The credit crunch is having an effect on most industries - digital agencies in London are no exception. The past five years have been fantastic for our industry, but during that time many agencies experienced high turnover and, as digital business grew, so too did the skills gap. Salaries for digital talent were on the rise as those in senior levels who stuck it out past the dot-com bust were in high demand. Here are a few hunches about how the crunch will impact digital marketing agencies in London:
Less job hopping: turnover in the past few years has been exceptionally high at many London agencies. There were more jobs than people and recruiters were making a good living by moving people around. One year in a role was considered adequate before jumping ship. Often freelancers would be at an agency longer than "permanent" staff. Unfortunately, this was a disservice to clients who lost out on the knowledge each individual accumulated, and had to suffer through the learning curves of many new people.
A slowdown of salary creep: there's been a definite shift to a buyer's market, so it will be harder for people to move around and make a big salary leap.
A new skills gap: After the dot com bust, a lot of people at the junior or mid-manager level pursued other career options. So during the recent boom, there was a gap between junior talent with just a few years' experience and senior talent with over 10 years' experience. Many of those junior people were able to move up in their organizations quickly, but I think many agencies struggled to get their staffing levels correct. For instance, I know of at least two agencies who didn't employ anyone below AD level. One was by design, the other by default. Either way, it's not great when clients are paying Account Director rates for Account Executive-level work. It's not too much fun for the AD, either! The difference this time around, is that the entire market is struggling, not just online industries. However, I think London agencies will be reticent to bring on permanent staff. They'll be more likely to use risk-free freelance talent who they can let go easily if their clients cut back on marketing spend. I see agencies hiring a freelance Account Manager before hiring a more junior permanent Account Executive. This means that in a few years' time, there will be another skills gap for experienced AMs.
What are your crunch hunches for agencies in your city?
Sidenote on UK Account Management titles:
I know titles differ in the UK and the US, so here's a quick hierarchy of agency titles for American readers:
Client Services Director
Group Account Director
Account Management Basics