MARKET FOCUS: Building an agency

PR firms are hiring again, and they are looking at the best ways of stacking the talent.

PR firms are hiring again, and they are looking at the best ways of stacking the talent.

As more RFPs go out and PR business begins to pick up again, agencies have started to address some of the staffing issues that arose during the economic downturn.

There is almost universal agreement that the PR industry is facing a talent crunch - particularly in specialty fields, such as healthcare, engineering, and technology, and especially for mid-level positions.

To respond to the shortage, many agencies are hiring people with nontraditional backgrounds and are doing their best to grow talent from inside the company. Some agencies are even changing their staff structure.

At the same time, hiring managers and senior executives agree that preserving the firm's culture is still the primary consideration in hiring decisions.

"In the past when you had a roaring economy, you tended to be hiring somewhat ahead of the curve," says Helen Ostrowski, CEO of Porter Novelli. "What has tended to happen is that we are hiring to the curve of business development."

So in addition to hiring employees to meet client needs, PN is also using the economic turnaround to invest in areas of the agency that it has always wanted to strengthen.

Ellen Shedlarz, chief talent officer at Hill & Knowlton, notes that senior-level recruitment has remained strong despite economic ups and downs.

"As the client base gets stronger, we really need that mid-level base of people," she says.

"That's where we had the biggest losses," says Judith Harrison, SVP of HR at Ruder Finn, of the mid-level crunch. "The candidate pool decreased significantly in the past year."

At the same time, other agencies report that there is more movement among the senior level.

"There's a little more receptivity now; people [at the senior level] want to listen to a new opportunity," says Agnes Gioconda, chief talent officer at Fleishman-Hillard.

The thinning of mid-level talent has prompted Fleishman to move - willingly - into an hourglass structure, one that concentrates on entry- and senior-level hiring, and promotes internally to fill mid-level positions.

"I think our models are shifting slightly. [Clients] want senior people on their account," Gioconda says. "Many agencies used to be the standard pyramid. I see us more as an inverted pyramid, moving to an hourglass. And the higher up [a new] position is, the more we're likely to promote from within."

At Waggener Edstrom, Daniele Joudene, SVP of HR, notes that the agency is becoming "more matrix" as client accounts require services across different practices and office locations.

"I think that we have a blossoming matrix organization," she says. "We are becoming more matrix going forward, with reporting lines slightly blurred."

Ostrowski attributes the difficulty in mid-level hiring to the lack of business development during the lean economic years; mid-level managers had fewer opportunities to hone their skills.

"This is a changing business," she says. "There's less hierarchical up and down. It's all about providing solutions to client needs."

Catering to talent

Job titles and responsibilities also have become more fluid as a new crop of talent replaces SVPs who have left agencies. Companies are just as likely to fit a position to a promising candidate as a candidate to an existing position.

"Every time a senior person leaves, we re-evaluate the post and ask ourselves if that's the direction we want to go," Shedlarz says. "We don't want anyone to be a cookie-cutter."

"We think about creating a post for a great candidate when we see a great candidate," Harrison agrees.

Gioconda notes that Fleishman will often try to work with the strengths and weaknesses of new hires. If the new executive isn't as strong as his or her predecessor with administration, for instance, the agency might delegate some of those responsibilities to other staffers.

HR managers also note that they are concentrating on retention as much as recruitment. "When we think about staffing, we also think about all the internal people we want to grow," Joudene says, adding that Wag Ed aims to fill about 65% to 70% of its senior positions internally.

The agency also allows employees to spend a certain percentage of their salary on education. "We have a lot of movement at Waggener. That's something we really push for," she notes.

Internship programs also have stayed strong during the economic downturn. Wag Ed, for instance, is piloting an internship program in Europe.

Internal-education programs have also helped take some pressure off the so-called talent crunch, which has hit healthcare practices most acutely.

"Healthcare companies have increased their internal PR," Shedlarz says. "We try to be very, very creative with our healthcare hiring. Healthcare has been a hard point for all of us."

PN is "reaching outside our usual suspects," drawing talent from unexpected places, from the client side, government, and nonprofits, Ostrowski notes. But she also sees the upside to nontraditional hiring.

"I think that we're going to enrich the talent pool [and] also the offerings to clients," she says. "You really need to offer new dimensions."

And as PR becomes more entrenched in the marketing mix, "I also see much more willingness to consider people who come from various marketing backgrounds," says Harrison.

Ostrowski adds that many former employees - who were laid off or moved around - are returning to their former agencies, and that this boomerang phenomenon can prove advantageous for talent-crunched agencies.

"Employers aren't always aware of how hard it is for employees to come back," she says. "Employers, as they look at the talent pool, should not overlook employees ... who were valuable to them."

Maintaining agency culture

But even with the talent crunch, agencies have remained steadfast in their commitment to preserving a certain culture within the company.

Culture is "wildly important," says Margie Fox, founder of Maloney & Fox (owned by Wag Ed), who describes her firm as having a "corporate un-culture."

"We have a very idiosyncratic, diverse group of people," she says. "The issue is finding someone to match the fabric and culture of any given client."

She adds that the agency has been able to "capitalize" on unique talents - writers, filmmakers, world travelers - "people who don't necessarily come with a PR pedigree."

Gioconda notes that a cultural fit is what enables employees to work together. "Our people will reject someone who is off-culture," she says. "People will just not work with that individual."

Fleishman, therefore, uses behavioral interviews to get a sense of how candidates approach problems. The agency also introduces candidates to its "10 philosophy points."

H&K, in turn, has its "Leadership Model."

"It defines what success is at Hill & Knowlton," Shedlarz says, adding that the candidates will go through multiple rounds of interviewing, meeting as many people as possible.

Fox notes that Maloney & Fox's website allows candidates to get a sense of the agency before they even submit a résumé.

"I try to scare people away," she says, half-jokingly. "We like to be as candid as possible. It's so important that they get who we are."

Joudene notes that even after the hiring process is complete, Wag Ed continues to integrate people into the agency's culture through networking, dinners, and mentoring.

"The reason we are doing more around immersion is because it costs us so much money when people leave," she says. "We, like all agencies, have been concerned with retention."

Ostrowski echoes the sentiment that it's necessary to have people who are "like-minded in terms of culture." But she cautions, "You want to strike that right balance. The worst thing that can happen is for you to get an all-vanilla organization."

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