Exclusive webinar with David Sable + COR Awards 2024

#Resource Management
Turnover in Marketing and Advertising Industry

Get the best tips for managing your agency from COR´s Blog!

Turnover in Marketing and Advertising Industry and How To Avoid It

It’s no secret that the advertising industry has a real problem with its talent. According to ANA  and Forbes, the annual turnover rate is around 30%, the second-highest rate overall, after tourism. How do these numbers affect advertising agencies and the talent itself? What can we do as a collective, and as single agencies to improve retention? There are steps to be taken, we need to keep some distance from the groundless belief that the industry simply is destined to have a human resources issue forever. Let’s take a look at what is actually going on. 

Highest Turnover Rate in Agencies

Let us begin with the basics. Staff turnover rate is calculated by measuring the number of employees that leave your business in a year. Having a low agency turnover rate means that you have a stable workforce and that the work conditions, like healthcare benefits and company perks, your enterprise offers are satisfactory enough that the talent decides to stay. Having a high employee turnover rate is a worrisome metric, and it can be a symptom of unhealthy agency culture. 

Agencies have been having a retention problem for a very long time now, and the turnover gap suffered by the marketing and advertising industry has only been increasing. According to reports done by 4As alongside with LinkedIn show that the turnover rate has increased 10% compared to related industries. 

This data is of course spread out through the industry, attrition is not the same in digital marketing or digital advertising. It will also depend on the industry served if the agency is part of a holding company, a startup, a boutique business, or an independent operation. 

This is definitely bad for business, a thought that would ring true in any market, but it is especially alarming when we talk about professional service businesses. This is an industry that is service and relationship-based. Having a constantly changing talent pool can lower the trust brands put in an agency. An agency can only be as good as the talent that works there.

Almost half of the people leaving the industry cited poor opportunities for advancement and growth, according to MarketingDive. A lack of challenging work and projects from agencies was also a big issue, as well as unsatisfactory leadership. Salaries are also a big reason for attrition or migration to other industries, with an entry-level pay gap of around $45.000 compared to the in-house tech market, it’s no hard to see why.

But salaries are not the driving force behind the worrying metrics offered by LinkedIn. It is a multifaceted issue that has been going on for a while, and the main reason talent is shifting to the technological industry is related to poor growth opportunities.

Jann Schwarz, LinkedIn’s global director of agency holding companies said the following regarding this issue: “You’re never going to be able to outspend Google to attract talent. What you can do is tell a story that’s more compelling or tailored to the individual, about what it is they can achieve and accomplish, what sort of development and personal growth opportunities there are within the industry.” 

So if this problematic issue in the industry is known, why does it keep happening?

Why is This Phenomenon Still Happening?

If we try to picture the collective and social figure of an advertisement creative, we could arrive at a Mad Men show type of character. On the other hand, there’s a semi-grifter type of agent, who trades their creativity and ingenuity for a quick buck. This type of social fantasy is not a good representation for a complex and multi-layered industry like Advertising and Marketing. 

4A’s and LinkedIn’s survey can offer some insight into what is going on in the talent landscape. Their main input and recommendations are centered around a rebranding of their businesses under more honest and appealing light. Transparency can go a long way when human resources are involved, as well as a more data-driven mindset.


The big picture, painted in data 

There’s a reason we bring this social ghost, on the mentioned survey Advertisement Agencies ranked low as a place people would be proud to work in. Agencies were compared to 9 other competitive industries, they ranked on the lower spectrum regarding the ability to make an impact, challenging work, and culture that fits their employees’ personalities.  

