In the final installment of our series of electronic roundtable discussions focusing on the most critical challenge facing senior public relations agency professionals around the world, The Holmes Report examines the challenges of retaining first-rate professionals in a highly competitive environment.

Participants in the roundtable discussion included:
• Brandon Edwards, president and chief operating officer of California public affairs firm Davies;
• Lyle Closs, managing director, European technology public relations firm AxiCom;
• Thomas Coyne, preaident, Coyne PR, named Best Agency to Work For by the Holmes Report in 2007;
• Paul Grant, human resources director, Cohn & Wolfe;
• Glen Jackson, founder and principal of Atlanta-based Jackson Spalding;
• Karen Oseyevitz, regional director, Porter Novelli Latin America;
• David Paine, founder, California-based Paine PR;
• Steve Seeman, vice president of human resources, New York-based Makovsky + Company;
• Fiona Thorne, managing director, U.K. public relations firm Fishburn Hedges.

The discussion was moderated by Holmes Report editor and publisher Paul Holmes.  Some comments have been edited for length.

Paul Holmes: In a recent survey of global PR agency leaders, most respondents—at least in developed markets—cited retention as their second biggest concern, after recruitment. Most observers feel employee turnover in the PR industry remains too high. How does it compare to other professional services businesses? And if it is too high, why? What is the most common reason candidates who come to you give for wanting to leave their current employer?
Lyle Closs: My feeling is that the biggest problem, and the biggest benefit, for PR agencies (as opposed to in-house departments) is that the work is tough. People are under a lot of pressure and often work long hours. This creates two issues. Those who don’t like it leave for other, less pressured, careers and those who can handle it tend to be young, capable and ambitious. These people often have a good view of their capabilities and of the market and so move sooner in their career to try new things, and to get career progression and more money.
  I don’t think this is significantly different to other professional services sectors; it is almost a requirement of the services sector. Why? Because clients want the best, most effective service. They will tend to get this from the best and most capable people, and these are the ones who tend to succeed in a professional services environment. If PR was easy, agencies would be full of people cruising along and not bothering too much about how well they did their jobs. If PR agency life was easy, clients would not bother hiring agencies, they would do the work in-house.
  If we want to keep the good people, we should be giving them regular changes of environment, regular promotion and good money. And we need to do this when we recognize their talent and before they get disgruntled, not after they try to resign.
Brandon Edwards: Retention is a product of compensation, satisfaction with the work itself, cultural fit, trust in management, and a number of other factors. We recently implemented the Gallup organization’s survey methodology—the handful of key questions that companies need to score well on to keep their people—and it’s very revealing. It certainly goes well beyond money, and it makes clear that retention is more about the individual’s satisfaction with his or her work, the feeling that he or she is contributing toward something greater, and the feeling that someone in management cares about them and their advancement.
  Most of our voluntary turnover is a result of junior and mid-level staff moving into industry or discovering that they want to focus on other aspects of PR. Given our tight focus and specialized services, people leave because they want to pursue a career outside one of our niche areas or because they want to leave the intensity of crisis communications and grassroots public affairs. We occasionally lose someone to one of the big 10 or 20, but it’s never about money.
  Overall, I think turnover in our industry is unacceptably high, especially for agency-to-agency switching at the more senior levels. At junior levels, the biggest problem not so long ago was young talent leaving the industry. That seems to have stabilized. Statistically, I’m not sure our industry is any worse than the legal or management consulting industries in terms of turnover.
Glen Jackson: Client retention and people retention within the agency world are inextricably linked.  Firms that experience a lot of people turnover experience similar issues with clients, which does not bode well for our field as a whole. The way to improve retention—and therefore client service—is to hire people who are a strong cultural fit and who clearly understand the goals, values and vision of the firm before joining the team. This requires the firm to have an effective hiring process that evaluates both competency and chemistry. At our firm, we focus a great deal on new employee orientation, comprehensive, carefully timed reviews and a mentor program that nurtures and emphasizes leadership skills for people at all career levels. The overall focus:  view the firm not as a job but as a career.
  People rarely leave because of money. They leave because they don’t feel challenged, they aren’t learning and growing, they are not working on business that interests them, and the leadership model within the firm is stagnant or too bureaucratic. Young professionals want to be part of a team and experience the full dynamic of a firm. If they are pigeon holed or not given the chance to move up and know where they stand, turnover increases.  I am not sure how we stand with other industries but would be interested to see any statistical data that might be out there.
