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Hello and welcome to today’s webinar on how small agencies can improve employee retention. I’m your host, Chip Griffin, the founder of SAGA the Small Agency Growth Alliance. And I’m excited to be talking about this topic today because I know it is one that many of you are struggling with. It’s one of those things where we often think as a small agency, we have bigger challenges with retention because maybe we don’t have the giant structure that allows people to continue moving up and climbing the ladder of career progression as they might like to.
And so we wonder how can we hold on to people, particularly because it’s so difficult to recruit people in the current environment. Once we’ve got a good, talented person on board, we want to make sure that we keep them for as long as we can. So, that’s what we’ll be talking about today, but before we dive into the actual topic, I want to go through a few housekeeping items, as I always do at the start of these webinars.
First of all, if you are a SAGA Pro member, you will have access to the full replay of this webinar, and it will be posted in the next day or two to the SAGA Pro Community. If you have a question during today’s webinar, please use the Q&A function. It should be probably at the bottom of your screen and you can use that to ask questions at any point during the webinar, but I will take all of the live questions at the end once I’ve finished the formal presentation.
The, if you are watching this on a recording, you can email your question to me at chip at small agency growth dot com. If you’re watching this live and you just have a question that you’d like to ask, but perhaps don’t want to share with the public, feel free to email that to me as well, and I’ll get back to you as quickly as I can.
You’re also welcome to join the SAGA Slack community. We have a great discussion going on in there, and you can ask your questions there and get feedback. from me, but from other members, other owners and agency employees. If you’re talking about this webinar on social media, I’d encourage you to use the hashtag agency leadership.
So it’s easy to find. And finally, any of the resources that I may mention today or lots of other ones, frankly, for that matter, you can find at smallagencygrowth.com. You can use the search engine and uncover all sorts of things that will help you find the answers to your questions or ideas for things that you can implement in your own agency.
So with that, let’s go ahead and dive into the agenda for the conversation today. And we’re going to focus on five specific things that I think you can focus on in order to improve the retention rates of your employees at your agency. And so first and foremost, Recruiting. We’ll talk about how it really starts from that first conversation that you’re having with a prospective new hire.
That’s when the retention process begins. Not a year into their tenure, as some people think. It’s really right away and as soon as you are talking to them. Then we’ll talk about the role that pricing plays in retention. And this may not be the kind of thing that you were expecting, but I will assure you that I will be able to draw a direct line between improved retention and improved pricing.
Next up, we’ll talk about communication because as communicators, we are often pretty poor at communications internally, frankly. And so those are the kinds of things that we need to spend a little bit more time on and really work to improve. So I’ll give you some tips in that area. I’ll talk about organizational charts and the role that they play in holding on to employees.
And finally, we’ll talk about the thing that you probably were thinking would be my number one item, which is compensation and career progression, because those are the things that I think most people think about first when they’re thinking about retention. But hopefully I’ll be able to explain why the four things we talk about first will very much lead into a more a more productive way of handling both compensation and career progression.
So, let’s talk about recruiting. And as I said, it really is the very first step in the retention process. It’s all about setting the expectations properly during that initial conversation that you’re having. And a lot of times we go into the recruiting process either maybe not as well organized as we would like to be because we’re just rushing.
We know we need help. And so we’re, we’re kind of diving in and we’re thinking we’ll just find whatever talent we can. Sometimes we’re going into it and because we are thinking of recruiting as a selling process, which we should, right, recruiting is not just about screening potential employees to make sure that they’re good fits for you, it’s about selling them on the benefits of your agency.
Sometimes we go a little bit too far though, and we need to make sure that we’re setting realistic expectations for those new hires. Because one of the biggest things that will cause people to be frustrated as employees is if they were told one thing during the recruiting process, and then they ended up with a very different experience once they became a member of your team. So set clear expectations about what your, what your work habits are like, what your work environment is like, the number of hours, the kind of work. If they’ve got to do a lot of grunt work, don’t sugarcoat it. Let them know that that’s going to be there. But also make sure that you’re structuring your roles so that they’re not just all grunt work.
