Does adland’s jobs boom show companies cut too deeply last year?

The advertising jobs market is heating up as client demand and adspend have bounced back in 2020, in some cases above pre-pandemic levels, which has led to higher employee churn and pushed up salary inflation.

Mark Read, chief executive of WPP, told Campaign at its Q2 results that the strength of the recovery has “surprised many people” and this year’s staff bonus pool should be two and a half times 2020 levels. 

And John Wren, chief executive of Omnicom, warned: “We are seeing some pressure on our staff costs, particularly in the US as the labour markets remain tight.”

Anecdotal evidence of candidates receiving multiple competing job offers also points to a hot recruitment market—in contrast to a year ago during the first lockdown.

At that point, the global ad market plunged with dire predictions that UK ad expenditure would drop 16% in 2020 and some companies made savage cuts. WPP, Omnicom and Dentsu each lost 6,000 posts globally last year.

However, the slump proved short-lived as conditions improved in Q3 and Q4 and the annual decline turned out to be more like 8%, according to figures from Warc for the Advertising Association.

What’s more, revenues have turned strongly positive this year. That raises an important question: does adland’s jobs boom show companies cut too deeply last year? 

Ete Davies, CEO, Engine Creative

The current scramble for talent suggests the answer is yes. But context is important. Faced with the most dramatic disruption to our industry in 20 years and with no real idea how long it would be until things improved, for many of us it was necessary to manage our costs to “survive”. At the same time, demand for digital capabilities accelerated, client pressure on cost-efficiency and ROI increased, which required us to restructure parts of the business. These factors had been in the works for a while, but the timeline to adapt to them went from years to months, in the space of a few weeks.

Shannie Mears, co-founder and head of talent, The Elephant Room

I think it shows that adland has a real shortage in finding exceptional talent from all places and spaces. Last year meant we had to be adaptable, resourceful, think quickly about how we use talent in the best efficient way. But what it also showed is that we just simply aren’t doing enough for talent from a value perspective in the first place. So why choose us as an industry if we don’t fully recognise the potential and value on the first go? Why is it taking a global crisis and a BLM movement for an industry to act as one to do something about getting the right type of talent through the door and making sure they represent the world we live in today? I don’t think it shows we cut deeply, I think it shows our methods in how we choose to work need to be disrupted otherwise we will face even more challenges in the future.

Justin Pahl, CEO, VMLY&R London

The job boom is just another indication of how the advertising industry is emerging in 2021. Clients’ priorities have changed. Adland is growing in new areas, which requires new blends of talent. So, while we were blessed in not having to make major cutbacks here at VMLY&R, we still find ourselves hiring a host of new talent.

New expertise combined with greater consideration of personal priorities also signifies a rewrite of the implicit rules of a job role. 

From Plymouth to Edinburgh, and beyond… to appeal to the very best talent, the industry will have to balance radical geographic flexibility with the undeniable truth that being together regularly in person supercharges the culture, creativity and enjoyment for most people. 

The office will need to become a desirable destination, worthy of a trip, and the agencies that get this balance right will come out on top in the talent race.

Paul Bainsfair, director-general, IPA

We are a people business. They are our number one asset but they are also the biggest cost base. Any agency cutting jobs will have done so as a last resort. Both the immediate impact of Covid-19 and the surrounding and ongoing uncertainty made for desperate times which, unfortunately, as we know, can lead to desperate measures. But brighter times are now upon us. 

As the latest IPA Bellwether Report revealed, a net balance of almost a third of UK companies are expecting their employment levels to be higher in three months’ ti­­­me than they are now. This signals the strongest hiring intentions since we began recording employment prospects in the third quarter of 2016, and up significantly from their nadir of -50.3% in Q2 2020.

By ensuring agencies have a full complement of diverse talent, they will be able to make the most of the forecast uptick in adspend.

Helen Kimber, managing director, The Longhouse

In part, yes. It’s clear there was an industry-wide over-culling. Our roles transformed into counsellor meets coach, trying to maintain people’s sense of confidence, with mid-level feeling the greatest impact.

However, this was compounded by a myriad of factors: lifestyle/life stage choices, exploring alternative careers and/or moving out of London, with many people returning to their home countries.  
Autumn 2020 saw an over-indexing of freelancers to compensate, with businesses still reticent or unable to make longer-term investment further driving people to rethink career paths.  

However, the current boom across both permanent and freelance certainly bodes well for recovery and the economy as a whole.

Ed Brooke, partner, The Leith Agency

Arthur Conan Doyle said: “It is easy to be wise after the event.” Staring down the ever-lengthening barrel of the pandemic did require some form of action, but I think once the graphs settle we’ll see the stark difference in behaviour between those who owned their destiny and those whose destiny was owned.

The former perhaps trimmed their sails more gently and creatively – conscious of the wider human effect – while the latter possibly hacked too hard to satisfy unforgiving shareholders or institutions. Like clients, good people are harder to find than retain. Advantage to those who held their nerve. Sorry, Arthur.

Julie McKeen, head of media, Odgers Berndtson

Agencies were trying to balance the books and keep up with constantly pivoting client requirements during the pandemic, with no playbook and critically, no idea how much worse things were going to get or how long they would last. There’s no question that the loss of junior support staff if those were let go will be felt hard now and there will be learnings there, but at mid and senior levels what will be interesting is whether the skills and backgrounds agencies hire from now are largely very different to those they had in place beforehand. As client business models change so must agencies, so this could create a seismic shift as new mid and head level hires are brought in.

Jonathan Emmins, founder, Amplify 

More than any single piece of work, win or award Amplify's greatest achievement of last year was "keeping the band together". As the pandemic hit, every business owner and leader faced shared and unique challenges. We’re an independent: our founding mantra is "we're only as good as the talented individuals who choose to call Amplify home". It was an easy choice to make a commitment to the team right at the start of April 2020 that "we were going to do the right thing and not make any redundancies". 

This had two advantages. Firstly, in 2020, when many agencies went quiet, our team was able to lead from the front. A shared vision and the team’s strategic thinking, creativity and capability resonated with clients, existing and new. The short-term benefit was winning 22 new clients. More importantly, our reputation grew and we were able to expedite the growth of new areas of the business. We challenged existing formats, pushed creativity, innovation and integration harder than ever before and maximised previous investments in innovation, content, broadcast and creative technology. As an agency it allowed us to do five years plus of growing up in 18 months as clients looked for solutions. 

Secondly, this ensured we entered 2021 with an even stronger agency culture. Not only do we have all our original superstars, whose talent, breadth, bonds and ethos make the agency what it is today, but in a competitive market place our reputation and commitment has enabled us to recruit more than 30 more talented individuals from a mix of backgrounds. Collectively this talent, existing and new, are already enhancing Amplify's culture and work.