Thomas Coyne: I was looking at my numbers this past year and the funny thing is that I lost more people to the teaching profession than I did from other PR jobs.  Does anyone else see this that PR people for some reason also want to be teachers?
  As for the question, the key to high retention is seeing the world through their eyes.  Each title of staff has different needs to be met. Some are ambitious, some crave work-life balance, some need attention and some like to be left alone. Active management is challenging but the most effective way to have strong retention. I know that this sounds simple; but I have found that when senior management puts themselves in the shoes of everyone in the agency decisions get made that put people before profits.
David Paine: I continue to believe that the responsibility for turnover lies squarely and entirely with service business employers, which make working in PR and other service businesses far more difficult than it has to be. Too much emphasis today remains on compensation-based (extrinsic) motivation and incentives, along with competitive and political environments, that together undermine natural tendencies of loyalty that exist within many people. 
 Additionally, many service businesses are simply not run well—people have to constantly overcome poorly designed structures, systems and methods that add to the challenges that already exist in the client service field. More work simply must be done to improve and professionalize operating methods, and create work environments that are more bottom-up, collaborative and positive, which provide the intrinsic reasons that encourage people to stay. If turnover were systemic to all agencies and service businesses, all firms would experience similar turnover levels, but that is not the case. The problem is entirely a function of the way differing work environments are structured, and we need to all work harder to develop industry wide best practices.
BE: It’s hard to argue with any of that. Agencies are generally poorly run, which is a function of all of the factors David mentioned. Yet even agencies that deliver incredible results for clients and are very profitable are failures when it comes to culture. They do not foster accountability and responsibility among their staffs, and they do not build a greater sense of purpose beyond the next media hit or the next promotion from assistant account executive to account executive. PainePR has a long-held reputation as a thought leader in this area, and firms like CRT/tanaka and Capstrat have strong cultures and well-defined value systems.
  I think we have to be careful discounting compensation-based incentive programs—they are a necessary adjunct to the right culture and environment. Without them, you see eroded profitability even in a collegial learning environment.
  I think we also have to be careful with a total focus on “bottom-up, collaborative and positive” culture.  Leadership, motivation, and management very often have a top-down component. Bottom-up sounds good, and there is definitely a component of bottom-up feedback and input that’s necessary. But junior and mid-level people need to be led and managed at some level, and the trick is combining the top-down and bottom-up in the right blend for the environment and the type of work the firm is doing. If it were easy, everyone would be doing it. But the firms who do it will distinguish themselves with consistent growth, high retention rates, value to clients, and solid profitability.
DP: Agreed. Bottom-up means openness and responsiveness to staff feedback regardless of level. But it remains the job of leadership to design and run a company system that delivers a great workplace and higher than normal retention.
Karen Ovseyevitz: In our industry we need to be very clear on the career path that we offer. People leave because they need to feel challenged and they want to grow in the organizational chart very fast. This is very hard in small agencies where the structure is pretty flat. When people come to work for us from other agencies they tell us that they don’t see growth opportunities in their current jobs. Young people now are very ambitious and they want to move fast. Long term for them is three years, short term is three months. People need to know what to expect in their jobs in their own short and long term definitions.
  I agree with Glen on hiring people with a great cultural fit. We look a lot into attitude of the people more than aptitude. We can help them develop skills when they are here if they have the right attitude.
Steve Seeman: I think the public relations industry probably sees a higher turnover rate than other professional services businesses. The primary reason is that most agencies do not provide enough reasons for employees to stay. Junior professionals pursue new opportunities in order to get significant salary increases and loftier titles. For the most part, no matter how well they are rewarded and challenged, there will always be other firms willing to pay more and give them a promotion. But mid and senior-level employees are seeking much more than that.
  They want increased responsibilities, genuine opportunities to learn from senior “gurus,” and more sophisticated work from bigger clients. An agency can earn an employee’s loyalty by taking an active interest in growing his or her career, continuously providing new and exciting challenges, and demonstrating real opportunities to gain more responsibility on a broader scale, while also respecting the growing demands of the employee’s obligations outside of work.
  Of course, regular compensation growth and eventual equity-building opportunity is still vital in retaining senior executives, but career growth, expertise-building and respecting the work-life balance are even more important.
KO: When people come from other agencies we usually hear from them that in their former agency they did not feel as part of a team; they felt they were a one man team covering all roles in the account and they come looking for a team from which they can learn from and in which they can rely.