Because almost nobody wants to sign up for that. So if you find in this recruiting process that you have to, shade things a little bit or make them sound better than they are. That may be an indication that you actually want to think about how you’re doing things internally and how you’re spreading the workload around and how you’re managing some of the tasks so that you can make the positions more appealing on the front end.
Because if someone comes in and they’re knowing what to expect, they’re much more likely to have a good experience going forward and much more likely to say, yeah, I’m going to stick with this.
And then you also need to think about how you’re going to recruit the message. Sorry. Reinforce the messaging during the recruiting process during the time that they are an employee.
So, whatever you’re saying, the benefits that you’re talking about. You know, we, we love to talk about how we’re a family, we’re a team, we all get to, you know, get together and do things. Make sure that whatever you say in the recruiting process, is actually backed up by the experience that they’re having as an employee and also that you are reinforcing that messaging.
So if you say you’re a, a close knit team during the recruiting process, make sure that you’re still talking about that over time. And make sure that you’re walking the walk and not just talking the talk. Because that’s one of those things where employees will spot it in a heartbeat if you are just using your words during the recruiting process to get employees on, to get clients on.
And if it’s not the true experience that you have as an employee or a client, it is so much more difficult once you are actually in the throes of all of the work that, that has to take place. So.
Now I’m going to talk about the most surprising element, probably, of my presentation to you. At least I’m guessing based on the conversations I’ve had with owners before, and that is the role that pricing plays in retention.
And the reason why pricing is so closely linked to retention is because the agency community as a whole for decades has had a bad reputation as a place to work because they are often viewed as places where employees have to always work overtime. They’re just getting, you know, ground into dust in order to perform for clients.
The reason why this often happens is because agencies are balancing their books on the backs of their employees. And I would strongly encourage that you not be part of this culture that has existed, again, for decades. You want to make sure that you are pricing so that you can resource appropriately. If you are finding yourself in a position where you frequently have to ask employees to work overtime, if you’re frequently pressuring employees to work well into the night, if you’re frequently asking employees to put in time on weekends or those kinds of things, That’s not part of the hustle culture that I like to hear a lot about from agency owners.
Rather, it’s usually an indication that you have not priced high enough in order to staff the projects effectively so that you can perform the work that routinely occurs in a regular 40 hour week from all of your team members. Now, that doesn’t mean that there won’t be special projects. I’m not telling you that there’s never going to be an occasion where you’re going to have an employee have to work overtime or work into the night or perhaps even pick up some weekend work.
And certainly if you are an agency that is involved in something like crisis communications or those kinds of things, there will be times where it is absolutely necessary and in some cases more often than others because of the nature of the work. Now part of this comes from setting that expectation during the recruiting process, but the biggest part of it comes from getting your pricing correctly.
And this is one of the many reasons why I preach the importance of time tracking. And I, I know we all hate timesheets. We don’t want to do them. We don’t want to fill them out. We don’t want to spend time on it. It’s frustrating. I don’t like timesheets either. But, timesheets are an incredibly effective tool to help you understand the profitability of individual projects.
And I have a project guide on the SAGA website that will help you to do those budgets very simply. And if you do that… If you’re collecting the time data and you’re plugging it into a spreadsheet so that you understand the profitability of your individual projects and clients, it will allow you to figure out where you have gone wrong, where you may need to pull back on the work that you’re doing, or you may need to increase your prices in order to put it in a place where you as the owner are profiting fairly on your work, but you’re still able to hire the necessary resources to get the job done.
And this is not something that you should try to do all on your own. Even if you only have one other employee, if you’re just an agency of two people, work with the other person in your agency. Work with all of the team members that you have at your disposal who may be working on a particular client project. Work with them during that process of setting the price for the client because your price should be based on Starting first and foremost with understanding what are your costs to deliver on the promises that you’re making.
So that means working with your team to understand how much time is it going to take, how does it fit in with their other projects, whether it’s an ongoing thing or things that they have immediately in the pipeline for short term projects. Because if you have your team members involved in helping to provide the workload estimates, in helping you to understand how much time it’s going to take and where it might fit in the schedule, Because you can’t just assume that you’re going to be able to devote someone full time to that new client even though it sounds great.
