Tuesday, March 25, 2014

Five Ways For Companies To Keep Employees And Lower Turnover

A couple of weeks ago, I wrote a very popular post entitled, “Five Reasons Why You May Leave Your Job.”  This post is the opposite. Turnover is way too high at ad agencies.  They should do everything possible to cut back unnecessary employee loss.  In the long run this saves money.

1 - Never fail to give raises when due
Every employee knows that if they are valued, all they need do is get another job offer and they will get their raise, no matter what.  

One thing is for sure, employees do not understand the ebb and flow of business. The problem is that wage freezes have become so usual that management takes them for granted.,  When there is a legitimate reason for a wage freeze, employees need to hear it from the people running the company, not from finance or HR. Preferably, management will have a staff meeting and do it in person and not by email. In person meetings show care and commitment.  If there is a legitimate wage freeze, then when the freeze is lifted, salary increase should be given retroactively to when it was due. This will increase morale substantially and generates employee loyalty. 
Giving raises only once or twice a year is an inexcusable policy.  This is done only for the convenience of administrators. While it may simplify procedures for a few, it is demoralizing to the many.

New supervisors refusing to approve raises is also inexcusable.  That is why companies have performance reviews and that is what human resources is for.  Companies and managers that don’t allow raises are considered callous. 

2 - Communication Is Essential
While management has many priorities, especially in a crisis (as when an account is lost or when a key employee leaves or when a significant client undergoes a change in management, etc.), failure to communicate with employees causes extreme anxiety.  Staff emails or a staff meetings can go a long way towards keeping employees involved and motivated.

3 - Allowing Difficult Managers to Continue Unfettered is Poor Management
Over the years, there are many jobs which I have filled multiple times due to difficult managers.  The fees paid to recruiters and the high cost of retraining new employees is not justified. If a difficult manager is essential, then companies should get that person counseling. 

I can think of one manager, a notorious screamer who got help and became a model boss.  I can think of another well known, award winning creative director who was sued, along with his agency, multiple times because he had a habit of improperly touching and making advances on female subordinates.  When he was finally terminated, the agency lost no business.

4 - Re institute a Policy of Rotations
A huge percentage of the people who go to a recruiter do so because they are bored. Once upon a time, most agencies had a system of rotations.  Those changes were policy. Clients knew it would happen and expected it. Keeping employees motivated and challenged is critical.

While managing rotations is time consuming and costly, it is less expensive than the cost of replacing bored employees.

Training goes hand in hand with rotation. Training should happen at every level.  It needn’t be expensive or complicated.  And training shows commitment to employees.  Once, an HR professional confessed to me that 75% of the people in the training program left anyway.  I told her that it was thee 25% who remained that the program was for. She was also was honest enough to say that the agency did not give out raises or promotions easily.  No wonder so many people left.

All of these five elements are interconnected and each goes with the other.  If ad agencies are looking to improve margins, these suggestions should help lower overhead.


  1. Great advice. All too often, management forgets the age-old tenet that the agency's most important assets walk out the door every night.

    1. Thanks, Anon. I should have ended with that thought, so I appreciate you writing it.

  2. I especially like this article from Paul because it focuses on performance “raises”. Anyone remember those?

    As a C-level agency exec, I haven’t really had to be concerned about them regarding my personal compensation. With a solid six-figure base salary, accompanied by bonuses, stock options, and, in my case, new biz commissions while at smaller agencies, I’ve always done pretty well.

    But for the rank-and file agency employee, which is about 90% of the payroll universe, raises are very important! Not just because they say “Job well done”, but because they literally help that person pay their rent or mortgage. Provide for themselves and their young families.

    Unfortunately, in today’s digital age, economy, and with top management’s LEGO mentality, we have reduced most of our people to “bit players” who can easily be replaced by another round or square peg replacement part. The message to all being, “Be glad you still have your job.” Fear as the ultimate motivator!

    And while I am tempted to say that “leverage” via Client pressure is the key to negotiating a raise from one’s agency, most agency staff rarely ever meet their clients. The billing people; traffic or project management coordinators; production estimators; studio graphic designers; assistant account executives; the list goes on. Indeed, the agency receptionist has more exposure and leverage.

    All of which is to say (in my opinion), 5% annual raises should be built into the agency’s finances - just another part of overhead and administration (O&A). And if some particular individual isn’t worth at least that … fire them and get somebody better! Bill Crandall

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