But to what extent do agencies create this situation -- either acting alone or, in many cases, under the mandate of some holding company -- and to what degree is this "people under-utilization" brought about by the diktats of clients?
Clients' expectations of agencies typically play a hand here. The client imperative is, to a greater or lesser degree, to profitably sell product. Agencies' role in overall management of this process has diminished, while management consultants' role has increased. The agency is viewed less often as a business-solutions provider and more often as a source of commoditized media solutions. Seen in such a non-consultative light, clients can more easily demand involvement in all aspects of delivery of the commoditized product -- including talent, which, for agencies, is the key resource.
So what are agencies' expectations of clients? Most importantly, agencies want the seat at the table that they've lost in recent decades. They also want to make reasonable margins and have the freedom to build their brands and their reputations, which will lead to more business. This can be achieved only with the ability to attract, develop and manage talent. This requires the agency to build a great culture, a place where people want to work.
Having spoken with a range of senior agency executives and clients, the consensus is that clients are having an increasingly constrictive effect on the way agencies recruit and manage their people. One agency CEO told me that in the past year two of his clients were "totally unreasonable and unpredictable in the talent they expected on their account." Meanwhile, a senior-level PR executive told me, "We have to fire the client!"
Effective deployment of agency personnel is the agency's responsibility, but lately it's been subject to the demands of clients that, under pressure, are squeezing the agency and its budget. Increasingly reduced tenures are creating a generation of CMOs who are unprecedentedly demanding, and a challenging retail environment is requiring more tactical initiatives. These things are not in themselves issues, but, as one agency executive commented, "What's concerning is the client's getting involved in the management of our accounts and the teams of creative, media and planning resources devoted to them."
Agencies end up either feeling direct or indirect pressure to shift their hiring strategy; the agency senses the tenure of the relationship with the client is coming to an end and feels the only way to save the account is to provide a new team. Ad hoc changes in and of themselves are not so terrible, but if these effects are magnified across a range of the agency's accounts (and most clients feel increasing pressure to cut costs and drive sales), managing staffing needs in a proactive fashion becomes an extremely tricky game of musical chairs.
So what of the counter-argument, that clients do not have a huge effect on agency talent management any more than they have in the past, or, for that matter, they have every right to constrain agencies? The fact that agency relationships have always been king and that, directly or indirectly, the client has always had some level of influence is understood as a key aspect of an effective partnership. The fact that this influence is somewhat greater in a harsher economic environment leads one to ask, "What's all the fuss about?" And, now more than ever, there has been an interchanging workforce, with many former clients working in agencies and agency executives working on the client side. So perhaps there is a greater understanding of what actually happens behind agency curtains, and this will lead to greater client input. Clearly the one paying the bills has every right to demand an end-product that delivers a promised service, while the agency has a right to choose under what terms to deliver it.
That said, there still needs to be a separation of church and state. Otherwise, why hire an outside agency in the first place? A successful client/agency partnership requires upfront, clearly set and mutually agreed upon QSMs from clients, and the agency needs the freedom to manage talent and other resources as it sees fit. This is not to say that there aren't times when clients might become more involved with key talent issues. But in 2009 there is an increasing prevalence of marketers wanting to meet proposed agency hires, and, depending on the quality of the agency/client relationship, this can either be agreed upon or viewed as a loss of control -- and a source of festering resentment.
From an agency perspective, the loss of ability to manage its own house and, in particular, its people and its culture is a slippery slope to the destruction of its own culture and brand identity.
|ABOUT THE AUTHOR|
Stuart Parkin is a New York-based career coach and executive recruiter. He has 20 years of experience in agency new-business and marketing and has worked on four continents across agency disciplines. He has run Sparkin, his New York-based consultancy, for seven years, working with a range of traditional, multicultural, digital and PR agencies including DDB, Rapp, SpikeDDB, Porter Novelli, Dieste, Fallon, Berlin Cameron and Organic.