The U.S. advertising industry employs 453,500 workers, with 180,500 employed at ad agencies. These agencies shed almost 7,000 workers in the last four months of 2008, according to the latest data from the Bureau of Labor Statistics. Significant layoffs continued in January.
While the staffing cutbacks are dramatic, industry financials reveal a bleak future. Publicis Groupe media agency ZenithOptimedia predicts that U.S. ad spending will fall 6.2 percent in 2009 to $161.8 billion, compounding the pain of a 3.8 percent decline in 2008.
Although recruiting is at a standstill at most agencies—particularly those that rely on auto and financial services accounts—agencies with health care and packaged goods clients are still hiring. And at niche agencies serving those sectors, the recession has made it even more difficult pull in the passive candidates needed to meet ongoing demand for highly specialized talent.
Health care advertising agencies, for example, are still hiring from what remains a very small pool of candidates with a specific mix of creativity, advertising experience and health care industry expertise.
"In health care advertising, we still see a real shortage of qualified candidates," says Alison Lalli, an in-house recruiter for Grey Healthcare Group, a niche advertising agency for the health care industry.
Grey Healthcare employs 750 administrative, creative and executive-level employees, with 250 based at its headquarters in New York. Clients for the firm's services include Pfizer, Johnson & Johnson, Wyeth and Medtronic.
"For the entry-level positions, we can recruit from a larger pool, but above that, applicants without agency experience or from outside the health care industry find it very difficult to meet the skills we need," Lalli notes.
Although high unemployment rates now facilitate recruiting for many job titles, hiring candidates at the top of the skills roster remains challenging. The unemployment rate for job seekers with a bachelor's degree or higher stands at 3.7 percent, a full point higher than in September—before the economic downturn sharpened, but still within the range of full employment.
Advertising is a top-heavy industry, with more than 40 percent of all jobs classified as managerial or professional positions. Most positions, including entry-level jobs, require a bachelor's degree or higher. Despite the downturn, long-term job growth forecasts for the industry remain above all-industry projections.
Candidates with formal training, industry experience and a proven track record are in short supply. At Grey Healthcare, Lalli and her colleague Antonette Poli handle all recruiting for the New York office. That means filling 40 to 50 positions a year, including some that attract only two qualified candidates. The recruiters turn to outside recruiting firms only for temporary positions or urgent-need cases.
During a downturn, the passive candidates that Grey Healthcare and other employers need commonly retreat into the perceived security of their existing position rather than incur the risk of changing jobs. These risk-averse passive candidates require targeted recruiting resources.
Recruiters must be prepared to devote substantial time to understanding the candidate's career goals, which often drive the employment decision. Recruiters must also pay special attention in selecting the best representatives to meet with the candidate and be prepared to redefine the job.
At Grey Healthcare, Lalli and Poli have crafted a simple but fruitful approach to the difficult challenge of filling jobs in what remains a highly competitive market. They focus on investing time upfront with the hiring managers and building relationships with passive candidates, even those who show no interest in a position.
When a position opens, Lalli and Poli meet with the hiring manager to define the skills, knowledge and behavioral characteristics required for position. For each open position, the hiring manager must submit a list of the three skill areas that they believe are crucial to performing well in the job. Lalli and Poli also carefully review nonflexible requirements such as the amount of travel required.
The hiring manager, a human resources representative and the executive vice president of the division all sign off on the requisition.
"The details are authorized from the beginning so we can move quickly to make an offer," Lalli says.
For the initial search, the recruiters utilize their contracts with Monster, Yahoo HotJobs and a pharmaceutical advertising network. They also tap their own professional contacts and pursue potential applicants referred by candidates and employees. For passive candidates, they rely heavily on their own database.
Candidates who pass through a phone screen with Lalli and Poli are invited for a face-to-face interview with the two recruiters.
"We use behavioral and skill-set questions, with the same questions put to all the candidates before we send them on to interview with the hiring manager," Lalli reports.
Both recruiters meet with the hiring manager after the interview. Candidates may also meet with agency team members to get a better sense of what they might gain from working with talented professionals at the firm.
When a qualified candidate passes through the interviews successfully, Lalli and Poli move quickly to make the offer, usually within a day or two. During periods of economic uncertainty, a quick offer is an important part of easing a passive candidate's concerns about leaving one job for another.
Lalli and Poli negotiate the starting salary. The requisition includes the authorized range. "It can be tricky if we have a candidate with competing offers," Poli says.
To go beyond the starting range, they must request approval from human resources, the executive vice president for the division and the CFO. Their average time-to-fill from requisition to hire is 30 days.
Prying passive candidates out of their existing position requires an approach that is specifically tailored to the ad firm's culture.
"Passive candidates are our most talented candidates, and from the very beginning, we stress the training and growth opportunities that the agency offers," Poli says. "We leverage our ability to attract top passive candidates and then sell them a great growth opportunity."
The recruiters map out the career paths for passive candidates and the time frame for advancement.
"We also offer a rich culture and the opportunity to work with a team of talented people," Poli says. "When candidates see a strong team dynamic, that's attractive. We emphasize the whole package: career development, strong teams, good pay and benefits."
The recruiters provide candidates with information on all aspects of the agency's broad range of disciplines, which helps candidates understand the full extent of the opportunities within the firm.
"We also discuss the firm's competitive benefits package, including tuition reimbursement, which is very important to applicants," Lalli says.
Lalli and Poli stress the importance of ending interviews and all communications with candidates on a positive note. They notify unsuccessful candidates about their status, thank them for their time and interest and explore any possible future employment opportunities.
"Because the talent pool is so small, it's crucial to maintain relationships," Poli notes. "The challenge is always to find new talent."
The recruiters also conduct exploratory interviews on an ongoing basis, even if there are no open positions. These interviews build the recruiting database and help the recruiters refine and update their understanding of the issues that might make passive candidates willing to change jobs.
"We contact passive candidates and invite them in for an exploratory interview and a look at the agency," Poli says. "We then contact them once a month to update them on what's going on at the firm and to ask them how they are. This pulls in passive candidates. They are impressed by our interest in them and by our open communications."
Protecting the prize
Lalli and Poli remain involved through the onboarding process to protect their investment in landing candidates for the agency's hard-to-fill positions.
"Turnover in the industry is very high," Poli notes. "After six months on a job, many employees in the industry begin to think about other opportunities. Professional employees in our advertising division may get two calls a day from other agencies. It's rough."
The recruiters recently revised the onboarding process to extend it well beyond the initial two-week training and orientation program. They now conduct a 30-day follow-up with all new hires that includes a confidential survey and a 90-day performance checkup with the new hires and their hiring managers.
The 90-day checkup reviews the three critical skills areas that the hiring manager noted for the position and the new hire's performance in them.
"The decision to formalize and expand the onboarding process arose from our objectives for improving retention," Lalli reports. Lalli and Poli use time-to-fill, turnover and retention metrics to evaluate their work.
The recruiters see internal recruiting as a central part of their job and the key to successful staffing. They work closely with the in-house training team and human resources to maintain a strong internal pool.
"Grey Healthcare provides great training for junior employees to build the pool of internal candidates," Lalli says. "In a perfect world, we would be able to fill all of the higher-level positions internally, but we can't always do that."