6 Tips to Reduce Employee Turnover and Increase Retention Rates in Agencies
Read time: 11 minutes
Many agency owners would agree that employee turnover is one of the most costly challenges they need to encounter. Compared to other industries, creative and advertising agencies have a tough time keeping the dream team intact with a 30% churn rate. This means you have to re-educate a completely new team every 3 years!
If you manage a creative agency, you are aware of how heavily your services and clients’ satisfaction depends on the calibre of your staff. That’s why a high employee churn rate will be a bummer and hurt your productivity.
If you are looking for strategies to keep the talent at your agency, you have come to the right place. At Function Point, we have worked with various agencies of all sizes and understand the human resource challenges in the creative industry. In this article, we will examine the root causes of employee turnover and identify the top 6 methods for increasing employee retention. Let’s dive in and explore how you can create a supportive workplace where everyone can shine and contribute.
What Causes Employee Turnover?
While the reasons that make a person quit their job may vary, they all have a negative impact on your staff retention rate. Here are some common factors:
1. Dissatisfied Compensation
Pay matters, big time. It is one of the primary reasons for an employee to leave an agency. Talented people typically look for employment opportunities with high salaries, plus extras like health perks or additional bonuses. Unfortunately, not every marketing agency can afford salary raises for their personnel, as most of them are SMEs and don’t have as strong financial resources as MNCs. If you only compete in terms of compensation, you’ll easily lose your talents to other companies that offer more attractive salaries.
2. Lack of Career Development Opportunities
Anyone would love a career path with clear signposts. For example, a junior copywriter can have the chance to become a senior copywriter, then a content leader, and a marketing manager.
You can’t keep your creative team excited and dedicated to their jobs if they don’t see how they can advance in your agency. A clear growth direction will make them willing to do their best and reach higher levels. And of course, they won’t look elsewhere if they’re happy with their current jobs.
3. Bad Work-Life Balance
The agency world is known for extensive overtime work. Numerous agencies ask their employees to work continuously without proper breaks. This is because creative projects frequently necessitate multiple rounds of revisions. Gradually, this overwhelming workload will lead to burnout and turnover. To address this, you must allow your staff to balance work with personal life to refresh their minds and bodies.
4. Ineffective Leadership
You may have heard the adage, “Employees do not leave bad jobs; they leave bad managers.” The relationship with their managers is something one would think about when deciding whether to stay or leave. Nobody wants to work for incompetent managers who are difficult to get along with and have irrational expectations. If they feel underappreciated or mistreated, they probably will not stay for very long.
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Reduce employee turnover and increase retention rates in your agency
How to Reduce Employee Turnover at Agencies
Now that you’ve known the main reasons for employee churn, let’s look at the 6 best practices to keep your top talent loyal:
1. Offer More Competitive Benefits
As mentioned above, pay and benefits are major reasons why workers switch jobs. As an agency owner, you need to stay updated on market rates and offer fair compensation for your employees. Reviewing employee performance on a regular basis, such as once a year, is a good idea. You should give your employees the pay raises they deserve based on their abilities and contributions. Additionally, to express your appreciation for their efforts, you might think about giving out bonuses for successfully completing projects. By doing this, you can reduce turnover related to pay issues.
While raising salaries is ideal, not all agencies can easily do so like large corporations due to budget constraints. That’s why you should consider another approach to keeping talent: improving culture and workplace happiness. This leads us to the next employee retention strategy: leadership and culture.
2. Strengthen Your Agency Culture
You cannot ignore the importance of culture in staff retention. One of the keys to employee retention is a supportive work environment. Creating a place where everyone has each other’s back is golden. It helps to have clear directions, encouragement, and a little bit of gratitude.
Communication with transparency is the key point here. Ensure that everyone feels free to speak up and be heard. It can be very beneficial to hear what your employees have to say and act on their suggestions. An employee is far more likely to stick around if they believe they are making a difference at their agency.
Next, after a successful client campaign, celebrate your achievements and recognize outstanding employee contributions. For instance, you can hold a post-project meeting to acknowledge people’s efforts and gather feedback for improvement. Create a culture of support and ongoing learning within your agency.
Furthermore, organize team-building activities to bring people closer. Quizzes on problem-solving, interactive games, workshops, etc. are some game formats to think about. Participating in team-building activities will help everyone develop trust and learn how to work together most effectively when they actually work together on projects for clients.
3. Adopt Work Flexibility
Maintaining a work-life balance can seem like a luxury in the fiercely competitive agency industry. However, you must guarantee that your team members have a healthy work-life balance if you hope to keep top talent on board over the long haul. Otherwise, they may leave due to burnout and stress.
