Imagine you’re building a marketing agency (shouldn’t be too hard to imagine) and you’ve just hired your 17th employee. You’ve got an office manager, an admin, two sales reps, a paid search director, three ad managers, five account managers, a tracking and data feed specialist, two content marketers, and a finance manager.
Congratulations! This is an exciting time.
Now imagine that one of your sales reps gets a better job offer and leaves. Darn! Not a huge loss, though. The other sales rep had some bandwidth and you can handle some sales calls while you find some new sales help.
Before you can replace the sales rep, one of your account managers leaves to be a stay-at-home mom. You can’t really be mad at her for choosing to spend more time with her kids, but it puts you in a bind. You now find yourself taking client calls as well as sales calls, answering client emails, and doing a lot more “in-the-weeds” work.
You assign the office manager to replace the account manager first, then the sales rep. One silver lining about all of this is that you get to experience some of the problems with the processes your account managers are following and you task the office manager with fixing them. However, your office manager has been going through a lot at home and has had some grievances with your leadership style. She’s overwhelmed with her workload and “keeping the agency together by herself” and this recent problem you dumped on her lap was the last straw. She quits and demands that you “run your own circus”.
You now find yourself with 14 employees, down 2 key roles and one particularly helpful role. You’ve got to handle all of the office administration, employee satisfaction and accountability, several client relationship duties, finding new employees, and handling sales calls. You almost hope the sales calls don’t close so you don’t have to deal with onboarding new clients while also onboarding new employees.
This sounds like an extreme story that wouldn’t really happen, but it’s not that unrealistic. True, you may not experience 17.6% employee turnover in the span of a couple of weeks, but the average turnover rate for a marketing agency is cited anywhere between 25-30%, so an agency with 17 employees can expect to lose 4-5 employees every year. Losing 3 in the same month isn’t unreasonable, especially if the the reasons are correlated to compounding internal stressors.
The Importance of Employee Retention
Taking the story from above to its logical conclusion, we can imagine that processes would suffer, extra stress would be put on you and the other employees, service quality would suffer, if you wanted to hold it all together, you’d have to make some quick hires. After hiring with less due diligence than you probably should, you would then need to onboard and train or assign the onboarding and training to different employees who already have a lot on their plates.
Client experience would suffer as a result of having new employees that are being hastily trained, as well as the stress and chaos on the shoulders of your existing employees whose attention is split between training and their existent workload. You’d wind up losing sales and possibly even losing clients as balls are dropped and the persistent outreach efforts of competitors starts to look more appealing to your clients.
Employees are the lifeblood of a growing agency.
You can’t grow your agency without more employees unless you only grow your existing accounts or want to add on a bunch of services that you fulfill yourself. Even then, there’s a low ceiling to your growth potential. Hiring an ad manager and an account manager can allow you to double your client load from the 10-30 you could handle on your own (depending on account size) to 20-60. $10k-$30k/mo suddenly becomes $20k-$60k/mo. Yes, you’re paying about $10k-$15k/mo in extra expenses, but the upside is scalability. Adding one more client at $2,000/mo is way easier than raising your rates by $2,000/mo.
However, just hiring employees is not enough to grow your agency. A great employee is only great while they’re with you. If you can’t keep that employee, you can’t continue to benefit from them. This becomes more and more important in cases where the great employee affects client or employee relationships directly. As I’ve mentioned before, account managers are the face of your agency to your clients and being passed from one AM to another makes clients feel like you don’t value them (regardless of whether you have a choice in the matter). Losing an office manager, paid search director, or other leader can have a major impact on your employee experience and can lead to the loss of even more employees.
A last thought on this topic is that you should notice that I didn’t bring up how expensive employee turnover is in direct cost. This is well documented and I don’t feel the need to highlight more than the fact that you can expect the turnover of an employee to cost 3-6 months of their salary, which adds up a lot.
What If You Need To Fire Someone
Sometimes you don’t have a choice in the retention of your employees. Sometimes you need to let someone go.
Or do you?
This can be pretty nuanced. Some agencies let their employees go too quickly. The old ‘hire fast, fire faster” mentality that Gary Vaynerchuk preached before changing his tune dramatically to the “love and care” message (rightfully so) is a great way to hire bad talent in the first place and makes it super easy to fire great talent for minor offenses.
Firing employees is just a part of running a business and, though it can be hard, it’s often more like pruning to allow for healthier growth than anything nefarious.
But if you get into the habit of firing employees quickly, you may find yourself losing employees that just needed a break or firing employees for doing “bad work” when you haven’t given them what they need to do good work.
To clear up the confusion, I want to give you some guidelines for when to retain employees and when to let them go.
Keep Them:
- If you have a great employee that proactively communicates, takes the initiative to learn and grow their skills, and has great relationships with clients and their coworkers, but they change (suddenly or over time). These changes often come from challenges in their life outside of work and by acknowledging their difficulty and giving them a chance to return to their previous state, you can avoid the major pitfall of applying a permanent solution to a temporary problem.