However, they did OK on benefits, work-life balance, job security, and valuing employee’s contributions. This only reinforces that the retention problem is not born out of un-competitive salaries or bad benefit packages. Even if tech companies can offer better compensation, that’s not the main reason for the high turnover rates

96% of employees in the industry felt confident in their ability to find another job easily. Leaving is not a difficult prospect, The main reasons they are leaving are:

  • 54% percent of the surveyed agency workers cited the lack of opportunities for advancement as the main reason they left their last agency. This was the highest-ranking reason for resignation. 
  • 50% wanted more challenging work
  • 46% were unsatisfied with the leadership of senior management
  • 45% were unsatisfied with the rewards/recognition for their contributions
  • 45% were unsatisfied with the benefits

Although agency workers feel they could easily find another job there are certain barriers that keep them from getting a satisfactory job transition: 

  • 57% cited hearing back from the company after sending an application, although this issue is not necessarily special to the ad and marketing industry. 
  • 43% said that not knowing what it’s really like to work in a company is a barrier.
  • 39% found it extremely difficult to negotiate salary, title, role with their agency. 
  • 37% said being contacted by recruiters who didn’t provide them with enough information about the role or company.
  • 35% found it difficult when being contacted by recruiters who didn’t match them with the right role.

Empty perks

Agencies sometimes fall on the plastic and simplistic mindset of offering perks and office benefits they think are the only way of attracting and retaining millennial talent. Some of these benefits were staples of silicon valley’s turn-of-the-century differences with other corporative landscapes. 

But it’s been more than 2 decades, and some of the benefits offered are not rare, or truly workday change-inducing. Free lunches, unlimited vacation policies, the possibility of bringing your dog to work, espresso machines, a ping-pong table. These benefits can improve morale, and facilitate a more easy day-to-day experience.

As a result of the Coronavirus pandemic, many places now offer hybrid modes of working conditions, with fewer days in the office, and even allowing workers to remain at home if they prefer it. Again, a good thing to come out of the epidemic was a reassessment of how work is presented, and where we can work from. Knowing that working from home doesn’t have a negative effect on the industry’s revenue growth can allow for flexible hours.

These benefits are ok, but they need to be accompanied by a substantial talent training program to actually have an effect on the employees. There needs to be a structure for growth. An agency needs 3 elements to be able to keep the most talented and competitive players: work, fun, and growth. Agency culture can’t only depend on fun perks (like ping pong tables(.

Professional Growth as the way forward 

Keeping senior talent should be a priority when dealing inside a business vertical that stands on creativity and client relationship. We have spoken with David Sable many times, he has a strong opinion on the proliferation of in-house markets and tech companies luring talent away from agencies. He is a big believer in the importance of storytelling and incorporating new technologies in the industry.

He is also the first one to say that the industry devalued itself. And it is through technology and talent that it can improve. Training programs incorporated into an employee’s working hours, growth opportunities inside an agency, partnership possibilities, are the things that can actually make a difference. 


If your employees think that the only possible growing place for their career is outside your agency, then they have no reason to stay. Personal-tailored professional development for each team member and relevant webinar sessions can actually have a positive effect on the wellness of your turnover rates.

By dedicating a few hours each month for an employee’s professional development and growth, agencies can save an enormous amount of time and money, while keeping a good image and desirable working environment.

How Much is Turnover Representing Your Agency?

Long gone are the days’ skilled workers dedicated their whole career and best years to a single company. According to the Bureau of Labor Statistics, the average tenure for workers between 25 and 34 years is 3.2 years. This is even shorter in the marketing industry, with marketing specialists having one of the highest turnover rates at %19.8

When a new employee comes on board they require around 3 months to start reaching their full capacity. Adding that time gap to the cost of legal bureaucracy and hiring expenses,  you want that person to keep working for you. The cost of replacing an employee is estimated to be between 10% and 30% of their annual salary, according to a survey released by the Center for American Progress. So a low retention rate does not only destabilize the working environment and eats up work hours, but it also influences the overall bottom line.

Employee turnover cost is calculated by taking your vacant position coverage cost, plus the cost to fill the vacant position. And to that, you need to add onboarding and orientation costs plus the productivity ramp-up cost multiplied by the number of employees lost in that position in a given year multiplied by 12 to give you your annual rate. You need these data points in order to correctly estimate how much turnover is affecting your bottom line. 

