Why we go home less happy

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Fortune Magazine recently published its annual list of the "Top 100 companies to work for." Not one of them was an advertising agency. We researched the past five years of Fortune top 100 employer lists with the same result: not a single agency in five years.

What kinds of companies make the list? What characteristics do they share? Is this simply unimportant to agencies? We used to say, "Our inventory goes down the elevator every night." Is that no longer true?

I don't think agencies have stopped caring about employees or ceased trying to treat them well. Creative awards are doubtless more important to agency people than employer-of-choice to draw and keep talented employees. So why no agencies on the Fortune list?

We cannot claim agencies don't make the list because of client pressures unique to professional services. Law and accounting firms face these pressures yet they show up year after year.

The most important predictor of a company's presence on the list seems to be its financial health at the time of selection. All chosen had the profits to fund extra benefits. But making the list is no guarantee of profitability (or survival). Enron's gone. They made the list until last year. So is Arthur Andersen (#67 in 2001). San Francisco law firm Brobeck, Phleger & Harrison (#78 in 2002) recently decided to cease operations after financial difficulties prompted a mass exodus of its lawyers. Corning made the list in 1999 but disappeared soon after its profits evaporated and its stock price tanked. It's unlikely employees are still treated to "free rides on the company plane to New York City."

Benefits cost money and agency profit margins have declined, making it difficult to afford extra paid leave, fitness facilities and subsidized daycare. Clients don't want to see their agencies spending a lot on employees-even if they made the Fortune list themselves.


In an experiment, I called four of my agency's clients, and I asked two what they would think if we won a spot on Fortune's top 100 employers list. "That'd be great," replied Client A. "It'd show you care about your employees, and about the quality of work," said Client B.

I asked the other two what they would think if we offered additional vacation time, a state-of-the-art fitness facility with personal trainer, and tuition reimbursement for any education employees wished to pursue. Client C punted: "You can do anything you want; it's your company." Client D replied, "I'm not sure that'll go over in this market." Then I asked all four whether it would be worth paying a 5% increase in the agency's rates to afford these investments. You can guess the answer.

It's not only about perks, though. Like many agencies, we watched good people with great potential go to the client side. Certainly the pay and benefits are better. But the real story is what they say about their new jobs. Far more control. No pressured clients screaming for you to fix problems they themselves created. Not having to work weekends. Not being paged. No time sheets. And a measure of respect and courtesy from their internal clients seldom accorded them when they served those clients as agency employees.

How did we come to this? For their part, agencies have not consistently demonstrated value to clients. Too few take pains to carefully connect the work product to client marketing objectives and strategy beyond "building the brand." In today's short-term mind-set, ad expenditures are increasingly regarded as inelastic: Spending more does little; spending less does little. Consequently, advertising continues to get marginalized, and the premiums advertisers are willing to pay for good advertising by good agencies become hard to justify. Agencies' compensation and profits decline, affecting their ability to reward employees.

Clients share the blame. It is not uncommon to work with ad managers with little formal training or experience in the field. Many view agencies as vendors, and have difficulty creating the partnership necessary to make great advertising. Because they also have trouble understanding an agency's work product and the results it achieves, they find it hard to stand up for the work or the agency. Too often distrust and misunderstanding result, creating greater professional dissatisfaction for agency employees.

An agency's inventory still goes down the elevator every night, and, although agencies and clients realize this on some level, the inventory goes down less happy. Until more professional relationships can be formed between clients and agencies, until agencies can prove their results and clients can recognize them, and until agencies are able and clients are willing to properly reward good work and good agency employees, Fortune's top 100 list will be a few hundred places too high.

John Huppertz is managing partner-head of research services at Eric Mower & Associates, Syracuse, N.Y.

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