- If they can’t perform the responsibilities of the role for which they were hired, but have valuable skills that can be used elsewhere in the agency along with a self-driven motivation to learn and grow. A smart, resourceful, socially proficient employee is a force to be reckoned with in almost any role. Some roles require more experience than others and it may be worth keeping an employee who was sub-par as an ad manager if you have room to move them to an account manager role or something similar.
Let Them Go:
- If they change (or if you just missed how bad they were in the hiring process) as mentioned above and refuse to pursue self-care, refuse to take responsibility for their mistakes or poor behavior, steal from you, or some other intentional immoral act that is very obviously a result of weak character.
- If they can not perform the responsibilities of the role for which they were hired and have no other needed skills with which to provide value to your agency.
In any other situation, you can generally coach your team members to excellence and gently bring them back to the level of performance or the type of behavior that is expected of them.
This is what great leaders do. They inspire greatness and coach their team to unlock the potential they see in them. They do not, however, hire people who can’t do the job and try to train and coach the to greatness. They hire those who exhibit great behavior and skills and coach them to greater heights.
I have spoken to many agency owners that said they hired for cultural fit and for attitude. This is a good idea, but only if the candidate also possesses the skill and knowledge to perform the basic functions of the role with excellence.
It’s an especially big bonus if the candidate is a self-motivated learner that buys and consumes courses on their own dime (though you can offer to pay for them if they work for you) and that reads articles, listens to podcast, watches YouTube videos, etc related to their desired role (or at least marketing as a whole).
Of all the people I’ve hired over the years and across all of the roles, there has been one trait that the best shared and it became an absolute must for all future hires: proactive communication.
I’ve hired ad managers that would work through a task list, run into a bottleneck, and just stop. Two weeks later, when I realized I hadn’t heard anything from them and hadn’t seen a finished account, I’d reach out and find out that they just needed analytics access or something simple like that. WHAT?!?! Two weeks of not doing anything because they wouldn’t just reach out and ask for what they needed? They couldn’t just do the rest of the account build and come back to that later? Or even ask if they needed access to keep going? That was the most extreme example I’ve run into, but it’s not worth putting up with (refer to the “When to let go” section above and respond accordingly).
How To Retain
So we’ve discussed (at length) why employee retention is important. We’ve discussed when it’s worth it to keep an employee around and when you should let them go. Now we can discuss (hopefully in fewer than 2,000 words) how to actually retain employees.
This is pretty nuanced, actually. Any time you’re dealing with people, things are bound to be rife with problems and complexity. The nice thing, though, is that we can still set up some guidelines for success that will act as a compass for you. You won’t have turn-by-turn instructions, but you’ll be moving in the right direction.
Here’s as solid a list as I can make while keeping this relatively concise (in no particular order):
- Don’t hire bad fits
I just went over this, so I won’t go super deep on it. Suffice it to say, don’t hire someone who will trample your values or ethics. Don’t hire someone who obviously can’t do the job.
A few points of clarification: People who don’t communicate are always a bad fit. People who refuse to learn are always a bad fit. People who can’t take correction are always a bad fit.
Don’t hire bad fits.
- Set clear role responsibilities
If you hire an executive assistant, but don’t tell them how to assist you, how do you expect them to do their job? If you hire an ad manager that doesn’t know how to set up conversion tracking, you can’t really be mad at them if you didn’t ask them about it as part of the interview.
As I’ve mentioned before, you’ve got to create a clear job description if you want to hire great talent and if you get lucky with great talent from a bad job description, you risk losing that talent when the bait-and-switch hits the fan. Best to paint a clear picture of the role up front and back up that picture with clear duties and processes when they come on board.
- Set clear processes
Speaking of processes, they’re super important for employee retention. Imagine you get a job at someone else’s agency and they do everything differently. You’re managing ads or whatever you were hired to do and they get frustrated because you’re not doing it “their way”. But they never told you their way! Then you get in trouble for overspending when you never touched the daily budgets. You ask what the client’s budget is and they can’t tell you, they’re just not used to spending so much.
Processes are essential to an agency’s growth. If you don’t have any processes, enough processes, or the right processes, your employees will call the shots for each individual scenario and you’ll have a disjointed and inconsistent batch of freelancers, rather than an agency.
Look at the services you want to provide and lay out the primary steps you need to take each time. Then fill in the smaller steps needed to get from one primary step to the next. You don’t need to tell your experts how to do their jobs. They’re the expert, not you. You do need to tell them how to work together with others to fulfill the service for your clients, though, and make sure they maintain a consistent level of quality.
- Set clear expectations
Similar to the points about responsibility and processes, you need to communicate your expectations. This can be done through a clear job description and through processes, but it can also be done through all-hands meetings, one-on-one meetings, email or slack updates, and any other form of communication.
