Digital ad agencies have a difficult time retaining employees. Why this is the case, and whether things will change.
Speak to any HR manager and you get the feeling that digital agencies - especially the small, independent ones - must be Teflon-coated. They just don't seem to make employees stick with them for long.
Digital, the new 'new' medium in India, has witnessed abundant interest from job seekers in the recent past. The trouble, however, seems to be that these seekers don't stop seeking jobs even after they have joined up. Six to eight months is par for the course, mourn many agency heads.
In the late '90s when standalone digital agencies got going, most of them adopted a start-up culture where working from a garage was in vogue. Later, the founders got 'like-minded' people to join the party. That is where they tripped up - getting people to work in a start-up mode was a tough task. The digital industry works on strict timelines where there is cutthroat competition both internally as well as externally. A start-up agency requires people who can run with the baton from the start and not everyone has the mindset to stay focused in an always-on environment.
However, there are levers that firms could pull to attract and retain good talent such as role clarity, remuneration, learning opportunities and company's branding strategy. To do all that, digital agencies have to think out of the box - and persuade their entry-level recruits to stay put.
Social media agencies - a digital agency by another name - that are being launched almost everywhere have a lower entry-level barrier for talent. Therefore, attrition at the junior levels could be higher since it doesn't require specialised training like media planning or search engine marketing or creative thinking.
"Many job applicants are also in discovery mode. They come in wanting to explore it because it is the latest thing but may find that it is not to their liking or that they don't have a clear focus on what they want from their careers," states Namrata Balwani, COO, Media2win. In content roles, for example, which form a bulk of the entry-level requirements, language becomes the dominant determinant of employment, but often the candidates face trouble in matching up to the language skill sets required for the job.
This is true not just for social media, but any young industry. "Social Media has good money and several companies are popping up each day. Freshers are overly focused on the salary, not on the career. Many of them are not even sure about the career they want," points out Rajiv Dingra, founder and CEO, WATConsult.
In 2012, the Indian digital industry witnessed a number of standalone agencies being acquired by foreign biggies (see table). Most of the digital agencies that were founded around the late '90s and early 2000s, have now become part of a larger network. So does having a bigger brand as the umbrella solve the attrition problem?
Hira has not seen frequent exits in either JWT Digital or Hungama Digital Services, the two digital agencies in the JWT Group. Nor had it happened earlier when, as chief marketing officer of NIIT, he dealt with digital agencies.
Mohanachandran disagrees saying that having worked on both the branded and standalone agency sides, he can confidently say that the grass is grey on every side. For the record, prior to founding AgencyDigi in 2010, Mohanachandran was executive director, digital services, OgilvyOne Worldwide India and Neo@Ogilvy India.
"Attrition among junior level employees is high due to remuneration and a constant need to upgrade current skills in a different role or function or company. Sometimes, there is a fascination with big brand names also," explains Deepa Seshadri, head, human resources, Ozone Media.
Mid-level employees in this industry seek out new opportunities mainly to improve their skills. For example, in case of a campaign manager, the need to develop optimisation skills across multiple platforms (web, mobile, social media) with exposure to different campaigns and ad technologies is attractive. Mid-level employees are, therefore, more patient with their career path.
"I wouldn't be surprised if the butterfly factor that afflicts brand loyalties among youth also hit agencies with restless junior-level employees experimenting frequently before settling down somewhere," opines Hira. Mohanachandran believes that the rot is largely in the mid level and especially with those who got into their first job in digital around 2006-07. He goes on to say that this was the year when every network agency hired wrong, paid wrong and retained wrong.
There has also been an emerging argument that the ever-flourishing deep-pocketed e-commerce companies are taking people from digital agencies with hefty salaries and appointing them as senior professionals in their marketing teams. But there are more complex and nuanced reasons.
E-commerce companies are seeing an increasing need for high performers and market leaders and hence they cherry-pick talent from digital firms which are exposed to the latest trends in the internet, sophisticated ad technologies and analytics. More often than not, the best talent in digital firms gets opportunities to work across multiple functional domains. This enables them to have a wider perspective, making them more attractive for e-commerce industry.
Also the glamour around e-commerce, which has suddenly become the poster boy of the internet world, is attracting more candidates. "But e-commerce companies are doing a disservice to themselves if they are over paying. In the long run an overpaid, under-scaled employee only does harm to the company and his own career," opines Dingra. It is a bubble that has to burst.
"This policy works in the short term. What if an employee switches jobs every 12 months with 50 per cent wage hikes for four years and then needs to settle down or look for an exit to a stable, mature organisation? Will he not have out-priced himself? The answers are evident, aren't they?" asks Hira.
Besides, an agency has to spend more time understanding the motivation of people who apply for the job. After a person joins, there should be an environment where dialogue can prosper and where there is constant feedback so that any employee who feels demotivated can express her viewpoint and have it addressed to the best extent possible.
The industry is still growing and the dust will eventually settle. In the long run it is the company that can manage cash flows well, inspire, groom and retain good talent that will survive.
A Note From the Editor
I have never ever worked for an established company. I began working in start-ups way before they became fashionable. So, when I read this issue's cover story, to my mind the core is not so much about the HR issues in a digital agency as about retaining employees in a start-up.
There are three types of employees. One, who will work only for large, established companies. Two, those who are happiest in small firms. And three, those who would be equally comfortable in either - though I suspect there aren't many of those.
Generally speaking, executives in small firms are likely to be paid less than those in larger establishments. In tech start-ups, early employees are compensated with equity stakes that could be worth a lot if the firm does well. In digital agencies, a share hand out is rare.
So, then, it is not for the money that young people join digital agencies. Some get in because they are still in the process of figuring out what they want to do in life. And agencies, by their very nature, are open to people with diverse backgrounds. This lot is bound to disappear as soon as they have figured out their path.
The rest are there for the sheer joy of working in a small place. It gives you freedom, a sense of control, a feeling of participation in creating something worthwhile besides enormous variety in work. Every day in office can be exciting because there is no knowing what one will be doing next.
I have discovered over the years that many of the people who like the idea of working in a start-up don't enjoy the reality of it. They find it stressful. However, they will stay if they find that the place is changing for the better - that it is growing quickly, it's happy, the compensation is higher and it is generally getting organised.
Whether that will happen or not depends in large measure on the entrepreneur. If he or she won't grow up, neither will the company. As someone once told me, "A company has to grow faster than the aspiration of its employees."
People will struggle cheerfully in a start-up for some time - as long as they know that it is heading somewhere. Everybody likes to be on a winning team.