This definitely brought back memories (mostly negative) of my days at J. Walter Thompson. I remember that we had an “unofficial” hiring freeze for about a six month period. While, no official edict had come down from the corporate decision makers in the UK, all senior executives understood very well that any new hires had to be approved in triplicate form by the top brass, or there would be hell to pay. This reality meant that a typical hire could take a long time to be approved (in some cases four to five months). So, the effect caused many firms within the global network to either just give in and find ways to maximize current talent (as they had lost the stomach for fighting against the system), or become ultra creative to work with outside talent, but not officially hire them. This often included fudging the use of consultants/freelancers or even offering people jobs, but being very creative in how their salaries were hidden within a larger cost structure.
Of course, the only ones that really felt the collateral damage with these across the board freezes, were clients. Think about it. Let’s say there are over 200 individual marketing services companies in a typical advertising holding company. I guarantee that even in the worst of times, at least five, ten or even 20 of those companies are doing just fine because their businesses ran counter cyclical to the masses. As a businessman, I understand the need to cut costs and protect the larger entity as a whole, but the 5-10 percent of firms who still need to hire because business is coming through the door, can’t when this mandate is set. So, what happens? Clients are promised x, y and z in terms of quality and quantity of talent to service their account. And, you can bet your bottom dollar that some of that is sacrificed because as much as the agency rants and raves to higher level management sitting in their ivory towers, the resources needed, simply can’t be allocated. A secondary evil that then transpires is that very good account and creative leaders and managers within those well to do agencies start walking out the door. They are frustrated beyond belief and have had quite enough with the big agency model. Sometimes the domino effect ensues because the delicate agency balance between having really great talent to service new business and top accounts diminishes once the anger and frustration spreads.
Any way you slice it, across the board hiring freezes are just dumb policies. This whole topic is kind of ironic considering that agencies are only in business to service clients in the highest way. So, the big, public holding companies (without saying it) actually advocate doing the opposite during bad times through these poorly created mandates.
Big, bureaucratic policies like these, which have no room for flexibility to meet the most basic client needs (and demands), represent some reasons why we started Peppercom in the first place. When times are bad, it’s understood that sometimes resources need to be let go and adding staff just can’t happen. But, most independent firms are smart and would never just implement something so inflexible as a cast in stone hiring freeze. Instead, it’s about understanding which marketing or communications areas clients need the most professional help in. Then, if necessary, these smaller agencies make trade-offs or just plain invest their own money to ensure that clients are being served they way they promised to. Profit levels are often sacrificed when this happens, but that’s understood. The public agencies can do no such thing because they are under the constant pressure of their investors.
I’m not a public holding company basher (at least, not usually). It’s just that this practice has been happening for so long and just hasn’t changed. You’d think someone at the top would get it (finally). But, I guess not.
Recent Comments