As media agencies slash their graduate recruitment programmes in response to the advertising downturn, seasoned observers fear they risk creating a shortage of experienced staff in years to come.
But agencies have vowed to avoid the mistakes made earlier this decade, when they reined in graduate recruitment following the ad slump of 2000. By 2004, the media industry faced a shortfall of staff with three years' experience.
That skills gap, which continued until the present downturn, led to a bidding war for talent. Agencies had to recruit from outside the media industry, sometimes poaching staff from brand owners.
Jane Ratcliffe, chief executive of MediaCom, recalls: "We all sat around a few years ago saying: ‘Look at the skills gap that has been created,' so this time, it is beholden on us not to create that issue again." Like many agencies, MediaCom has pruned its graduate recruitment intake, although it has not axed it altogether (see box, page 24).
However, some agencies and media owners have put their graduate recruitment on hold completely this year. ZenithOptimedia declined to comment, although a job search on its website reveals there are no vacancies for graduates in the UK.
Meanwhile, it is understood Interpublic Group agencies UM and Initiative have axed their graduate programmes - although again, neither firm would comment. Media owners have also reduced their intake of graduates for training in sales roles: Trinity Mirror simply says it has a recruitment freeze.
But many media agency bosses claim they have learned their lessons and will not fall into the same skills trap as last time. For example, Starcom MediaVest reports it is actually extending its graduate recruitment programme this year.
Liz Nottingham, HR director at Starcom MediaVest Group, says the company retains strong contacts with Bournemouth University's media school and with West Herts College, which runs a marketing and communications foundation course. Some graduates are taken on from these courses, although the agency also hires using recruitment ads in Media Guardian.
Nottingham believes the downturn has made recruitment easier. She says: "It was difficult to find a good choice of talented people for media agencies pre-recession, but the situation has eased." She adds that agencies can gain from the financial crisis, as there are fewer graduate opportunities in the City, creating a greater choice of top candidates.
Recruits at Starcom are given a four-month induction, spending a week in each of 12 different departments to immerse them in the agency's different disciplines. Nottingham explains: "That way, when they are placed in a job, they have a broader view of how the whole agency comes together."
However, many agencies are hiring and training just half the number of recruits they took on last year and are also cutting training costs.
Jack Gratton, managing director of recruitment consultancy Major Players, says media agencies and media owners have both reduced graduate recruitment "dramatically".
He warns: "Unless there is raw talent coming in at the bottom end, this will create a huge vacuum." Gratton says agencies need to work around recruitment freezes and use internships and work experience to encourage candidates into the industry.
But there is positive news: Major Players has experienced a 10% uplift in recruitment briefs from media agencies over the summer. Gratton adds: "Media will come back from the recession, but agencies need to staff up with graduates now."
Media agencies hired about 500 first-year trainees in 2008, according to the Institute of Practitioners in Advertising's census, and this figure is expected to be about one-third lower this year. But the drop in new hires comes as agencies face up to the digital future and the accelerated demand for online skills, such as search marketing and interpreting data from websites.
Hamish Pringle, director general of the IPA, says: "Agencies are moving from the traditional media silos of TV, radio and press towards multimedia, client-facing teams. So there is a huge training and skills challenge."
Pringle bemoans the fact that clients are forcing agencies to cut costs and staff through tough negotiating positions adopted by procurement staff. He says: "What is frustrating for our agencies is that just at a time when the media process is becoming more complex, the clients are refusing to pay for it, and are driving media into a commodity status."
Graduate recruitment is affected by whether an agency has been on a winning or losing streak in terms of new business. Those that have won significant new accounts are pulling together teams from existing staff and can often fill some of the resulting holes with graduate recruits. But training cutbacks may mean these recruits learn on the job, rather than having a fully rounded programme of education.
Agencies' recruitment strategies are also influenced by management's vision of the future. The rise of integrated media teams will create demand for new types of skills. But agencies are under pressure to be leaner and meaner and to cut fees.
Tim Jones, HR director at Aegis Media, says: "The level of demands from clients to do more for less or to offer better value for less return will put pressure on our main costs, those of our people. We have to look creatively at how we use our people and the skills they employ."
Jones plays down suggestions by one recruitment agent that this will lead to "less account director fluff". He responds: "It is not that there will be fewer account directors; the client demands the most appropriate person on the business. Too much emphasis is placed on the job title rather than the role someone performs."
Paul Frampton, UK managing director of Media Planning Group, says the industry has become far more skilled at planning for the future, and he does not expect a skills gap to open up following the downturn. MPG has recently introduced Thomas Profiling for candidates: psychometric tests that indicate a person's most suitable skills.
He says: "In the past, media agencies have just played at human resources and personnel. But it is now fundamental that we understand the skill sets of people and get them into the right job."
Agency bosses and HR directors are confident the industry will avoid the pitfalls and head off the threat of skills shortages. But media agencies are heading into a very different world, one where it is likely they will employ fewer people.
Whether agencies and media owners are paying sufficient attention to their future needs will soon become only too apparent.
How to retain talent in tough times
1) Consider flexible working options
Rather than making redundancies straight off, ask staff to consider part-time work, home working, paid or unpaid sabbaticals, or taking an unpaid two-week holiday.
2) Don't forget your talent
Identify your present and potential top talent and review the list at board level. Give these people recognition. Keep the talent pipeline flowing through work experience, interns or graduate recruitment programmes.
3) If you have to make cuts, get it right
Before committing to redundancies, look at every other option for saving costs. The final cost of mistakenly removing a good performer while keeping an under-performer can be very high.
4) Introduce learning and development on a shoestring
If you are in a large group, leverage the skills in the network for training purposes. Invite senior people from related agencies to speak at lunches and ask clients to talk about their sectors.
5) Remember the importance of communication
Managing people's expectations is vital in times of change. Communicate with every employee and beware of "survivor syndrome" - talk to those left behind after changes.
6) Have fun
Leaders who are able to have fun with their team will increase the level of trust in their employees. For instance, ask for volunteers to run a team that spreads fun in the company from the bottom up.
7) Stay optimistic
Remember the good times. Stay upbeat and don't talk your way into recession depression. This may be the first recession many people have encountered. Discuss what it means and remind staff it is only temporary.
8) Review the relevance of benefits
Ensure benefits are appreciated by all. Offer a range of benefits, as one size may not fit all. Offer free breakfast if you do not already do so - it costs very little.
9) Consider corporate social responsibility
This can be a powerful motivator for staff.
10) Recruit top talent
Wrong hires can be costly and demotivate existing staff.
Source: Institute of Practioners in Advertising
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