Everyone has a personal life, so be considerate of the needs of your staff members to relax and maintain their well-being. Consider implementing remote work options, flexible scheduling, and vacation policies. Some options to consider are a hybrid work model, a project-based contract, a part-time schedule, or a full-time career. Give your staff the option to work how it best suits their needs. You can give your staff the option to work remotely on one or two days per week, as they see fit. As long as they can maintain their productivity levels, give them the freedom to choose between working from home or an office.
Check out how Function Point can help you manage your agency remotely.
4. Create Meaningful and Challenging Work
Talented people do not just work for money; they look for meaning in their work. If they think something is important, they will give it their all. So, agency owners should add a dash of purpose and show the ‘why’ behind the ‘what’. For instance, if your team recently produced a campaign that benefits the community or aids in spreading awareness of a social issue, they will be pleased with it.
In contrast, if they only perform their duties because “the boss asks so” or “the client asks so,” they may easily lose interest in their work and eventually quit.
Here are a few suggestions if you want to integrate meaning into your agency work and keep employees happy:
- Encourage fresh thinking: Grant your employee some time to explore industry trends and look for inspiration. Allocate a portion of their working hours (i.e., 5% or 10%) to learning new things or trying new solutions.
- Foster ownership: When you assign a project to your staff, let them handle it with full accountability. Trust your staff and make them responsible for the results. If they feel they can make an impact and have ownership of their work, it will be harder for them to walk away from it.
- Share the outcome: After the project is finished, reflect on the process and share the result with the entire team. inspire pride in your employees for their role, encourage them, and praise their efforts.
5. Support Professional Development
Dreams need a stage and a career GPS. Your employees will prosper if your company encourages career development.
To achieve this, your advertising agency needs a career development framework that can be customized to each person’s growth plan. The goal is to give employees the opportunity to advance in their careers by picking up new skills. For small to medium-sized marketing agencies, consider these ideas:
- Encourage reading by providing a monthly allowance to cover the price of books relevant to the jobs of your employees. You can start a book club where people can discuss the books they enjoy the most and share their thoughts.
- Pair up employees in your organization for mutual learning. For example, a fresher seeking expertise in a particular area can collaborate with an experienced person to gain knowledge and develop skills.
- If you want to equip your team with specialized skills, you can invite a consultant to train them. Although this is more expensive than the other options, it can quickly develop the skills of your team without taking too much time away from internal leaders.
- Keep in mind that you should review their progress and objectives on a regular basis. Ask them for feedback and see how you can further support their growth.
6. Hire The Right People
If you’ve selected the wrong team member in the first place, it’s no surprise that they eventually quit. Staff with mismatched values and beliefs cannot stay with your agency for long, which negatively affects your agency’s turnover rate.
While you can receive impressive résumés of applicants, if they don’t fit well with the rest of the team, it’s best not to bring them in.
So, how to know if a person will be the right missing piece for your team?
Let’s look at your agency’s values and culture. This can be your compass for recruitment. First of all, list out the people who are great colleagues in your agency and the characteristics you love about them. Then, think about those who don’t seem to be a good match with the team: what values do they miss?
Develop a recruitment framework based on this information to guide your hiring process. You need candidates with the right skills and mindset who can adapt to your working style. This is how you form a bond that is hard to break.
Attracting and hiring the right people will allow the new hires and the existing team to quickly get along and cooperate on projects. Get that right, and you’ve got a team that’s in sync.
Benefits of Reducing Employee Turnover
Above are the tips that will help you decrease employee churn. You may ask, “How does my agency benefit from a lower turnover rate?”. Here’s how.
- Increased consistency: It’s crucial for agencies to have a consistent work approach and processes when doing projects. This is exactly why a team of loyal employees is better than a team that changes personnel all the time. A stable team can help boost your agency’s productivity because they are familiar with your workflows and procedures.
- Stronger client relationships: Long-term employees understand the clients’ personalities, preferences, and the most effective way to communicate with them. Customers are more likely to remain loyal when they feel heard and supported by their agency. However, when an agency has a high turnover rate, clients may become frustrated if they don’t know who to contact, and projects can suffer.
- Saving money: Agencies with high staff turnover incur much higher costs than those that keep their employees. When you factor in recruitment agency fees, income lost because of open positions, and the time needed for interviews and onboarding new employees, the hiring process can become expensive. Once you reduce the employee turnover rate, you can minimize these expenses, saving you time and money to invest in more important aspects of your agency.
- Positive culture: Long-term employees live and breathe the agency’s values and mission. This harmony creates a motivated and engaged team, which is your agency’s most valuable asset.
A solid talent retention strategy is essential for any agency that wants to grow. Maintaining talent is more than just a checkbox; it is about optimizing your agency’s performance. You need a strong team with a common goal and passion to succeed. Follow the six best practices outlined in this article to lower your agency churn rate and position your agency for success in the creative industry.