In the first post in our RSW 2024 Agency New Business report series, we talked average length of time to close business, and now in Part 2, we’re tackling decreasing new business director tenure at ad agencies in 2024.
46% of agencies surveyed reported hiring was somewhat or very difficult so far in 2024
So while Ad Age in June reported worldwide employment for the five largest legacy firms edged up 1.6% in 2023, it’s obviously a different story for small and mid-sized firms, which are predominantly what makes up the bulk of our survey report takers.
For these firms, it’s a constant balancing act.
It can be an imposing task to hire at the salary necessary to bring on a talented new business director with the type of experience that will translate to closed business.
And our initial question here was aimed at hiring generally within the industry, so the challenges don’t lie solely within the new business position.
Per the Leadership Flagship blog:
As Generation Z continues to enter the workforce, their unique values and expectations shape hiring strategies. Today, Gen Z makes up a sizable portion of the global workforce, and their expectations differ markedly from previous generations. They seek purpose-driven work, flexible working conditions, and a strong commitment to diversity and inclusion from employers.
But as we’ll see, hiring for, and retaining, the new business director position are no easy tasks for small and mid-sized firms.
Only 32% of firms hired a full-time new business hunter/director/manager in the past three years, down from previous years.
We’re at an interesting time in business development, where keeping up with technology has never been more important. And this can be quite difficult for small and mid-sized firms, Not only from a financial standpoint, but also in terms of. even knowing what to look for today when hiring for an individual on the business development side.
An Omnichannel approach has never been more important, as relying solely on email, for example, is not as simple as it was even 5 years ago.
Indiscriminate “spray and pray” email blasts are not only ineffective but will also put your company domain in jeopardy.
Agencies currently face hiring an individual who may have a certain level of experience, but who are expensive, and who may or may not be aware of what technology is nice to have or must have.
And then along with that are the costs of this technology, which can be tough for small and mid-sized firms to acquire.
(A shout out to our Ops Team and new business directors at RSW, who spend a fair amount of time researching and testing new and different platforms.)
36% of agencies report their last new business hire was unsuccessful, versus 44% last year.
A bright spot here as agencies are apparently seeing some success with the new business directors they are hiring.
And while the spotlight in this post has predominantly fallen on the new business director’s themselves, agency leadership plays a part in this as well.
Once hired, agencies need to reassess how they support and retain these key hires, particularly given the already challenging landscape of acquiring new business.
Finding the right talent, then fostering a supportive environment, and ensuring realistic expectations are crucial to success.
New business director tenure remains short, with 76% lasting 2 years or less, a significant increase from 38% in 2023.
With that being said, the fact remains that tenure of new business directors, to a greater extent than ever in 2024, remains short.
This high turnover rate can have significant implications for mid-sized and small agency growth, and certainly helps explain the overall low rate of hiring for this position in 2024.
One area agencies should assess is how they hire for new business director position.
We typically see one of three mistakes made (along with the understanding of tech, or lack thereof, mentioned above):
- Hiring someone green and thinking they can be trained up,
- Hiring for their network (which will eventually run out)
- Not qualifying the candidate’s inside sales skills thoroughly enough
Continuing our series, we do see some positives on the business development front heading into 2025, but the success and tenure of new business directors at ad agencies remains a real challenge for small and mid-sized firms.