The bulk of job cuts in the advertising industry in Australia are being felt more by local outposts of global players, according to industry insiders.
With the recent surge in redundancies across adland, it’s the holding companies which have a greater focus on margins, via an overseas head office, and therefore less permission to wait it out.
Most of the global advertising groups, caught by a downturn in ad spend by the technology sector, are in the middle of restructures, cutting overheads, seeking efficiencies.
The biggest, WPP, is seeking annualised net cost savings of £125 million (AUD240 million) in 2025, with 40% to 50% of that expected this year.
Other big players, including M&C Saatchi, have also been reorganising, shedding roles.
The insiders say the knock on effect, with pressure on remaining talent, eventually equates to struggling with pitches and / or losing clients, therefore redundancies.
The end of 2023 saw a rush of redundancies across adland as consumer sentiment ended its second worst year on record and analysts forecast a slow start to the new year.
A slow first quarter in 2024, as a result of economic issues and the changing nature of advertising, have seen many local creative arms of global holding groups slim down.
However, recruiters see a pickup in the job market, with some roles, including account management, in demand.
DMCG Global executive partner Simon Hadfield told AdNews the job market is by no means hot, however it is certainly slightly better than it was in the second half of last year.
“The junior to mid roles are still tougher to fill as I believe the kids are less and less enamoured with our industry, which is a real shame,” he says.
Salaries seem to have plateaued for quite a long time. A group account director salary 10 years ago is still similar to what it is today, Hadfield says.
“I believe that is due to a variety of factors but also a reflection on the broader industry and value placed on what we offer. This is concerning with the move to inhouse, more digital / immediate results and project based remuneration.
“Talent is what makes your agency stand out from your competition, finding the right people should be an absolute priority. I know a great headhunter.”
TKR Group managing director Kirsty Tavae says most salaries have gone back to market rate versus the wage inflation the industry saw with the candidate shortage 12-18 months ago and talent is getting 20% more than the market rate.
Tavae’s seeing the majority of redundancies across account services (creative and media).
"The market has been picking up over the past 4-6 weeks. I have a lot briefed in here at TKR for account services, strategy, creative teams and digital," she says.
More recently, there’s also been a huge reach out from media talent where they have been made redundant across the bigger network groups.
“In times of uncertainty and economic instability, it is crucial for network groups and independent businesses to adapt to the changing landscape of advertising and client demands,” Tavae says.
“While redundancies may seem inevitable as advertising spends fluctuate, it is also an opportunity for companies to reassess their strategies and focus on innovation and creativity especially when hiring new talent for the new normal we are experiencing now.”
The current economic climate has also had an impact on client-side marketing teams and budgets.
This has had a flow on effect to agencies, where tighter budgets have led to some redundancies, according to Iknowho lead talent partner Sheryn Small and senior talent partner Riza Kari.
“Network agencies seem to have been hit the hardest, but we have seen independents makes cuts too," they say.
“That being said, there is still a shortage of account management talent, so cuts may have had a greater impact on other agency departments.”
The job market has definitely dipped, Small and Karis say, particularly compared with the first two post-COVID years.
“However it has recently improved and with so many pitch results in the balance, the next few months could see some movement.
“When it comes to talent, in account service we still have a talent shortage market in the junior to mid-levels with a demand for ‘doers’ and affordable ones. Given budget restrictions, there is also less appetite for candidates requiring sponsorship.”
At the junior to mid levels salaries are up, the pair say.
Between the high cost of living, and the lack of competition, candidates are pushing for higher salaries and Iknowho has seen bands shift by 5-10%.
“Junior candidates in particular are asking for higher salaries, but given what competitive sectors are offering this is not surprising. Interestingly at the senior end there has been less of a shift.”
The recruitment agency is also seeing more junior-mid level candidates on working holiday visas, ready to get started in a role ASAP.
Karis would encourage agencies to be open to shorter term contracts to access this talent pool.
“It’s a great way to gain support during challenging economic times and tighter markets,” she says.
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