  • Benchmark Employee Cost – The total departed employee’s compensation.
  • Vacant Position Coverage Cost – The number of days the position remains empty multiplied by the daily rate provided in your benchmark costs. 
  • Cost to Fill the Vacant Position refers to the HR employee’s salary, advertising costs, assessments, testing, and the cost of all time spent by employees involved in the interviewing process. 
  • Onboarding & Orientation Costs.
  • Productivity Ramp-up Cost, the cost associated with a new employee learning the ropes. 

For example, a 200 employee company with a %19 turnover rate, with an average $50,000 annual employee salary has an approximate turnover cost of $638,324 annually. 

Creatives and marketers have a huge amount of prospective jobs, as the working landscape changes from the traditional format, new opportunities are created every day. Freelancing, tech companies, in-house brand market, consultancies. There need to be something else agencies offer to keep the best talent involved from the get-go.

How to Reduce Ad Agencies‘ Turnover 

The first step into lowering turnover rates is to have an effective hiring program, this means having a targeted recruiting process, having control and knowledge of the metrics and KPIs that need to be fulfilled. 

Once the new employee is selected you need to have a strong onboarding process, among other important tasks. We encourage a data driven state of mind. In order to know who you need to hire, you need to know how your operation is doing. 

That means having reports on KPIs, data about profitability, and what type of services to develop.  In COR we want to improve the state of the ad and marketing industry, it is part of our mission as a company, and that starts with the talent.

Time Tracking as a burnout stopping point

Our solution has a time tracking feature that feeds task completion estimation and project length forecasting. When each team member gets a new task assignment, their available work hours are automatically updated, showing a real-time suggestion about how much time they have left for other tasks. This helps with scheduling and project planning.

If a team member is at full capacity it only takes a glance to know how much they have on their plate. This encourages a workflow that avoids overworking employees and eludes burnout.


In order to keep talent happy and onboard your operation there are some key aspects to take into account. Like offering competitive salaries, recognizing your employees, and rewarding their efforts. Offer feedback, have a strong performance review process and create growth opportunities. 

It sounds simple enough, but it can be hard to understand the specific needs of your employees when stumbling around in the dark. Information about your own operation can avoid making needless costs, it can help you invest money, time, and resources where they are really needed.

The real value of an employee’s work

COR is an all-in-one solution powered by AI. Its automated reporting is a necessary tool nowadays, with only a click you can access valuable insight, and cross-reference it with other variables in order to make data-driven decisions.

KPIs and tasks metrics can help you understand which employee excels, where they are most comfortable working, which tasks are easier for them, and where they need some help. For example, if you have a creative that is having trouble in a certain area, you can talk to them about it, figure out if they wish to pursue other types of services offered by the agency, or if they simply need some training in order to help. 

The work your employees do is valuable. But do you actually know how much revenue they bring back to the agency? With COR’s estimation features you can see the real cost each project generates in billable hours and in resources. When you manage to know the actual profit you make out of each type of service you can calculate the real value of each team member‘s effort.

This information allows you to negotiate better fees, improve profit margins, and knowing how much you should pay each employee for the value they bring to the agency. 

Turnover is a real problem, but with new technology and work methodologies, you can see where your agency needs an operational shift. You can know how hard your employees work, and where training is needed. With information and clear, transparent processes you can turn around the turnover rate. You can check out our solution, and request a demo today.


What are we going to talk about in this article?

Subscribe to our newsletter!

Get all the latest news about COR

You may also be interested in

Why Should You Know Your Consulting Firm’s Metrics?

Plan your resources in advance and improve your agency’s productivity

5 Keys to Improving Your Agency’s Profitability with COR

Three Negative Impacts of Rework and a Solution: COR

Overcome Excel’s Barriers with COR for Smarter Project Management

The Power of Clear Objectives: A Guide to Successful Projects

Eight Tips for Keeping Your Clients Happy Without Taking a Loss

From Chaos to Control: Steps to Efficiently Organize Your Team

Four Keys to Efficiency and Organization in Your Consulting Firm

Ten Tips for Successfully Organizing Your Projects: A Guide for Agencies