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December 28, 2009
She Went Out For Coffee

While being led on an office tour, an observant client asked “Where is Mary hiding?” Mary, an AE who worked on the client’s account, was let go just weeks before the client’s arrival. As they made their way down the hallway, our manager asked “Has anyone seen Mary?” Bewildered by the question, most of us uttered faintly “I haven’t seen her,” while one person blurted “She went out for coffee!”

Without skipping a beat, the tour continued. So much for transparency! This act of trickery spoke to the lack of communication that inundated our agency. Fearful of the potential reaction, our agency’s owner (we’ll call him ‘Mr. Big’) neglected to tell the client about Mary’s departure. Instead, we allowed the misconception to propagate.

Agencies, as we know, have notoriously high turnover rates. Even before the economic downturn, employees dropped like flies – voluntarily or involuntarily. The speed of the revolving door is enough to make your head spin! With each exit and entry, I wondered what implications this had for the agency, my career and the industry as a whole.

As it turns out, the negative implications are plentiful. The cost of turnover is approximately 150% of an employee’s salary. With an employee’s departure, agencies face reduced productivity, along with recruitment, administrative, and managerial costs. Employers continue to sustain losses as the new staff member undergoes orientation and is ‘brought up to speed’ before he or she can fully contribute to productivity.

And the costs don’t stop there. The churn and burn philosophy upheld by many agencies is unsustainable and wreaks havoc on multiple levels. Because agencies operate in a service-based industry, high rates of employee turnover can have a profound impact on client satisfaction and retention. Employees can make or break the client/agency relationship. When there’s a continual shake-up in staffing, the client relationship is jeopardized. Customer satisfaction and future profit are at stake, not to mention the agency’s reputation.

Not surprisingly, clients cite rapid staff turnover as a top complaint about working with agencies. A new staff member must become acquainted with the client’s business and develop a relationship with key decision makers.

Unabashedly aware of this phenomenon, ‘Mr. Big’ expected employees to stay a maximum of two years. Perhaps it was a self-fulfilling prophecy, but most did in fact stay only two years – if that long.

Content to chalk it up to generational differences, ‘Mr. Big’ did little to investigate or reverse the trend. Instead, he relied upon an ever-increasing talent pool, preferably young and inexpensive female talent. And in doing so, ‘Mr. Big’ rarely promoted anyone or shelled out a commensurate salary. What’s more, the revolving door caused important policies and procedures to fall between the cracks and prevented any form of continuity.

To avoid irreparable damage to agencies and the industry, something’s gotta give! The current model is costly and dysfunctional. Agencies analyze their clients’ business to tears but oftentimes don’t take a second look at their own brand. It’s time agencies evaluate their own business and identify what they can do to retain talent and prevent losses.

With an economy in dire straits, agencies cannot afford high turnover rates. And while some level of attrition is inherent in any industry, the prevalence in the agency world is disturbing. Employees are the gems that create, imagine, discover, inspire, achieve, unveil, reason, and collectively drive the firm to success. And since agencies’ bottom lines rely upon human capital, retaining them should be the first order of business!

Recognizing the causes for turnover is the first step to improving. Research points to inadequate compensation, flawed managerial style, lack of recognition, unsuitable company culture, limited opportunities and organizational instability as causes. Also noteworthy are the elements that retain employees, including work-life balance, trust, mentorship, and flexibility.

Appreciation is a cornerstone of any retention plan. By thanking someone for a job well done, ideal behavior is reinforced. Employees who feel appreciated are more confident in their abilities. They are typically the most engaged, and therefore most likely to stay.

A retention plan should also include a rewards component. HR gurus believe a mix of intrinsic and extrinsic motivators effectively manage and inspire staff. Combined, these motivators can successfully yield desired results in employee behavior, while providing personal fulfillment for the individual.

In this day and age, work and personal identity are inextricably linked. Employees are ready, willing and able to give their all for the agency that will invest in them.

Stability will be a critical success factor in 2010 and beyond. Fortunately, according to HR experts, approximately 94% of turnover is preventable. Building retention programs at every level will ensure that intellectual, relationship, and financial capital are preserved for years to come.

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Alicia Diaz-Verson, a marketing and PR pro, has multi-faceted experience in various industries, from building products to lifestyle. Her services include campaign strategy, media relations, marketing and event planning. She has worked with brands like Hilton Hotels, Fresh Market, Simon Properties, Trader Vic’s, Mr. Steam, among others. She works in Atlanta as an independent contractor, providing customized PR and marketing services.

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