You have to remember they’re servicing other clients in all likelihood already. And you have to understand if you bring them in and you promise certain deadlines to a new client, what is that going to do to your existing work? Will it fit? The best way to do that is by working with your team members. Not winging it on your own, not setting pricing because this is what an old agency used to charge, or this is what we’ve always charged, or any of those kinds of things.
It’s actually understanding, for the project that you have scoped in front of you, how much work is it going to take and how will it fit in with all of those other things. If you’re involving your team in that process, It does two major things. The first is it gives you a more accurate representation of what it’s going to take in order to produce for that client.
So it’s going to help you just to factor that in. The second thing it’s going to do is it’s going to help to make sure that your team has bought in to the estimates that you’re going with. If you go to someone after the fact and you say, I just sold this to a client, I told them you should do this in three hours of work time, so I need you to hold the three hours of work.
And they never had a chance to offer their input and say, well that, you know, producing that press release, distributing it, following up, that’s going to take more than three hours. If you are in the process of. If you’re in the habit of setting all of those things on your own and then top down simply telling people what their time budgets are, they’re much more likely to resent it and that is going to negatively reflect on retention.
On the other hand, if you’re involving them and you’re getting that more accurate information and it’s their estimates, A, it’s a lot harder for them to push back and say, I can’t believe you promised this because they were part of telling you how much time it would take and how it would fit in with their other responsibilities, their other deadlines, but it also means that they are more likely to be supportive of it, and so therefore it will reflect more positively in their experience as an employee and therefore improve their likelihood of sticking around for a longer period of time.
So really focus on getting your pricing right and always checking it. So the first time you do a certain project or certain kind of project, you’re going to have to make some guesses.
But the more of them that you do, the more accurate you should be becoming because you’re taking the actual time data that you’re collecting on that project and comparing it to what your estimate was at the beginning. If you get really good at pricing, you will get really good at retention because it means that you can staff appropriately to get the job done and not have to overwork your employees in order to make the profit margins work.
So, this next one, again, may be a little bit of a surprise to folks, but I think most communicators understand that, while we’re good at communicating for clients, whether that’s doing marketing communications, PR, advertising, whatever, it’s a very different thing with how we are often communicating internally.
And so we need to really… Double down on this and put in some extra effort to make sure that we are communicating effectively with our team because that is a big driver of retention and anyone who has listened to me for more than about, you know, five or 10 minutes has probably heard me go on and on about the importance of weekly one on ones with all managers and their direct reports.
And so I will start here. Communication starts with those one on one interactions between every manager, whether that’s you or someone who reports to you and their own direct reports. And it’s one of the reasons why when we talk about org charts, I’ll talk about the importance of my one hand management rule that you need to have not more than five direct reports because that means that you have the ability to communicate effectively with all of them and set up your weekly one on ones without it becoming an undue burden on your time as a manager.
Those weekly one on ones are your opportunity to make sure that you are communicating effectively. That you’re helping your team members to break down the roadblocks they have. To give them the feedback that they need. To give them a forum to speak whatever concerns they might have. It’s also your opportunity to make sure that they are really feeling included.
And we’ll talk a little bit in a moment here about the challenges of hybrid and virtual environments that so many of you are using now. And so those weekly one on ones may be the most direct contact that they have with anyone else in the agency on a regular basis. If you are virtual and you’re not just having water cooler conversations, you’re probably not having a lot of one on one conversations with other people that’s not specifically targeted at an individual task.
Talking about an upcoming project and what you need to do. Talking with a client, something like that. So your one on one interactions between the employee and the manager shape a lot of how that individual is feeling about working at your agency. So you have to be having them every week, without fail.
You can reschedule them if necessary, but don’t cancel them. Absolutely essential. But it’s not just about the one on one communication that we need to focus on when we’re thinking about retention. We need to think about all of the team communication and interaction that we do. Some of this is formal. It may be a weekly staff meeting or a quarterly team meeting where we talk about bigger picture planning type things.
