How to Retain Employees When You Can’t Afford to Pay Them Higher Salaries
It’s a problem plaguing most companies these days: The ability to retain high-performing professionals. For small businesses with narrower profit margins, it can be even more difficult.
As a marketing or creative agency, you’re not immune to the stress that comes with worrying that your team members—especially those with exceptional interpersonal skills and critical subject matter experts—might jump ship for a few thousand dollars more elsewhere.
Rather than sitting back and hoping for loyalty, your agency can take steps to address the concern head-on, discover what motivates your employees beyond money, and identify effective retention strategies that won’t threaten the stability of your marketing agency.
Steps to Motivate and Retain Marketing Employees
The marketing industry is filled with creative individuals who are passionate about their work and who take personal and professional pride in how they execute projects. On one hand, that’s good news for marketing leaders, who get to oversee passion-driven employees. However, it also can be easy to rely too heavily on your team members’ devotion to creating quality work and assume all is well when emotional separation is occurring beneath the surface.
If you’re concerned about turnover and losing your top talent, here are a few ways to increase your employee retention rate:
1. Facilitate Open Communication
Some companies are reticent about addressing salaries and compensation, but there’s no reason to be in this case. Everyone is aware that small agencies and startups are challenged to offer high salaries. It’s better to acknowledge the elephant in the room and show support and understanding for the ways it impacts your employees. Then, clearly communicate your plan for supplementing salaries with other incentives and perks.
2. Work Collaboratively to Increase Revenue
Strive to create a culture that rewards results. After all, account managers are an agency’s top salespeople by role, even if not by title.
If you’re unable to increase salaries because your marketing agency is struggling to turn a high enough profit, collaborate with your team to target the problem—with the understanding that they will be remunerated if you collectively achieve success. These collaborative efforts to increase your agency’s revenue should be specific and attainable. This can help your team feel invested and that they have some control over the problem.
If your agency is profitable, you can offer profit sharing, but I would advise against offering profit sharing with the hope that employees will work harder to get the agency from unprofitable to profitable. Other issues are more likely to need resolved instead.
3. Assist with Financial Management
If your employees are disgruntled about the lack of raises, strive to better understand why they need more money (do this during one-on-one meetings, not in group settings, of course).
- Are they stressed as they see their expenses going up?
- Do they have certain goals or desires for their family like buying a house?
- Are they striving to pay off student loans faster or save for a car to replace their unreliable junker?
- Are they part of the sandwich generation and struggling to support both their family and their aging parents?
The Center for Financial Services Innovation (CFSI) released a report that found 1 in 3 employees are distracted by personal finances at work. While you can’t combat rising food, gas and housing costs, you can work with team members to help them develop better personal finance habits.
Bring in a personal finance coach or consultant to lead a workshop for your team. Also, be open-minded if there are ways you can help. For example, affordable childcare is a widespread problem. If you can offer flexible schedules or remote working opportunities, you might relieve some stress for working parents.
4. Find Out What Motivates Your Employees
Along the same vein, work to understand what motivates your employees other than a paycheck. You might discover some tweaks you can make that increase employee satisfaction without over-burdening your marketing agency.
For example, if employees are particularly passionate about a certain type of project or demographic, give them opportunities to do that type of work as much as possible. If they have ideas for optimizing processes or capturing the attention of new clients, listen and see how you can incorporate those ideas.
Not only will employees feel respected and empowered, but they’ll be more excited and motivated about the work itself, which decreases their likelihood of jumping to a different agency job just for a bit more money.
5. Expand Time Off and Optimize Schedules
Sometimes it’s as simple as less is more. If increasing employee compensation isn’t in your budget, look for ways to give your employees more time off and flexibility.
This doesn’t cost you a thing, but it is a big deal to your team. Consider “Summer Fridays,” or letting people leave early or not work at all on Fridays during the summer. If this is typically a busy season for your agency, maybe there’s another time of year where projects naturally slow down.
You could even offer four-day work weeks or 6 hour work days instead. With the rapid expansion of technology and the amount of work that can be accomplished more rapidly, more work can be accomplished in one day than what used to take weeks. Instead of grinding team members past the point of creative burnout, give them time to go and re-energize, tinker on hobbies, spend time with family and friends, and juggle other responsibilities.
Additionally, encourage them to take walks or breaks throughout the day. These choices not only support their well-being but also increase productivity and motivation in the long run.
6. Give Your Employees Greater Control of Workload
There is variance in how much time different agency employees want to spend working. Some may rather work longer days and longer hours on more accounts if that means increasing their wages. You can offer creative solutions in this arena too.
There’s more variables in this equation though, because when workload for one team member increases, it likely increases for others as well. Different agencies handle client load and creative work distribution differently, so be mindful of the variables at play within your agency.
7. Give Your Employees Tools to Track Time
Showing team members that your agency is taking a measured approach to increasing the bottom line and profit margins in order to expand compensation packages can go a long way in retaining employees that may be feeling financial pressure to apply their skillset elsewhere.
The first step is implementing a time-tracking system with feedback from your team about what is feasible. Give them different tech options for how they track time and make sure they understand this isn’t a way to micromanage them. Properly tracking time is important for informing service prices, monitoring growth opportunities, and standardizing client delivery.
8. Don’t Underestimate the Problem
Regardless of wellness perks and your amazing company culture, keep in mind that if you are below market rates for team member salaries, you are increasing the risk of employee turnover.
If your salaries are not transparent and vary across the organization even for the same, or similar roles, I’d caution against considering the situation as a good deal. You’ve traded lower salary for higher risks of having top performers leave in search for better compensation. Consider also the personality differences and know which employees tend to avoid conflict. These team members can be less likely to approach you for a raise and instead out of the blue put in their notice.
The cost to replace an established team member is greater than aligning their compensation to match market averages, which is why increasing profit margins should always be a top priority. You need margin financially and within your greater company culture to safeguard your biggest asset as an agency. Additionally, do offer other benefits, but don’t use them as an excuse to not increase wages. Most creative agencies offer the same or similar perks, so those benefits won’t necessarily help you retain your top talent.
Increasing Profit to Retain Employees
While multiple external factors can affect profit for marketing agencies for a short time, there may be a deeper issue if you’re going year after year without being able to increase employee compensation. Book a consultation to explore how to get more marketing clients and increase profit, as well as specific ways your agency can sustain employee satisfaction to avoid detrimental turnover for the time being.
Building a successful marketing agency takes grit, a focus on your value, and sometimes a *loving* kick in the pants.
Needing an ally as you achieve your long-term goals?
I’d be happy to help.