you have already, I would be so grateful if you would go and leave a review and a rating at either iTunes or Stitcher or however you’re accessing this podcast. That’s what allows us to get on the radar screen of other folks who are looking for good podcast, so I am always grateful when folks do that. So if you would do that, I would appreciate it. I will be back next week with a guest to help you build a bigger, better, stronger, and more profitable agency that you can be proud of, you can make great money at, and hopefully you can wrap up and sell someday for big bucks. So I will talk to you next week. Thanks so much for listening.
That’s all for this episode of Build a Better Agency on agency employees. Be sure to visit agencymanagementinstitute.com to learn more about our workshops and other ways we serve small to midsize agencies. While you’re there, sign up for our e-news letter, grab our free e-book and check out the blog. Growing up bigger, better agency that makes more money attracts bigger clients and doesn’t consume your life is possible here on Build a Better Agency.