San Francisco ad agencies are redoubling their efforts to sign up entry-level staffers using in-house recruiters, hefty cash bounties for those bringing in new talent and re-evaluation of training and salary scales for new employees.
The moves by Citron Haligman Bedecarre, GMO/Hill, Holliday and Goodby, Silverstein & Partners are aimed at luring prospective employees away from better-paying clients and dot-coms. They come as both the American Advertising Federation and the American Association of Advertising Agencies issue warnings that the industry needs to raise salaries or lose talent to other industries.
Last week, Wally Snyder, AAF president-CEO, told attendees at the group's annual conference that attempting to draw young workers--many holding four-year college degrees--with a starting salary in the low $20,000 range is part of the industry's staffing problem.
"Agencies have to do a much better job getting talent to the industry," he said. Of the initial salaries agencies are offering young hires, he said, "They've got to raise it. Salaries in advertising must go up if we are to compete with industries paying better wages. Professional passion only goes so far when you can't pay the rent in New York."
Similar concerns were a prime topic at the Four A's annual meeting in May, where agencies were offered a new recruiting video touting the excitement of the profession. At that meeting, incoming Four A's Chairman Phil Dusenberry also stressed the need to attract prime creative candidates during his address.
A HUGE GAP
Currently at agencies, there's a huge gap between the haves and have-nots. At the top, advertising industry salaries are expected to rise about 11% this year from 1999's average of $163,000, according to Advertising Age's salary survey. But according to a September 1999 proprietary study by the Four A's, the national average for starting salaries was $22,600 to $31,000 in 1998, rising to the $23,000 to $32,000 range in 1999. Agencies with billings of more than $45 million paid slightly better: $26,000 to $31,000 in 1998 and $27,000 to $32,000 in 1999.
West Coast agencies in particular have been feeling the talent shortage as dot-coms have aggressively recruited with stock options and other perks. Even clients have begun to compete for talent, and the area's high cost of living has pinched young hires.
Citron for example, has hired three full-time recruiters. Tom Bedecarre, the agency's CEO, said Silicon Valley companies often have in-house recruiters because they view gathering talent as an essential company function.
"There is an economic reason for doing it," he said, adding headhunters often don't know enough about an individual agency's corporate culture and might not put the agency's interests first.
His shop has doubled from 75 to 150 employees in the last 10 months and also offered $250,000 in bounties to those employees who successfully bring in new recruits.
When Goodby asked for employee comments on working at the agency, one respondent noted it took two weeks' wages to pay the rent on an apartment shared with two others. Goodby executives said the shop is reconsidering its salary scale.
Goodby and a number of other shops also have begun to formalize and augment the training they offer younger employees. GMO/Hill Holliday, for example, is instituting a formal training program.
"You have to help them build their careers," not just expect new employees to handle menial tasks, said Nancy Hill, president of GMO/Hill, Holliday.
"We have to recognize people aren't willing to make these investments [of time in working at an agency] because a media-related business is glamorous," she said. "We've got to give them ways to make themselves more marketable."
GMO/Hill Holliday also is using its new office building to house students and offer programs from the Miami Ad School and Virginia Commonwealth University Ad Center.
"We are hoping to bring these people into the business and give them a good experience," Ms. Hill said.
Meanwhile, Ms. Hill and a number of other executives said they believe they are beginning to see a few good signs. With the ongoing dot-com shakeout, some disillusioned former employees are starting to trickle back into the agency ranks.
Copyright June 2000, Crain Communications Inc.