question of the week
Show Me The Money: Attracting Young Talent In An Economic Crisis
Will raising the average starting salary entice young people and solve the industry’s talent shortage?
17 January 2024
It’s evident, and has been for some time, that a talent crisis is plaguing adland. Between 2019 and 2022 the number of people working in marketing and advertising fell by 14 per cent, according to the Advertising Association (AA). Though these years included a pandemic and subsequent layoffs, industry professionals will undoubtedly find the sheer drop in workforce worrying, with the AA warning the sector that it needs to “stem talent loss and attract new people”.
A job in advertising is undoubtedly an attractive proposition to many, offering creative expression, business insight and influence, fast growth and progression and perhaps most importantly the potential to impact real change through brands and media. So, surely young people in particular would find a career in advertising to be appealing?
Well, maybe not. In a time of unprecedented economic strife, the cost of living crisis and inflation - which has just risen unexpectedly for the first time in nearly a year, to 4 per cent - a spotlight has been thrown on the industry's rates of pay for junior staff. The average starting salary in the sector is a woeful £24,000, just £697.50 more than the London Living Wage which stands at £23,302.50, with the national minimum wage equating to £18,964. There’s no doubt this doesn’t help the problem.
Raising this figure to attract entry level talent is a surefire way of encouraging the brightest graduates to reconsider a job in the industry, so independent agencies Pablo and St Luke’s have done just that; both recently announced that they’re raising the minimum annual salaries to £30k. The ‘Pablo Living Wage’ hopes to tackle both the diversity crisis in advertising and soften the cost-of-living impact for junior staff. St Luke’s decision is also a response to the challenges the industry faces in both recruiting and retaining entry level talent.
So, is enticing young ambitious minds into the industry with an attractive wage the answer to its talent shortage? What are both independent and network agency leaders doing to ensure the best creative people are being made aware of the personal perks of working in advertising?
Claire Hollands, CEO, MullenLowe
Should we be looking at raising starting salaries? Absolutely. Living costs are only going up, rising travel, energy bills and rent are all increasing year on year making it even harder to start out. All this means rising costs for agencies too, which hits harder when Clients continue to want more for less; budgeting and salary planning is becoming harder as clients move to a project-based model. All said, our people are our best asset and so we must find ways to make this work. We were one of the first agencies to be accredited as a London Living Wage Employer, but we are proactively reviewing our starting salary rates as well as those with up to 2 years experience to make sure that we are retaining and attracting the best talent and we hope to make changes in our next salary review cycle. We also look at what additional streams of support we can provide our people, from breakfast on our core office days and Thursday drinks to financial education sessions with independent financial advisors aimed at helping educate and advise on how to navigate finances. Ultimately, investing in our people is the way our business will thrive.
Larissa Vince, CEO, TBWA\London
I’m still a firm believer that working in creative companies can be a big draw for talent. There aren’t many industries where you can be involved in creative ideation even as you just start out, and where it’s possible to progress so fast based on talent and initiative. By the way, this is not just a belief – the IPA Council did a session on it a while back, and we heard that from the mouths of the young talent themselves.
That said, we do 100 per cent need to recognise that our people need to earn at a reasonable level even when they are starting out – otherwise we risk only attracting people with families who can subsidise London costs of living. That’s not right, and it’s also not going to deliver the diversity of thinking that we need to be able to create work that appeals to all parts of society.
Thankfully, lots of agencies are now actively addressing this issue and creating meaningful change. Last year, we gave a blanket 10 per cent pay rise to everyone here who earned £40k or below. What I loved was how everyone in the agency – not just the people that benefited – really appreciated that this was a brilliant thing for the agency to do. Raising entry level salaries is another great way to address this, as is offering subsidised rent. Of course we can do more as an industry, but I think we’re making some decent progress.
Harriet Knight and Hannah Penn, joint managing directors, Pablo London
The average starting salary in the advertising sector today is still only £24k. That’s little more than what we started on 15 years ago. In real terms that means starting salaries have declined ~35 per cent over the course of our careers. It’s totally out of touch with the demands of the industry and of life today. And we wonder why the industry is facing a talent crisis. Last year the UK ad industry recorded the biggest annual rate of staff turnover in more than a decade, as problems including burnout and pay led to advertising losing its edge in the battle to attract and retain creative talent.
Add to this the fact that only 8.1 per cent of the 1.9 million jobs in the creative industries are filled by those from under-represented groups. Low starting salaries mean workers from lower-income backgrounds, without support from the bank of mum and dad, simply cannot afford to take a job in the advertising industry.
The beauty of advertising is that you don’t need any formal qualifications for the job – across the variety of disciplines it involves skills and experience that you can very much learn. Which should make it the most inclusive and diverse sector, but the cripplingly low starting salaries make it a luxury most cannot afford. And we are the poorer for it.
Which is why in January 2024 we launched the 'Pablo Living Wage' guaranteeing all full-time staff a minimum annual salary of £30,000. Within a week of us launching, we were inspired and hearted by St Luke’s also announcing their commitment to increase their minimum salary to £30k. The more of us that can do this, the better for us all. Our sector is really unique in that very few people move into it later in their career, so the pursuit of top-tier young talent is vital. Advertising should not only be an exciting career prospect, but one which is also financially viable from day one. We hope this first step starts to do just that.
Neil Henderson, CEO, St Luke's
The decision to raise our entry level salary to £30k looks like a dramatic giveaway but it was actually a pragmatic decision. It came after discussions with our junior people who spelled out how challenging it was to live in London on £25k and pay off any of their student loans. Rent increases, the eye-watering increase in the student loan interest rate and rising energy costs meant things weren't adding up. Advertising entry level salaries have increasingly fallen behind other sectors and so it was time to make the move. We want to attract the very best people and see them grow and have brilliant careers with us. Pablo had obviously come to the same conclusion and we are delighted to be part of the movement they started. I hope we see other agencies joining in.