But it may be more informal things. If you’re all, even if you’re virtual, if you’re all in the same area, bringing people together for dinners or lunches, bringing people together for community service activities or other chances to get together and get to know each other. That increases the bond that an individual has with your agency.
And when you’re thinking about places that you want to work, you don’t necessarily want it to be a place where all of your friends are. Some people are looking for that. Others, they just want to be a good employee. But they still want to get to know their co workers in most cases. And I haven’t known a whole lot of agency employees that want to just sort of sit off in a corner, do their own thing, and never have any other interaction or never see the big picture.
So make sure that you are communicating those things. Make sure that you’re communicating where you see the agency going. Make sure that the employees understand how they fit into it, how they can contribute to it. Because communication is not a one way thing. It’s not just me blasting out as the owner to them, telling them what they need to do, telling them what we’re going to do, and all of that.
It is soliciting their input. And just as I want to encourage you to do that when it comes to pricing and workload estimates and all of that, make sure that you’re doing that for all of the things that you’re doing as an agency. Get their ideas on perhaps how you might refine your focus, who you might target as potential new clients, how you might market the agency.
You may be surprised at how many useful perspectives you get from your team, and the more that they are included in those things, the more actively engaged they are with the business, the more likely they are to develop a sense of loyalty to the business that is a healthy thing and will help them want to stick around.
Now we need to remember that just because an employee leaves that doesn’t mean that they are disloyal. That’s, that’s one of the things I hate hearing most. When someone says, oh yeah, so and so left. I can’t believe they’re so disloyal if they would leave and go to a competitor or go to a larger agency or whatever.
People make career decisions for all sorts of reasons. It is not necessarily a direct reflection on you as an agency owner. But the more that you’re communicating with your employees, the more that they’re having these weekly one on ones, the more that you can understand what is motivating them. What concerns might they have?
How can you address them? And it’s, it may be a personal concern, it may be, maybe, if you have an office, it’s too long a commute. Well, could you look at maybe allowing them to be more hybrid or allowing your whole agency to be more hybrid since that’s becoming so common? Is it that they’re not having enough interaction with you as an owner and maybe only talking with someone else?
All of those things can go into the mix. And the better your communication is and the more you treat it as a two way street, the more likely you are to identify those little changes, just those little tweaks that will make a difference in not just the retention of your employees, but the performance of them while they are still working for you.
And this is one of those occasions where you can leverage that aura of ownership that you have. And I, it is one of those things where it’s hard to believe, but, but even in an agency of just a couple of people. The owner does sit a little bit up on a pedestal. And I was talking with an agency owner about this just last week.
And in our conversation we were talking about how they didn’t really want to feel like they were up on a pedestal. And I said, well you need to be careful because you don’t want to be so far up on the pedestal that people don’t want to approach you and they avert their gaze. But you want to be enough up on that pedestal that when you offer praise, when you ask for their advice, it takes on special meaning.
And so we should take advantage of that in a positive and meaningful way in order to be able to show our employees how much we value them, how much we respect them, and how much we want to hear from them. And so if we’re using our aura of Ownership for that purpose and not using it for, I’m the owner, I’m telling you to do this, and I need you to stay until this is done, that’s the wrong way to use it.
The right way is to make your employees feel included. It may take a little bit of effort, particularly if you are in a situation where you’re already maxed out on all of the time that you have available. But you would be surprised, or maybe you wouldn’t, about how just taking two minutes and going to one of your employees and saying, hey, you really knocked it out of the park on that presentation for the client, or I really appreciate you spending a little bit of extra time working beyond hours in order to get this thing done for a deadline.
All of those things have a real impact, and the more that you’re offering that recognition and inclusion as an owner, the more likely you are to improve your retention rates.
So let’s talk about a really boring thing, and that’s org charts. And org charts are kind of a funny thing in small agencies, because org charts in small agencies Quite often I look at them and they are completely flat.
I remember a couple of years ago I was working with an agency owner and we were starting our engagement. And so I asked for an org chart as I always do. And as I looked at the org chart, there were I think 13 or 14 people that reported directly to the owner. And I looked at it and I just started laughing because that is incredibly common for small agencies to have that flat organizational structure.
