Features
Talent wars: the perfect storm leading to pay rises and poaching
Mumbrella's Calum Jaspan speaks to industry experts about the ongoing talent shortage, and how its knock-on effects are causing pay spikes and accusations of poaching.
In first half 2021, the industry and economy in Australia has bounced back successfully, yet a notable talent shortage still remains, manifesting itself into what some has been called a “talent war”.
As a publication covering the media and marketing industry, we at Mumbrella are acutely aware of the scale of movement in recent months.
When the pandemic took hold of Australia last year, there were job cuts and panic, Ben Shepherd writing for Mumbrella that the eye of a storm was so severe “it frankly scared the shit out of us”. This storm subsided this year, with the ad industry one of the first to bounce back, and in doing so, quite significantly.
Belinda Lodge, CEO and founder of headhunting firm iPopulate told Mumbrella that there are three central causes of the talent crisis the industry finds itself in.
Closed borders, changed labour market testing laws, and an already shallow talent pool, Lodge said is “condensing into what we’re now seeing, which is a war on talent”.
Belinda Lodge, founder and CEO of iPopulate
“Probably 15 to 20% of our talent is ordinarily imported, mostly out of the UK, the US and Europe, and now we’ve got close borders so we haven’t got access to that talent.”
Labour market testing laws were changed by the Federal Government, coming into force in September, implemented to prioritise Australian workers job security over international workers.
This has meant a premium is being placed on local staffers, who are much more freely able to move around the industry, resulting in accusations of ‘poaching’ having been freely thrown about.
“Historically, if somebody was on a 482 visa and was working at X agency, I could easily go and approach them and move them on that visa into another agency, for example. You can’t do that now without immigration lawyers, labour market testing, and now there’s a backlog of getting these things processed. As a result, it becomes extremely challenging to move existing talent who are on these certain kinds of visas across to other agencies.”
The overall talent shortage has been well documented to this point, and with aggressive growth seen in the first two quarters of 2021, all agencies trying “to play within the same pool” is forcing a sense of urgency, edging towards panic, according to Lodge.
Margie Reid, CEO of independent agency, Thinkerbell said the current scale of the industry merry-go-round is unprecedented, and suggested that little action elsewhere may be the cause of eagerness to change things up.
Thinkerbell CEO, Margie Reid
“Like many in the industry, we have encountered staff movements both in and out, like nothing we’ve experienced before. I believe this is an industry wide phenomenon that is caused by a) unrest (what’s life about after suffering lockdowns and our COVID world), but also b) people setting themselves unrealistic expectations in difficult times.”
A former adland CEO, who wished to not be named told Mumbrella that the initial boom seen this year has tapered-off, predicting a few nervous months ahead.
“Most businesses would say they had a record May-June. July has been a bit of a set back, with the blow of the Delta variant, the nation’s optimism squashed and finding ourselves in deeper shit than ever. This is tough. We are heading back into a reset of marketing plans for more on and off lockdowns, before getting back to January’s normalcy – we are in for a tough quarter, but not as bad as Q4 2020.”
The first half of the year, and what was seen as a stable COVID recovery resulted in an influx of heavyweight talent returning to Australia, as reported by Mumbrella in June.
This strong recovery in the first two quarters of 2021 provided plenty of industry optimism, yet with a talent shortage remaining at certain pay grades, it has resulted in a spike in salaries according to some.
The former CEO quoted seeing instances of salaries rising from $60,000 to $95,000 in one go, and another of $105,000 to $140,000, “none of them worth more than they are getting paid now”. They estimated the past 18 months as seeing a 30% minimum inflation on staffing costs.
Lodge said that, as a headhunter, there is a current lack of talent in the $75,000-$150,000 salary range, in mid-weight skilled roles, and this is resulting in agencies overpaying for those potentially under-qualified, in order to prize them away and get them through the door.
“What is happening is people are over indexing on functional talent, just to be able to get them into their agency and get the retainer met. Once you’re inside the building and you’re sitting at a certain salary level, people forget the conversation that they had with you leading up to that, and the desperation that drove those numbers, and they expect you to operate at the level of your salary.”
While Lodge affirms that the agencies that have great talent attraction and retention strategies will be fine, she says that using money as an attraction strategy may prove difficult to sustain.
“I think where the challenge is going to be, is just where you’re relying on purely financial metrics to get talent, because you don’t have a client portfolio to offer them the diversity of work, or the creative output. And so then all of a sudden you strip all that back and then it becomes a financial conversation.”
Reid said that for her agency, the former is the case to ensure steady staffing, and for financial structures to not get blown out of proportion.
“What we’ve done at Thinkerbell is focus on building our own brand to make sure we’re as attractive as we can be for our current and potential staff. We’ve done this by having a clear proposition and delivering on this for our clients and people.”
“As an independent agency we have our own ways of recognising our people with a variety of financial incentives from short and long term incentives, bonus and profit share each year. In addition every person is given an extra five days of “Mind Expansion” leave on top of their annual leave to go and expand their mind outside of what they normally do.”
For now, with the borders shut, there remains no easy way to get this 15-20% of the industry back in to diffuse some of the pressure on agencies. As for the reasons two and three, Lodge says policy change is needed to fix the visa hurdles, and for the industry to continue to work on finding ways to attract the right new talent.
Calum Jaspan was news editor at Mumbrella, based in Melbourne. He was also the producer and host of the Mumbrellacast. He left Mumbrella in May 2023.
Linkedin