Setting expectations with your team is an ongoing thing. Just as you need to set expectations when onboarding a new client, you need to set expectations when onboarding a new employee. You then need to reiterate those expectations (at least the most important ones) here and there to remind them and emphasize their importance. As you think through and adapt your expectations to the changes in your growing team and client base, you’ll need to continue to update your team on the changes to your expectations. “Here’s how we need to respond to this type of situation”. “Here’s how quickly we need to respond to client emails”. “Here’s how you should react if a client is rude or verbally abusive”. “Here’s how to handle time-off requests”. And so on.
- Communicate early and often
When you recognize that your expectations have changed, or when you realize that you’re frustrated with a particular team member, or when you have a problem that you want to solve… You need to communicate that to your team.
Your team is there to help you! You can’t expect to work well together with others if you don’t communicate. As anyone who knows anything about relationships will tell you, you have to communicate your thoughts, feelings, expectations, desires, frustrations, etc with someone if you want to maintain a relationship with them. This is doubly true when your relationship is based on that person working for you.
In most cases, your employees are just trying to do their job well and keep you happy. How can they do that well if you don’t communicate with them how well they’re doing and what you want from them?
- Be open and honest
It’s not enough to just communicate with your employees, you have to communicate honestly. Being honest doesn’t mean being rude, but it does mean that if you’re not happy with an employee’s behavior or performance you should tell them. You can be diplomatic, but you should be clear.
This is also the case if you are thrilled with an employee’s performance or behavior. Tell them! If you only provide feedback to your employees when they do something wrong, they’ll begin to think that they’re doing a bad job all the time and will get discouraged and possibly even leave.
Whether good or bad, be honest with your employees about how you feel and what you want from them.
- Be available
And how can you communicate honestly with your employees if you never see them? Even worse than you not communicating with them, they won’t communicate with you if you don’t give them the opportunity.
Let your employees know that they can reach out to you and set up a time to chat if they need to. This obviously becomes more difficult if your agency has 50+ employees, but you should just delegate in those cases. A leader needs to be there for your employees and the employees need to know that they can come to that leader with any problems, ideas, feedback, requests, or anything else that could affect their job and their relationship with that leader and/or their coworkers.
- Seek to understand, then to be understood
See how all of these are connected? If you make yourself or a leader available to your employees, you’d better listen when they come to you. Don’t just react defensively to every problem they bring to you. Hear them out and try to get to the heart of it. Do they feel like you don’t value them enough? Why? What would make them feel more valued? Do they need more money? Do they want to have a voice in how things are run? Do they just want a compliment every now and then?
Everyone is motivated differently and money doesn’t solve all problems. Most motivations can be boiled down to the desire for significance and the desire for love and acceptance. If they’re not saying they can’t pay their bills, what’s the general theme of the feedback? Is it problems with people? They may not feel like they have to change who they are to be accepted, or they may be trying too hard to fit in. Is the problem mostly with the type of work or clients they work with? They may feel like their work doesn’t matter.
- Provide A Progression Path
All of the “fluffy” stuff aside (about as fluffy as the rabbit from Monty Python and the Holy Grail…), you want to hire great talent, right? The best talent is the most likely to leave because they have other options. Bad talent is easy to retain because nobody wants them and they usually know it. They’ll stay until you make them leave. Great talent is always getting job offers. Even when they’re not, they have enough confidence to know that they’ll be able to land a gig at another agency without much trouble.
Keeping great talent happy is essential and the above points can help with most of the hard part. However, great talent keeps getting better. If you leave them in the same spot doing the same thing, they only way they can do work that matches or challenges their level of skill is by taking a job somewhere else. Ad managers become paid search directors, account managers start leading account manager teams, devs become senior devs, and sales reps become sales directors or just start their own agency.
If you have a great ad manager and you plan to hire another, ask if they want to be a senior ad manager. Some people don’t want added responsibility, but would accept and grow into it if the pay made it worth it. Others are chomping at the bit to prove their worth and want to do so in a leadership role.
For those who refuse to do something different (often those best suited for ad management and data/analytics roles), they often want to do the same thing on bigger accounts. Giving your employees a path to more responsibility, more money, and more value in the company can mitigate any attempts from other agencies to snipe them and can keep them from ever wanting to look for a job elsewhere.
Summary
If you want to retain your employees and enjoy all of the benefits of said retention (not having to pay to acquire and train new employees, not having to explain to clients why they’re seeing new faces every few months, not losing quality of service, but gaining it instead, etc), you’ll need to create the best employee experience possible. Employee experience is exactly what it sounds like. The way employees experience working with you.
All of these points above affect employee experience and the better an employee’s experience with your agency, the less likely they’ll be to take other offers or seek out jobs in other agencies. The better employees in your agency will always be at risk of leaving from one of these two factors if you don’t intentionally design an employee experience that focuses on them as both skilled laborers and human beings.
The best way to keep your employees happy is to treat them like valuable human beings that you like and respect. Trust them and prove to them that you’re trustworthy. Business is about relationships. Foster them well and you’ll be rewarded with loyalty.