It may be accidental, right? It may be that you just added team members and you never really thought about adding more structure to it. It might be because perhaps you were at a larger agency and you just chafed at all of the bureaucracy and you said, I’m going to have a much simpler management structure.
We’re not going to have all of this hierarchy and bureaucracy, which sounds good. But there’s a, there’s a point where you go too far with that kind of approach. And so you need to have an organizational chart that is intelligent, well thought out, and allows you to do things like abide by my one handed management rule, right?
No more than five direct reports per employee. But it also tries to achieve five key goals. Because, and we’ll talk about those five goals in a moment. But I think that the, the important thing to understand here is it’s one of the biggest reasons why org charts. play a real role when it comes to retention is because more often than not, you quit a manager, not the agency itself.
And if you think back to your own experiences, where you were particularly frustrated as a worker in whatever employment situation you were in, it wasn’t so much about the logo, right? It was about your manager. What were you being asked to do? What opportunities were they giving to you? And the person in that organizational structure may not be at the top of the chain.
It may be your direct manager. And so you need to be putting together an organizational chart that is well structured so that managers are paired with the right team members, that they’re providing the right guidance. You need to be providing excellent guidance to all of your middle managers. Right? So it’s not just about you having weekly one on ones with your managers and, and try and provide them with good mentorship just generally.
You need to help them become better managers. In many cases in a small agency, your middle layer of management may have never managed a single employee before. Chances are you as an owner have managed employees before you had your agency. And certainly now you’ve had some experience managing employees.
Otherwise you wouldn’t be here for this webinar, right? There’s no need to retain employees if you don’t have any. So those are the kinds of things that you need to be helping them with in order to improve how they behave. Making sure that they are hosting one on ones with their own direct reports.
Making sure that they are also providing mentorship and coaching on down the chain. So let’s talk about the five key things that you want to use your organizational chart in order to facilitate. The first is availability. So this is sort of a corollary to my one handed management rule that focuses mostly on the manager’s ability to have one on ones and that sort of thing.
But it’s also because if you have too many direct reports, you’re not available to them when they need you. And that availability can be for, for those weekly one on ones. It can be to to talk to you about some client matter that they need approvals on. It can be all sorts of different things. And if you don’t have a, a structure that allows your managers to make themselves available on an as needed basis and on a regular basis for their direct reports, your organizational chart is falling down.
In addition to the, the just general availability – being there – you also have to be responsive, and that’s certainly in the form of those in person communications, but it’s also responsive in terms of email. So you want to make sure that people who you are putting in charge, as managers, they have good skills, and they understand that it’s important for them to provide those timely approvals for whatever it is that the employee might need, whether it’s, can you review this before it gets back to the client?
Can you review this expense report? Can you, whatever it is, you want to make sure that your org chart encourages responsiveness from your managers. We’ve talked a little bit about mentorship already, but I will underscore that one here as the third goal of a good organizational chart. It needs to be structured so that your managers are, are well suited to mentorship. And that doesn’t mean that they start out that way right away. You may need to spend some of your time. You may need to get them some outside training or coaching in order to help them become better mentors and coaches themselves to everybody who works for them. But if you put someone in your org chart, and you have direct reports to them, and they’re not good at mentorship, there’s some people who just, that’s not their personality, right?
They work best sitting off in the corner doing their own work. If you make the mistake of saying, well that person is, you know, they’ve been here a while, they know how things work, I’m going to make them a manager. Just because they have experience doesn’t make them a good manager. So make sure that you’re structuring your organizational chart so people who are managers actually have those skills or you can develop those skills with them.
Closely related? Personality. Ultimately, we all have people we get along with better than others. And we all have our own personalities. And so thinking about your org chart and thinking about how you’re going to mesh. And this goes back also to the first thing we talked about was the importance of thinking about retention during the recruiting stage.
If you’re going to have someone that you’re bringing on as a new hire, make sure that they’re, whoever is going to be their line manager, is involved in that hiring process and has a chance to provide their feedback. I’ve seen many instances in small agencies where the owner goes out, spends time, finds a great hire, and then comes and says, okay, you know, Sally’s gonna report to you, Jane.
