CIPR Conversation exclusive on the cost of brain drain in PR and media industry from Marco Forato, CMO of Unum.
The PR and media industry has a big problem: high staff turnover is still widespread throughout the industry across all levels. It is fairly common for PRs to see themselves as ‘careerists’, and to stay in a role for just a year or two before moving on. The problem being that when someone leaves a company it creates a ripple effect and this is particularly true for PR as an industry where client relationships – built over time – and detailed brand or sector knowledge are essential and not something that can be easily turned on and off by an incoming replacement. The resource gap left by the exiting employee puts pressure on internal teams, which leads to increased stress and can lead to more turnover as wellness takes a back seat in terms of company priorities. Clients, too, will inevitably pick-up on tensions during times of transitions, especially if their favourite account contact leaves – and may even take their business elsewhere.
Although it has been understood for some time that staff turnover has an impact on businesses, new research by Oxford Economics, commissioned by Income Protection specialists Unum, explores how much companies are actually losing financially as a result of high staff turnover. The research found that turnover costs the industry £184m per annum, or £25,787per employee which is not an insignificant amount.
Logistical costs of replacing employees, such as advertising and agency fees, are only a small part of this huge figure. The main cost implication for firms replacing staff is the lost output a company experiences during the period of time in which a new employee is getting up to speed or reaching their ‘Optimum Productivity Level’ (OPL). In fact, it takes new employees in the media sector an average of 20 weeks to reach their OPL, and it can be up to 48 weeks if they are completely new to the industry. While the logistical cost of replacing an employee will probably come as no surprise to businesses, the financial impact of having replacement workers learn the ropes has been intangible until now.
So what’s the solution? There needs to be more emphasis at board level on retaining and nurturing talent not only to ensure a happy and healthy workforce but also to reduce the cost of staff turnover. It makes business sense. Put simply, people stay with companies that demonstrate they value – and care for – their employees. Financial reward is not always the answer – we know that, following the recession, staff increasingly consider total rewards packages beyond basic salary. PR agencies tend to have a good track record for embracing soft perks such as flexible working, but as an industry they have been slow to offer tangible employee benefits such as Income Protection and health insurance, which are a great way to show staff that they are truly supported and valued.
PR is often seen as a ‘creative’ industry and a sector that leads the way with cross-platform innovation. Skilled employees – many of whom are young, ambitious and eager to work in a fast-paced, creative environment – are often snapped up quickly. Companies need to do more to protect their most important asset, their people, to make sure that they retain their best talent. It is important to remember that a PR agency is only as valuable to their clients as the people they employ – so recruiting and retaining the best talent should be the highest priority.
Unum is one of the UK’s leading providers of financial protection, with more than 40 years’ experience in the industry. Unum specialises in forward-thinking, innovative benefits, and work with advisers and their clients to protect staff members from the consequences of serious illness, injury or death. As a market leader in Income Protection, Unum aims to provide a back-up plan to all UK employees, offering a wide range of cover plans to suit every business and budget. The research findings are taken from a report written by Oxford Economics in February 2014, commissioned by Unum to show the cost of staff turnover in the UK.