Losing the Battle for Talent
Patrick Allossery
National Post, October 2000


The Lure of High-Tech Salaries is Bleeding the Marketing Sector

[This event was moderated by Rick Wolfe of PostStone]

The Canadian marketing and advertising sector is experiencing an unprecedented brain drain that will only intensify over time, and university graduates show little interest in filling the growing talent void.

That’s the consensus opinion that emerged during an expert-panel round table on recruitment -- "Talent Wars: Who Is Winning the Battle for Marketing Talent and Why?" -- hosted Oct. 4 by the Toronto Chapter of the American Marketing Association.

Timothy Snelgrove, one of four seasoned recruiters who made up the panel, said much of the blame for the high rate of defections from the traditional ad business is attributable to the burgeoning high-tech industry. Mr. Snelgrove, a partner at Toronto’s Snelgrove & Associates, which specializes in recruiting executives for dot-com startups, noted that "80 per cent of high-tech executives come from outside high tech."

He said the sector’s ability to buy the best talent available has cut a wide swath through old-economy marketing departments.

The high salaries offered by tech-oriented companies are obviously a major inducement for people to change jobs, but it’s more than that. High-tech firms have also been at the forefront of refashioning job descriptions and work environments to meet the expectations of the less-traditional, more-self-interested Gen-X set.

Panelist Stefan Danis, president and chief executive of Toronto-based Mandrake Management Consultants, said old-economy marketers are just now waking up to how much import young people put on such things as corporate culture, mentoring, training programs and generally feeling appreciated by their office superiors.

The latest rage in the United States is sabbaticals, Mr. Danis said. "That is the number one request now by employees. After five years, they want to take a year off."

Mr. Danis added that the Canadian ad industry’s struggle to attract talent is part of a worldwide phenomenon in the field, brought on by a boom economy coupled with a limited supply of workers. With economic expansion expected to continue and the talent supply moving in the opposite direction, the imbalance is destined to get worse, he said.

Panelist Sylvia MacArthur, president of Toronto’s Madison MacArthur Inc., said it is astounding how undesirable advertising careers have suddenly become in the eyes of graduating business students. To illustrate, she told the story of an unnamed, tier-one packaged goods company that held a recruiting drive at a major university last spring and made 25 employment offers.

"Only four accepted. Generally, the complaint among students has been that marketing companies hadn’t been recruiting enough. Now they don’t seem to require it."

If clients have lost their lustre as employers in the view of university recruits, agencies appear in danger of becoming invisible. The root of the problem is salaries.

According to a recent Mandrake study, agencies, which are notorious for underpaying juniors, offer an average starting salary of just $28,000. Clients, meanwhile, offer a more respectable $47,000. But both pale next to the $85,000 stipend for first-year workers offered by the large management consultancies.

After the event, Mr. Danis said the migration of senior-level talent to other fields and the shortage of qualified young people are creating enormous headaches for company managers. But he said he worries that the problems down the road will be even bigger.

"The business is losing its wisdom. By historical standards, already, today’s senior executives are younger and less experienced."

Despite this, they’re making more than ever. According to Mr. Danis, the president of a top-30 agency can expect to rake in $275,000 to $400,000 annually, plus a car and a bonus, while the president of a leading consumer goods company can command from $280,000 to $350,000 a year, plus car, bonus and, more importantly, stock options.

And they could soon be in a position to make even more, should a panel prediction come true. Apparently, the balance of power in the workplace has tipped so far in the direction of employees that the market is ripe for employee free agency. Such a market would likely be limited to executives who are the superstars in their specialties.

Under this system, the executive would sign with a personal agent, who would manage the executive’s career and negotiate his or her employment packages. For a fee, of course.