Finding and keeping the best people

Written by Jon Ross
16 May 2022

Attracting and retaining top talent is the key to long-term success. It’s about to get a lot harder to do. The ongoing battle for talent is heating up.

It is important that independent agency owners are aware of what we believe is either here already or on the horizon. The two critical areas to consider are … compensation and culture… to ensure your agency is protected from the imminent talent war.

There has always been fierce competition to attract the best talent, even during difficult times. There’s simply not enough of it to go around.

Today, the battle for talent is already heating up to the most competitive level we’ve seen in years. The bidding for the best people will only become even more intense in the coming months.

What’s happening right now.

All indications are that we’re finally coming out of the COVID-19 pandemic. During the crisis, many talented people with stable positions were too anxious or insecure to move to a new job with a less certain future. Job stability was more important than new opportunities and they stayed hunkered down in place (especially those with families to provide for).

That’s quickly disappearing. People are starting to change jobs again. Talent in general is feeling optimistic about industry-wide growth and what that could mean in terms of an exciting new role or higher compensation. Talent is now being recruited aggressively while they’re simultaneously considering changing jobs for the first time since February 2021. And some of them may be working for you.

Office Worker
People are starting to change jobs again

Talent is now being recruited aggressively while they’re simultaneously considering changing jobs for the first time since February 2021.

Agencies are now transitioning from sheer survival mode to actively pursuing growth.

Rising GDP and the expected increase in consumer spending should drive overall agency industry growth which will translate directly into a greater demand for talent. The increase in demand will then drive higher average industry salaries.

Four key steps to affording and keeping talent.

We foresee an upward shift in overall compensation, especially for senior and mid-level talent. We expect both salaries and bonus compensation to increase.

First, you should be closely tracking industry salaries now. Make sure your base salaries and fringe benefits are market-competitive (and stay that way). Don’t wait until year-end to assess your salaries in the face of an environment of increasing compensation. You’ll be too late and lose talent.

Second, lock in talent with robust annual performance bonuses coupled with a long-term incentive plan that rewards tenure and performance by providing them with a stake in the future. This plan can be limited to the people who drive your agency’s success. Losing a key senior leader can be devastating to most independent agencies.

Third, since talent represents your largest cost, increases in compensation should be reflected by increases in your agency’s hourly rates and retainers. Like any other business, agency owners must ensure their pricing reflects the true cost of providing services to clients.

Fourth, to some degree, you can fight back against talent turnover with a healthy culture. Said more forcefully, we have frequently found that the most successful agencies have exceptionally strong cultures. With enough care and commitment, your culture will help you retain talent and can even become a strategic weapon for your firm.