PH: We’ve all seen research showing that people are not motivated by money alone. But when we conduct our Best Agencies to Work For research each year, employees give their firms consistently low marks on any question related to financial compensation. And we all lived through the dot-com boom, when individuals were being offered—and for the most part accepting—absurd pay raises to jump from agency to agency. So it seems to me that money is an important issue, and that PR people don’t feel they earn as much as it as their colleagues in management consulting or even advertising. How big an issue is that? How do we address it? And when it comes to compensation, are there other issues beyond how much you’re paid: transparency and fairness, for example?
DP: Money is always a factor, but fairness does create problems as well. In many firms people are paid based on what they negotiate and in many cases professionals with similar skills will as a result be compensated differently.  While agencies try to keep salaries secret, people share with others what they are paid and these kinds of subjective, negotiated and at times irrational disparities in pay between people only fuels the sense of unfairness and the importance of and competition for money, adding to turnover woes. 
BE: That’s a great point. One solution is obviously to make salaries an open book, and another solution is to create salary “bands” for every level in the company. That ensures that every employee at the same level is within range of all others. We’ve taken this approach and I think it’s helped a great deal—we still get pushed for promotions and raises, but it’s based on the individual’s performance instead of their performance relative to others. The Chandler Chicco solution of no offices and no titles probably helps with this as well. You have to be very mindful of the dynamic with younger staff—it’s not about how they’re doing as individuals, it’s about how they’re doing compared to their peer group.
KO: To deal with the issue of fairness we created salary levels too, every level has four quadrants depending on the performance of the individual in each level. We found out that people did not realize there was a structure and thus perceived an unfairness in compensations. We had our financial advisor giving a presentation to all staff about the salary level approach, how does it work, when do people move to other levels and other key concerns. We did not share the actual salaries for the level, just showed the model. It worked. Now people get it much better.

PH: One of the other issues that interests me is how you balance the need to provide people with new opportunities with the demands of clients for stability on their teams. On the one hand, clients grow to trust their account teams and don’t like change; on the other, people need to develop new skills—or sometimes just be taken out of their comfort zones. What’s the answer?
DP: One answer is to start by assigning people based on their passions—so you don’t have people working on consumer electronics when they are really passionate about women’s products. Another is to provide diversity, so that they do get to work on more than one thing, and to occasionally, time permitting, engage in workplace “cross teaming,” helping on other accounts on a project basis—thank God for no profit centers!. Lastly, we provide the automatic right to transfer to new teams after two years if they want to move on, and of course to apply for new positions that open up anywhere in the firm. All such opportunities and new jobs are posted openly throughout the company. We explain to clients that these transfer-from-within policies ensure they get people who are truly passionate about their businesses, not indentured servants.
BE: For large firms and smalller generalists, this should not be difficult to accommodate, nor should it be a difficult choice. It’s far less expensive and less disruptive to change someone’s role and responsibilities—and provide any necessary training—than it is to hire a replacement. Add in the psychological cost and the organizational fatigue that comes from turnover, and it’s an easy decision. 
  For single practice and niche specialist firms like Davies, it’s more a question of hiring process and level.  Junior and mid-level staff should be able to change teams without a lot of disruption to the client, since the client’s relationship should be with more senior people on the team. At more senior levels, that kind of change should be rare, and near-impossible in a boutique or specialist firm. By way of analogy, you don’t see major league baseball players change from being outfielders to pitchers once they’ve been in the league for six years. They’re mature professionals who know what they are, what they’re skilled at, and how they create value.
  On the hiring front, the right assessments and asking the right questions help make sure we’re putting the right people in the jobs. They have to have the skills, passion, work ethic, values, character, and sense of humor to fit. They have to connect with our practice areas or they’ll want to scratch their eyes out in six months. Kolbe, Meyers Briggs, handwriting analysis, and other assessments—combined with interviews and reference checks—help reveal what we need to know.
FT: It is true that clients demand strong and stable teams—but this doesn’t mean they have to be completely static. Where there is a long term relationship between client and agency, it can be tempting to leave the same team in place the whole time, especially when it is working well. However, making selective, carefully thought through changes has as many benefits for the client as it does for the team. For the individuals on the team, changing their client portfolio helps bring new challenges, opportunities to learn and chances to work with new people. For the client, it can help to bring in fresh energy, new ideas and a perspective which is not limited by what has gone before.
