PUBLISHED MARCH 2021
Why would anyone want to work for you?
Hiring, one of the most challenging aspects of running a digital shop, is becoming significantly more difficult. Employee retention isn’t getting easier either. Let’s look at why and some steps you can take to help.
The war for talent has always been tough. We’ve heard countless times about how difficult it is to find quality talent, even when the offered pay was above standard ranges. So why is hiring becoming more difficult? Remote work is a trend that many companies have adopted over the years, but with the pandemic, pretty much everyone was forced to work remotely. Now that workers have experienced this change, over 80% are reluctant to return to the traditional office setting. This change of preferred working environment is directly impacting the size and competitiveness of the talent pool . Related, is the expected growth coming out of that pandemic. There is a mad dash across industries to staff up to handle this growth spurt, and this rapid hiring is affecting salaries and benefits. Between the expectations of employees for an updated (remote) working experience, and the need for agencies to hire top talent to meet goals, hiring and retention have moved to the forefront of the challenges faced by digital shops.
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Remote work and what it enables
Like it or not, remote work in some form or another is here to stay. Multiple surveys (like this one from Harvard) have shown that most employees are going to want to work remotely for at least 2-3 days a week. While digital shops were early adopters to the idea of remote working, the majority of agencies still operated within a traditional office setting. The talent that worked remotely pre-2020 looked very different to the talent that aspires to work remotely today. They represented the highly skilled, highly paid specialists who could work wherever along with the lower skilled, lower paid, contracted employees who were typically hired off-shore. It was rare for a non-senior or non-entry employee to work remotely pre-2020. What the last year did was introduce everyone, including the entire middle section of the talent pool, to a remote environment.
A long-lasting consequence of this is that you as an owner/manager will need to become comfortable managing a remote team. There are owners who we’ve spoken with who are desperate to return to the “before times” and get everyone back in the office from 9-to-5 Monday through Friday. These owners will unwittingly contribute generously to your available talent pool. We expect to see talent gravitate even more towards shops that cater to flexible work than they did before. This presents an opportunity for the shops that are comfortable with this type of working arrangement already.
Everyone’s stressed and looking for an easy out
In recent client surveys we’ve performed for digital shops, while both management and employees have reported increased stress levels, there’s been a clear disconnect between the amounts reported by each group. Non-managerial employees at digital service firms have reported higher stress levels than managers. We believe this is contributing to the significantly increased turnover we’re seeing in the industry. We believe there is a “grass is greener” effect combined with some upward salary pressure (described below) happening which is driving many employees to seek new opportunities.
Hiring competition has exploded
Unfortunately, you’re not just competing with other shops. You’ve always partially shared a talent pool with the big tech firms, in-house brand teams, and tech consultancies. The only ones who were historically open to any kind of remote options were the big tech firms. Now though, you’re seeing the in-house brand teams and tech consultancies embrace remote teams. While your talent pool has expanded to new geographies, so has theirs. The main challenge this creates for digital shops is upward pressure on salaries. While you’re on a fairly even playing field with in-house teams, you’ll almost always lose out to big tech firms when it comes to salaries and bonuses.
The second reason for such a surge in competition is the widespread growth and strong sales pipelines coming out of the pandemic. The talent that can help meet demand quickly is typically going to be higher priced which, we believe, is why so many shops are experiencing turnover in their more senior positions. We expect this to flow to mid-level talent through 2021.
What can you do about it?
Look at your firm and try to objectively answer the question: “Why would someone want to work at our digital shop vs. their other options?” Keep in mind that their other options now include big tech firms, in-house brands, and consultancies. We’ve compiled this list of key areas to focus on to make hiring and retention easier:
Have a lived mission statement that resonates with your target talent.
This isn’t fluffy nonsense that goes on some buried “About Us” page to die. Now that the choices of where to work are expanding, employees are likely to choose to work for firms that have similar values. Showcase how you live these values, and the opportunities employees have to experience these values. Identify and define the culture you want prospective employees to experience, and plan how to share it with them.
Play up interesting work.
If you work with interesting brands, share that, now is not the time to be shy about your client list. Who you work with can be just as important to prospective employees as the type of work being done. In surveys we’ve done for clients some have shown one of the main reasons employees chose their agency to work at was the brands they had as clients. By putting these opportunities out there you can make your client list work for you.
Match your hiring and employee expectations to your actual work.
If you want to hire smart people who solve interesting challenges, make sure you’re giving them interesting challenges to solve. There’s always a certain amount of monotony to get through but make sure you’re hiring matches the types of projects you do. We see time and again, employers over promise and employees leave. This is a big reason for turnover, especially for developers. Remember, employees are looking for a challenge, to grow their skill sets, and work on interesting projects. Set fair expectations, by being upfront with the work they will experience.
Understand the advantages of your size agency.
Many people choose to work at smaller shops because they believe they’ll have more of an influence. Operate in a way that does more than pay lip service to this. This is especially important with your more senior employees. If you hire experts, give them the ability to be experts.
Balance your bureaucracy with efficiency and give employees a framework to be successful.
Finding the right amount of structure is critical. Too many shops that move from ~10 employees to ~25 employees try to layer on bureaucracy and rigid procedures too quickly. Your business is evolving quickly at that stage so be flexible. Conversely, shops in the 30-50 employee range don’t have enough documentation and/or policies and procedures. That’s the range where you dial these things in and prepare for growth. By providing the right balance you can enable your employees to be successful without excessive managerial oversight.
Ensure you’re staffed appropriately and that teams aren’t overworked.
This is more for retention than hiring but it’s critical now that sales pipelines are swelling. Pre-2020 it was much easier to flex capacity and lean on additional hours from employees to get projects across finish lines. After this past year, many employees are approaching burnout and stretching talent when it has other options is a recipe for disaster.
The work environment you create, even the virtual one, must be respectful at a minimum and the baseline should be for work to be generally pleasant. It’s tempting to hire fast and to overlook bad behavior because “we have to get the work done, what choice do we have?” but by putting up with bad actors it can set your shop up for a cultural death spiral. Good talent has too many opportunities to tolerate unprofessional environments – and they will leave. You can find the book here.
Appropriate pay and benefits are now a standard, not a perk.
Know the going rates for your key positions and pay accordingly. Salaries make up an average of 2/3rds of a digital shop’s expenses which makes it a tempting place to cut. Now is not the time to risk losing good talent due to penny pinching. . Utilization rates and pricing are better levers to pull in this environment.
Learn to do remote well.
There is a learning curve with all new things, and employees understand. Remote work is here to stay, and employees are demanding more and more flexibility. Senior talent already had the option prior to 2020 and now mid-tier talent will demand the option. We believe the safest way to play this is a hybrid office system with asynchronous-first communication being the standard. Continue to learn, iterate, and improve.
There’s work to do
The competition for hiring is quickly heating up. Review your processes, culture, and goals and set your shop up for success by taking action early. We’ll be monitoring this going forward so keep an eye on our Insights page for updates.
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