And then it just turns out that Sally and Jane just, they’re like, oil and water. They don’t get along. And now where are you at? What are you gonna do then? If you had made sure that the hiring at the, the reporting manager, the line manager was involved in that hiring process? They might be able to flag from the get go that there’s an issue there, that their personalities are not aligned, that their expectations are not aligned.
So make sure that you are using your org chart effectively, not just to put the right people together, but as you’re hiring to use that org chart and say, okay, I’m going to put this person here on the org chart, so I need to make sure that this manager is involved. And maybe not just the manager, right?
If it’s a small team within your team, you probably want to have at least a brief get to know you session between that prospective hire and the other team members that they’ll be working with most closely on a day to day basis. Because that’s how you can start to uncover if they will be a good fit.
Because particularly in a small agency, we don’t have a lot of flexibility. In a large agency, if you bring someone in and their line manager doesn’t get along with them, their team member doesn’t get along with them, you can often find somewhere else in the organization to move them, maybe swap someone else in to the team that needs the help then once that has taken place.
Small agency, much less likely to happen, right? We don’t have nearly as much redundancy of skills and capabilities, and we don’t have as many people and as many seats to move around, so we need to get it right from the start. And so using your org chart to think about where people sit, where they’re going to sit is going to be really helpful.
And then finally, the, the, the biggest thing that a good manager does is provide feedback. And this is a little bit different than mentorship, right? Because mentorship is a little bit more coaching. Feedback is letting the employee know what they’re doing right and what they’re doing wrong. But it’s also feedback in the other direction.
It’s making sure that you’re putting people in the org chart who are listeners, who will spend time to understand what the feedback is from their direct reports. What is their experience like? And if you’ve got someone who is unhappy, you want to make sure that you’re encouraging them to feed that to their manager and then the manager should be talking to you as the owner to help you to understand what’s going on? What are the pain points? If you understand where your team may be struggling, why they may have a potential morale issue, or why you may have an individual who is just not feeling, they’re not feeling the love. Those are things that you can address as long as you’ve got a two way feedback loop.
That can start with the one on one, but there are other things that you want to do with that. You want to be as, as the top of the org chart in your agency, you don’t want to rely just on your middle managers to take care of everything. You still want to, even when you get up to 20 or 30 employees, you still want to, on a regular basis, be engaging either one on one or in small groups with your entire team throughout the year.
You obviously can’t do this every week. You shouldn’t try to do this every week. But, if you are able to, let’s say you’ve got 10 employees and you rotated through and you did, You know, one of them a week, or one of them every two or three weeks. That means over the course of three to six months, you’re having those regular one on one engagements.
Maybe as you get closer to 20, you have to do them as, you know, you go grab coffee with two or three employees at a time. Those are all opportunities for you to communicate more effectively, to get feedback from them, and to make sure that you’re understanding how your management team is working, how your org chart is producing for you.
And all of those things will lead to much better retention rates for your agency.
So now let’s talk about the thing that you probably expected would be the primary focus of today’s discussion and hopefully you’ve seen now why it is only one small piece of the, the five major ways that you can focus on retention.
So let’s talk about compensation and career progression. We’ll start with the premise everyone wants to make progress. If you have an employee who doesn’t want to make progress and they don’t want to see visible signs of that progress in terms of improvement to their title or career improvement to their compensation, if you have team members who are not looking for that, in all likelihood, they’re probably not a great fit for you.
You want people who want to continuously improve, to learn more, to grow to, to just do all of these different things and particularly younger employees today, more, less experienced employees. They want to make rapid progress. And so it’s not uncommon when I’m talking with agency owners to hear that they’ve hired someone and, and six months that you’re right out of school and six months later they’re already looking for a raise and a promotion.
Now part of this is because sometimes owners will try to get someone in at a lower rate, a lower salary when they first join and, and they’ll hold out the carrot of being able to take a look at those kinds of issues. Maybe, you know, six months, eight months, whatever. Any prospective hire, going back to setting expectation, any prospective hire, they hear that, they hear whatever the low end of the range is.