KO: Clients don’t usually like change—but sometimes they need change. In firms with a low turnover we have employees handling a client for 10-plus years and the client changes, new contacts come on board, the company buys other companies, they go through mergers, new client team members don’t necessary like an agency person that knows more about their company than they do. As an agency you have to push account team changes, the key here is to do this in a planned, structured way. We have shown our clients “account succession plans” to show them the blueprint on our team working for them and what changes we see coming in the next 12 months. This way, we work together with the client in developing the skills of the team members for the change and we avoid unpleasant surprises for the client while keeping our people challenged and excited.
GJ: David makes some very good points.  Agree with them all  I would just add every account team that is effective must have an identified primary and secondary leader keenly interested in the client and their overarching business. These roles evolve over time for the team—secondary becomes primary allowing the primary to take on new opportunities in a two to three year window. That keeps your top talent fresh and enables secondary leaders to move up on major business. You need to provide opportunities to have younger professionals move into these positions over time and also look for one-off projects or outside of the box work to keep the overall business dynamic—media training, crisis work, non-profit work, etcetera.. 
  If people are frustrated and feel like they want a change on an account, timely reviews and an ongoing  mentor program bring issues to the surface sooner rather than later.
SS: Insufficient challenge is the number one reason people leave a firm, according to our annual employee survey.  Therefore, it is critical to move an executive in that situation off of a client team, despite the client’s comfort level, as long as there is an excellent replacement. Ultimately, clients are concerned about productivity, and I find most accept people change gracefully if the new executive is a good personality blend and produces up to standard. Taking that step is far better than losing a superior executive.

PH: One of the biggest issues for our profession, I think, can be seen in the demographics of our Best Agencies to Work For survey. Among respondents under the age of 26, women outnumber men in the agency world by about four to one. But among respondents 46 and over, the ratio is almost 50-50. During those 20 years, the industry loses three-quarters of its female employees. Perhaps some of that is inevitable, but surely there must be more we can do as an industry to accommodate the life choices women make, to be more flexible, to allow them an off-ramp and an on-ramp back into the profession.
BE: It’s certainly an acute issue for public affairs and crisis specialist firms, where the time commitment and intensity are very high and the on-ramp probably looks daunting for a woman returning to the profession.  The off-ramp and on-ramp concept could be facilitated by professional education—“Returning to the Industry”—as a series of sessions offered at discounted prices by PRSA, Bulldog, or others.  It can also be facilitated by offering flex time, job sharing, and other types of “role realignment” to make the decision less binary for woman. We should be able to craft roles, even if on a case-by-case basis, that maximizes the value for more experienced counselors can offer clients, their team members, and the overall firm.
TC: We work in a tough business for not just women but for everyone. The hours are long and odd; the client service needs are 24/7 and most times you need to be onsite managing a team. In my experience, many of our working moms manage to make the transition back to work well. It is really tough but manageable and works better when there is a husband (or significant other) who can help when running late with pick ups and drop offs. 
  Flex schedules, partial work weeks and work from home options make it easier but it gets extremely tough when children hit grade school. That is the point when children need more parenting: family dinners, homework, after school activities, and most significantly kids needs to keep to a set schedule, makes it really tough. I have seen some of the best professionals (and people) have to make the choice and it is not fair. I think men may survive longer because they have wives who can make up for their job obligations.  I have sought, and will continue to seek out, anyone trying get back in the business.  
LC: One issue that bugs me is that PR is just plain ageist. Agencies just don’t employ older women—and there must be thousands out there. I know a mature woman with great PR experience and ability, but not at a senior level, who gave up looking for PR work in her mid 40s because she was sick of recruiters faces falling when she walked into the room, and of never getting past first interview, ever. I bet that between us on this email list, we employ few if any account executives or account managers who are older than 35.
PG: It is an enormous challenge to keep the work life balance manageable for both men and women in this industry. We continue to work hard to find the necessary balance between giving parents flexibility and options, without alienating both their clients and other team members. We have been able to implement most of the regular initiatives—flexible working, home working, reduced hours—but we have also tried to instill these options as something that is available to all our staff for life style reasons—not just to parents. This seems to encourage more transparency about newer working practices.
  Success of these practices usually requires clear parameters, but also a strong sense of ‘give and take.’ We have been lucky—or maybe we have helped along the way. We have generally been able to reap the best from return-to-work mums by showing our confidence in their ability to deliver and be accountable. It’s about results and client and team satisfaction and not how late you work! The risk is that any hiccups or abuse of this trust usually impact on the teams who have to pick up the problem before it affects the clients—and we all know how bad news travels faster than good in an agency!
