In the video above, former McCann-Erickson Manchester CEO, Brian Childs, talks about the trend, which agencies have towards over-staffing. Childs breaks down his theory that 10% of staffers in agencies are not needed. Now, some of you (especially in smaller agencies) are thinking “I work my ass off. I’d love a little help.” Sure, but Childs is focused on the profitability of an agency, which he says requires it to be lean, chocked full of harried, stressed bodies. He recently wrote:
“Agencies make real money when they do not have the staff to handle the business. Think about it – it is true. Every agency I have ever been in (and that is hundreds) are at least 10% overstaffed. People just creep in over the previous year and you end up with more people and less income per head. All the metrics work against you and that is before you factor in “le crunch”. You need to look at your payroll now.”Advertisement
In some ways, these recent layoffs are a culling of excess bodies that shouldn’t have been there in the first place. Everyone can point to a least one bloated agency that is now trying to get down to its ideal fighting weight. It’s the natural slim down process to profitability and hopefully, longevity for some of these shops. And guess what? Math or no… It still sucks.