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Three things all agencies need to know about retaining their best talent
We all know that retaining talent in agencies is a challenge and with 65% of agencies planning on recruiting this year, the war on talent will be getting even hotter than ever before.
Following Wow's 2017 Benchmark Agency Survey, we spotted what the top-performing agencies are doing to retain their best talent, what the hidden costs are of office perks, and ,ultimately, how you can retain your key staff in 2017.
Office perks - What everyone else offers
In today's hiring market, perks are essential for attracting and retaining top talent. According to Glassdoor's Employment Confidence Survey, 80% of employees would choose additional benefits over a pay rise. Those considering whether to accept a job offer report that benefits and perks are a major factor.
When we asked agency owners what they offered their staff in terms of benefits, flexible working was the top answer. But with 73% of agencies now offering flexible working as standard, can this really be considered a perk any more?
To help stand out from the crowd, agencies are getting increasingly creative when it comes to staff benefits, with many offering entertainment setups in the office, free food, yoga, gym membership, plus Netflix and Spotify subscriptions. Check out what agencies currently offer their staff below:
Beware of hidden costs
Whilst the cost of a night out with the team is easy to see on the P&L, there are hidden tax costs associated with many traditional office perks offered by agencies. For example, did you know that if you offer any of your team regular benefits, e.g. private medical cover, gym membership or a company car, you'll need to complete an annual form for each employee called a P11d, detailing the tax that they need to pay.
In addition, if your agency has a beer fridge, regularly provides food for staff, or pays for trips to the pub, then HMRC require you to complete a PAYE Settlement Agreement to avoid your employees paying tax on these benefits. All of a sudden, those perks become more expensive than they looked on paper.
If you offer any of the above benefits to your staff, get in touch with us and we'll let you know what your tax obligations are. Inspections from HMRC are on the rise, with agencies an obvious target, given the amount of staff entertaining that has gone on previously (and not just in Mad Men). All a HMRC inspector has to do is search for those Dominos Pizza receipts in your accounts and you could end up with an unexpected tax bill (and potential fine).
The most effective way to retain staff
So, are all these benefits actually worth it? When we asked agency owners what the most effective way of retain staff was, the overwhelming response was 'training and development.'
This anecdotal evidence is backed up by the numbers too, as retention rates were far better for those agencies that invested in training and development. For example, 36% of staff said that the reason they left their agency in 2016 was to join a larger agency. This figure reduced to 9% in those agencies that invested in training & development. This group were also more likely to achieve their growth targets (78% vs 54%) and had higher Revenue Per Head than the average agency too. In fact, every agency with Revenue Per Head greater than £100k said they invested in training their staff.
With the average agency in the UK expected to lose 17% of their staff in 2017, now is a great time to invest in the training & development of your team.
We've seen a number of clients move from annual appraisals to quarterly or even monthly reviews. Why wait until the end of the year to review progress with key staff members? Encourage each team member to produce their own personal development plan, and work with them regularly to show them a path from where they are to where they want to be (and how they can achieve their dreams within your agency, rather than with someone else).
If you'd like to find out what the UK's top-performing agencies are doing when it comes to recruiting and retaining talent, take a look at our Agency Survey. It's free to download and there are some great stats in there.
Peter Czapp is a director at The Wow Company
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