DP: The struggles of the working mom are challenging at best and even more so in the service industry, which is rarely 9-to-5. At PainePR, we’ve had a pretty good track record with women who wanted to continue with their careers, but I’d agree with Tom that the most successful women have been those with support systems at home be it a husband, life partner or nanny. We’ve also found that most women who established a PR career before having children aren’t looking to exit the work force, but simply need to cut down on the client requirements in order to put more hours towards their family. 
  We’ve established a strong freelance network with these former employees who have the ultimate flexibility to design their own schedule based on the number of hours they feel they can work during the week. This group of about five to 10 women has been instrumental to our work product over the years.  And we’d hire any of them back in a heart beat if they wanted to come back to work on a more traditional schedule.
 Just as Cohn & Wolfe, we also provide flexible benefits, such as work from home, reduced work weeks, daily flex hours, rich time off benefits, etcetera, and make them available to employees in general since we don’t distinguish work/life balance as being a working mom issue. Beyond that, and specific to working parents—men and women alike—we’ve created an e-mail forum to share best practices on work balance and raising children. Whether it’s needed information on how to travel with a child or how to get a client recommendation done, the group interacts a lot to help each other out with feedback.
  Because of the nature of our work, I think we can push the envelop on creative and flexible schedules and work options. Beyond that, we need to push at government levels for better and more consistent working parent and general work/life balance benefits for employees.
SS: Why not start with taking a survey to discover why women have left the industry?  Then we would have data that can be assessed. Only then can we develop a program that is strategic and relevant. We also should study what other professional services firms have done, like Ernst & Young, which has an office of retention dedicated to flexible programs for women. It is doubtful that most PR firms have such.

PH: That raises an interesting question for me, which is the extent to which employee retention is a real priority. I assume everyone conducts exit interviews to find out why people are leaving, but do firms have formal retention strategies? Is retention built into the appraisal system for managers? Is any part of the bonus system dependent upon retention?
LC: Aside from exit interviews which tend to be limited in effect because both sides want to maintain a good relationship for selfish reasons—to get a good future reference, to maintain a good external image—I wonder if any agencies have done surveys of past employees run by an independent researcher. That would have a better chance of gaining a true image of where we could improve.
  Let’s turn it on its head though. Not “what processes and corporate statements do we have in place to ensure better retention” and not “let’s incentivize our managers to retain staff” but “how does the personality of the senior management of this company affect the way people feel about the company?”
  If you have an aggressive and uncompromising company principal or CEO, then you have an environment that is aggressive and uncompromising. If you have a collegial and considerate CEO, then the rewards in terms of retention will follow. How many CEOs have had the guts to survey employees about the atmosphere and culture where they work, and then look at themselves and ask “how do I, personally, need to change to improve this?” In service businesses, where the product is the time of our employees, it is a critical business factor. It is, I believe, one of the most important retention factors and one that CEOs or principals generally would prefer not to address.
GJ: We recognize length of time with more opportunities to lead at our firm. In short, loyalty is rewarded.  
  Lyle’s point is important about the leadership of the firm. They have to walk the talk and the set the tone for openness, integrity and honesty. So many times titles can get in the way with retention issues. We have tossed titles out the window here. We work for our clients and strive to make ourselves better. Our identity is not wrapped up in the size of the office or title. It is defined by doing good work and representing our community, industry and clients with the highest degree of performance. When anniversaries are reached at our firm, year one, two, etc., we celebrate with balloons on the door and notes of heartfelt thanks,
KO: Retention is a strategy for us—but retention of some people. We define our A-player list and we define a specific strategy for retention of these people. Retention means title for some people, work conditions to others, salary for others and recognition for others. When your list is short you can work in different retention strategies for each.
  However, at the end of the day, we find that if someone is ready to leave and close the circle with the agency, they end up leaving.
LC: That’s true enough. I have found that if someone resigns and you throw salary, title or whatever at them to get them to stay that they leave within six months anyway.
SS: Being a “great place to work” is no doubt a retention magnet, as long as you walk the talk. But I have found over the years that it is some form of equity that really keeps people. Having “skin in the game” in a growth operation makes the difference. Bonuses and praise help, but unless it is a guaranteed big amount annually, I’d say equity is the ultimate reward—if the firm is growing.

PH: Okay, that opens up a final area, which is giving people ownership. Obviously, in an entrepreneurial environment, that can be literal ownership, and I get the sense that more and more firms are open to that approach. But are there other mechanisms by which you can give people ownership in an environment where the