So if you say, you know, you can join at, at 40 and, you know, we’ll, 6 to 12 months we’ll take a look at it. If you’ve said 6 to 12 months, they hear 6, they’re coming to you in 6 months and they’re going to ask for a raise. So make sure, set the expectation right up front, but then you need to be thinking about, okay, what is my process for compensation. And so you need to think about a few things here. The first is that you do need to have some standards in your agency, even if you’ve only got a couple of employees resist the urge to say, well, you know, I don’t really care about titles. And this was a mistake I made. Frankly, I, I never really cared about titles.
I thought, you know, you can call yourself whatever you want. You want to call yourself, you know, head honcho of this or that feel free. Why not? Well, the problem is that as you grow, it becomes more challenging. So, so now you’ve got someone who, you know, has got two years of experience and they’re a vice president.
Well, what happens when you have someone much more senior that you want to bring in? You can’t make them a vice president versus someone who’s already, who’s only got two years of experience. So, but now what are you going to call him? Executive vice president? Senior vice president? You start running out of titles.
So you do want to have some sort of standardization of titles within your agency. So that it, there are clear understandings for you. that you can communicate to your team, to your managers, about what those titles mean and how people can progress. And you do have an opportunity to get a little creative here.
And I wouldn’t, I wouldn’t get too creative with some of the titles, but within the agency world there are all sorts of different titles that are pretty common. You’ve got account executive, you’ve got account manager, you’ve got account representative, you’ve got obviously things like vice president, you’ve got directors and managing directors.
But all of those things are things that you can also assign other modifiers to. So you can have a senior account manager. When I first started at a public relations agency back 30 plus years ago, my first title was junior account executive. So that meant that within that agency structure I could be a junior account executive, an account executive, a senior account executive.
And so now I’ve got a clear… a clear progression, but I really haven’t substantially changed my title. So it’s much easier to show that kind of rapid progress for younger employees who are looking for a new title every year or two. You can still hand those out and not be in a place where you’ve only got account manager, account executive, director, vice president and now four titles later they’re basically the boss.
So, use your title structure and think it through how you’re going to have those hierarchies so that you have more frequent opportunities to bump someone up and recognize their progress. These titles also are important because you can use them to establish salary bands. And salary bands are incredibly important for you so that you’re not doing all individual one off salary negotiations with everybody. And that’s when you, you tend to end up at some point taking a look at your employee roster and saying, wow, this is all out of whack. I’ve got one account manager making 40 and another making 80. That’s crazy. And not only is it not logical, it creates issues from a retention standpoint because inevitably those two employees are going to talk at some point and realize that they’re making wildly different amounts for the same title.
And then it looks like you’re playing favorites. It can also get you into trouble because, you know, maybe there’s something in the, the demographics of the, the individual employees that may suggest that there’s some kind of a bias at play. You don’t want those things to be there, and you want to make sure that you’re taking any kind of unconscious bias that you can out of yourself by having these salary bans.
And by having a clear title structure and salary bans, you can then go to an employee who says to you, Hey, you know, I’ve only been here six months, but I, you know, I want to raise, I want a title bump. And you can say, okay, well, here’s where you are now, and here’s what the next step is. And here are the expectations of that next step.
So that they understand what they need to do to get there. And then what they will need to do from a performance standpoint in that new role. Because once you bump someone in their title, they should take on at least some additional responsibility. And you don’t just hand out titles for free. It’s because they’re doing something extra for it.
And it may be in the quality of the work, the quantity of the work, perhaps, you know, how much leadership they take on, how much they’re able to do self contained versus getting approvals. All of those things play into it. And so by having a really smart org chart going to our last point and also having a clear structure that they can continue to advance in, you put yourself in a much better position from a retention standpoint because now as an employee, I’m not sitting here saying, Oh, we’re a small agency.
I’ve got nowhere to go. You’re showing them that you have a path for them to continue to move up, you know, maybe as frequently as every year. And if you’re able to do that, and you’re able to move a new hire from a junior account manager, account manager, senior account manager, and all that, and you can start moving through those, those different layers, well now they’re starting to see real progress in this.
