Study: Ad Agencies' Return-to-Office Mandates Pose Hiring and Retention Challenges

Hiring challenges and low employee morale are putting pressure on agencies' stringent return-to-office (RTO) mandates, according to new data from WorkReduce, a staffing firm that provides flexible talent to agencies and brands. Most holding companies, which employ thousands of ad industry employees, are rolling out and doubling down on RTO policies. In August, Publicis Groupe announced a policy requiring employees to work from the office three days each week. Its leader, Arthur Sadoun, told Adweek that RTO is a crucial part of the group's 2024 strategy. Publicis isn't alone. Now, almost four years since the Covid-19 pandemic started, remote work is becoming less common. More than half—52%—of the 1,000 ad industry employees who responded to a recent WorkReduce survey said their employers either expect them back in the office at least one day each week, or that they plan to.But these policies aren't good for employee morale and contribute to churn, survey data reveals. Those navigating RTO mandates are 40% more likely to seek new work and 96% more likely at risk for burnout than remote employees. At the same time, agencies are having trouble staffing open roles because applicants aren't willing to go back to the office, according to Brian Dolan, CEO of WorkReduce. "You get four times the qualified applicants for a remote role when we post them, than you do for an in-person one—even in a metro like New York where, in theory, you should have a lot of talent," Dolan said. WorkReduce fielded its survey in Q4 2023 and published the findings in its new Media Buying and Workforce Agility report. Agencies Need a Strong Plan for Freelancers. Here’s How to Develop One Fewer candidates willing to RTO When looking at WorkReduce's job applicant data, Dolan found the company received 40 applications for a hybrid role, compared to 250 applications for a fully remote posting. By Dolan's estimate, as many as a third of WorkReduce candidates are pulling out of hiring processes and citing hybrid work policies as the reason. The number is now outpacing those who opt out of hiring processes due to compensation. One holding company, which Dolan declined to name, has been engaging with WorkReduce to fill hybrid roles despite its RTO policy. "This is one of the ones that is very public about their return-to-office policy, and they're relaxing it on 'certain teams' for hard-to-fill roles," said Dolan. The holding company wants new hires available on select dates, but not every day."Reading between the lines, it's like somebody's ... covering their ass a little bit," Dolan said. Holding company agencies want to comply with RTO mandates as minimally as possible, Dolan said, as human resources teams struggle to fill their hiring mandates. RTO policies drive churn As these staffing challenges mount, a growing number of frustrated employees are looking for new jobs. A little more than half—51%—of survey respondents said they are planning to look for new roles within the next year. That's compared to 36% for employees across industries, according to a recent Qualtrics report.This might be because employees at offices with RTO mandates are experiencing two times the burnout of remote workers, and 46% of ad industry employees are already at risk of burnout. "Somebody at one of these agencies was like, 'I'm just not at a point in my life where commuting an hour and a half each way is attractive anymore,'" Dolan said. Who benefits? On the other hand, return to in-person work comes with some benefits, the survey data revealed. Employees who are back in the office are 32% more likely to report being fairly compensated than peers in remote roles and 50% more likely to see advancement potential in their roles. But agencies' hiring challenges suggest that these positives aren't impactful enough to counteract RTO's pitfalls. "Burnout is pushing workers away faster than incentive structures can keep them in place," the WorkReduce report states. Employee disillusionment leaves an opening for more flexible agencies to lure top talent away from their uncompromising competitors. In fact, three large independent agencies currently working with WorkReduce are taking a different tact than the holding companies, Dolan said. One WorkReduce client told him it was embracing fully remote, global hiring for the long term. "I heard one of them say, 'We see this as an opening for us to go get more business from the holding companies because they want to do all this legacy [hiring] stuff. We're going to embrace [remote work],'" Dolan told Adweek. Some are implementing RTO policies but allowing certain flex roles to be remote. "There are cracks showing in this RTO strategy. It stands to reason, right? People left New York ... a lot of people left New York [during the pandemic]," Dolan said. Publicis CEO Considers Return to Office Mandate and AI Investments Crucial Business Strategies