WHAT THE NUMBERS TELL US, AND WHAT MORE NEEDS TO BE SAID By Scott Hum

Almost one of every 10. That's how many people the top Chicago agencies have lost just since the beginning of 1992, according to headcounts we

That survey has rekindled the headshaking and the ‘What’s wrong in Chicago?’ questions that always accompany bad news. And there’s no denying the numbers are bad: the 12 major Chicago agencies from which we got employment numbers shed a net total of 451 positions between Jan. 1, 1992, and July 1, 1993. At CME-KHBB, for example, the staff was reduced by more than 40% in that 18-month period. D’Arcy Masius Benton & Bowles trimmed its staff by 23%; DDB Needham Chicago is down 104 positions, or 18%.
That 451 total is a net number, so the real volume of layoffs throughout the market likely was higher, then tempered some by need-dictated hires. But that’s a frightening number of advertising positions eliminated, and discouraging to young people hoping to start ad careers in Chicago, or anywhere else.
The result of the cuts is that agencies in Chicago and everywhere are, like their clients, trying to do more with less. The hope, on both sides, is that they’ve kept the best. But even if they have, have agencies taken a short-term solution that will make for long-term problems?
‘One of my worries is that we’ve created a ‘lost generation’ in this industry.’ said Cramer-Krasselt president Peter Krivkovich. ‘You don’t want to cut your senior people because they’re running the accounts, and you don’t need to cut your most junior people because they’re not costing you that much, so you cut in middle. That may solve the problem for now, but who’s going to be running this business in 10 years?
‘We’ve done well and we are hiring, but we go to find some of the people in the 30-to-45-year-old range who’ve been let go from other agencies and you can’t find them. They’re out of the business; they’re gone. That troubles me.’
It also worries Ian Miller, president/managing partner of Tatham Euro RSCG, who is serving as president of the Chicago Advertising Federation. ‘We may be losing the good client handlers in these cutbacks,’ he said. ‘There are the get-things-done, grow-things people, and they’re important, and you keep them. But the ones who often lose out are the quieter, less aggressive types, but they’re also the long-term thinkers and the ones who’ve kept clients happy. Lose them and maybe we become the real estate business, where the only thing getting ahead is getting ahead.’
So is it a Chicago problem or an industry problem? The answers are yes, said Janis Brett-Elspas, president of Rachel P.R. Services, an ad recruitment and placement firm with offices in Chicago and on the Coasts. ‘What you’re seeing is a magnification of the natural volatility of this business brought on by the recession,’ she said. It’s an industry problem that may be ‘hitting a little harder in Chicago than elsewhere, although the Southeast is probably worse.’
But Brett-Elspas and others remind us that numbers – including the employment numbers – can be deceiving. Employment may be down, and while the industry may be hurting, it isn’t dying.
‘I saw the numbers, but all I can say is, we’re hiring,’ said Jack Levy, president of Chicago’s Jack Levy & Associates. ‘It’s like there are two different industries: the small and medium-size agencies are doing well; many of the big agencies are sucking wind.’
The industry isn’t collapsing. Many of those who lost jobs are finding that using freelancers (the agency business’s take on ‘outsourcing’) are in use and in demand more than ever. Healthcare marketing is booming and may provide a new source of agency positions soon.
‘The market’s soft, but not hopeless,’ said Chicago recruiter Sandy Wade. ‘Many of the jobs lost won’t come back, but this industry is reinventing itself and people need to be hopeful. I don’t say, ‘Don’t expect to find a job in Chicago.’ I tell people to watch the trends, be ready for the next step. There are openings for the right people.’
In this time of integrated marketing communications, many of the new jobs are coming in the non-traditional services. Pat Wheelless, a Chicago placement consultant in direct marketing, said her firm is ‘turning business down. Clients are cost-conscious and not hiring whimsically, but in direct marketing they are hiring.’
The layoffs are a sad reality, but not a failing specific to Chicago, and not terminal. The best solution may be one management guru Tom Peters suggested last week in his ‘On Excellence’ newspaper column: ‘Remind yourself that you’re in the midst of something really big. Maybe that, in and of itself, will make us a more receptive to the next cataclysmic disruption that will surely come our way.’
Copyright Adweek L.P. (1993)