Giving something, giving them something to post to LinkedIn and to share with family members and say, I got a promotion. And so those things will all help in the psychological game that is so much about retention. So you want to find ways to do that, to show that path to advancement. So that they have a clear expectation, they don’t feel like they’re dead ended.
Because I think that’s probably the most common complaint that I hear both from small agency employees as well as the owners, which is, there’s nowhere to go. But there’s a whole lot more places to go if you think about it. And, and Gini Dietrich and I, my co host on the Agency Leadership Podcast, we had a conversation not too long ago about getting creative with some of the titles.
So I would encourage you to go and check that episode out. And again, you can find that with the SAGA search engine. But that will help you to think, I think, about some of these things. There are also a number of, of webinars and articles where I go much more deeply into some of the compensation questions that you should be thinking about both in terms of tying it to salary bans, but also how do you manage those individual conversations with employees and how do you manage the expectations effectively.
One of the things you absolutely need to be thinking about from a retention standpoint are things like bonuses. If you’ve got a bonus structure that’s well timed and you sit there and say, Okay, you know, we’re very consistent and every December or March or whatever we do employee bonuses. That can be very helpful for retention getting up to that point.
The thing that you need to remember is that while bonuses can be really good at getting people to stick around up until the point of the bonus, it also tends to be a point where a lot of people leave as soon as they collect that bonus. In fact, I’m working with an agency owner who was talking about a new hire that they’re looking to bring in.
And that employee has a bonus that kicks in and so that employee doesn’t want to, to join the new firm until they’ve collected that bonus that they’re already entitled to if they stick through that particular date. So, you want to make sure that you’re using any kind of a bonus structure intelligently, but you also understand the pros of it in terms of keeping people through the bonus date, but also the cons of it in that you may have higher than usual number of exits after the bonus is handed out.
And then finally, I would end with this. And this, I think, ties together almost all of the things that we’ve talked about, right? This is something that comes from recruiting. It’s something that comes from the communication with your team members. It’s something that gets fed up through the org chart. It really, it’s a through line through this whole thing.
And you need to understand, as best you can, what every employee on your team wants and values. As you grow, it won’t be just you understanding this, right? You’ll have to take the word of your managers for it. But you need to understand it, and you collectively, as a leadership team, need to understand what is driving each and every employee. And each and every employee is different. Gone are the days when we could just have a one size fits all, monolithic approach to compensation and career progression. We need to understand, what makes an individual tick? Do they care more about money? Do they care more about flexibility and time off?
Do they value being able to, to you know, go off on some adventure for two weeks instead of the normal one week vacation that’s so common here in the US? What are the kinds of things that are going to motivate those team members? Maybe they’re more motivated by title than money. You need to understand that.
Maybe they’re motivated by being able to spend more time with clients or with you as the owner. Understand that. Leverage that. That communication is absolutely critical to make sure that you put together the right compensation and career path structure, but also to provide the right level of mentorship, to put them in the right place on the org chart, and all of those things.
So make sure that you are having that kind of communication that allows you to confidently know as best you can what’s going on inside your employees heads so that you can keep them for the long term for your agency.
So, I think that effectively has, has wrapped it up in a bow. So normally this is the point where I wrap it all up in a bow, but, but that final point allowed me to do that.
So at this point, that will take us to the end of the prepared presentation. We’ll move on to questions with those of you who are attending live. So if you are live, I would encourage you to use the Q& A function at the bottom of your screen to ask a question. If you have not already, I can see that a few have come in while I’ve been talking.
If you are watching this on replay, this is where the replay will end, but if you have questions, you can email them to me at chip@smallagencygrowth. com, and I’d be happy to try to answer them. And just as a reminder, you can also join the Slack community, where you can ask the question not just of me, but of other agency owners, leaders, and employees who will happily give you their feedback.
So with that, let’s I’m going to grab a sip of water here and move on to that, but thank you for attending or watching the replay, and now we’ll move on to live questions for everybody else.