Avoid Talent Turnover and Inconsistent Cash Flow to Keep your Agency Profitable

Tweet it:'In this blog we break down two of the biggest challenges faced by agencies - talent turnover and inconsistent cash flow – and how to combat them'

In our report, Talent, Transformation and Growth: Creative Agencies in 2022, we took a deep dive into the challenges faced by agencies by surveying nearly 200 agency professionals from all corners of the globe.

In this blog we’ll take a look at two of the biggest: talent turnover and inconsistent cash flow. Read on to discover why these common pitfalls pose such a challenge and what solutions you can adopt to keep your agency secure.

Talent Turnover is Trending Higher Than Ever

Sixty percent of respondents identified “attracting and retaining the right talent” as their agency’s biggest area for improvement over the next year. And it shouldn’t come as a surprise.

The global pandemic caused more people than ever before to re-evaluate what they want out of their working lives. As a result, one in five workers have said that they are likely to switch to a new employer in the next 12 months, according to PwC’s Global Workforce Hopes and Fears Survey.

This presents a particular problem for creative agencies. The skills and expertise you need from your people aren’t commonplace, and so finding the right talent for your firm can be more difficult than in other industries. It’s therefore vital that you can attract the best new talent and – more importantly – hold on to the excellent people you already have.

This may seem easier said than done. But there are a couple of key ways you can improve your employees’ working lives – and make sure they want to keep working with you for a long time to come.

Help your people avoid unnecessary stress

When timelines are tight, and resources are limited, it can put pressure on your employees – reducing morale, productivity, and motivation. But there are some simple ways to reduce these stressors.

Improving your resource visibility and management will help you allocate the right people and the right resources to each project. And basing this allocation on skills and expertise rather than availability will make sure all your people are working on projects that suit them.

Keep your people engaged by giving them opportunities to build on their skillsets

With a clear view of your projects and your people’s development goals, you can match employees with projects that offer the opportunity for them to develop new skills – and even pair employees who can learn from each other together, to give them space to share their expertise.

The best part is that this increases employee loyalty and helps build their skills at the same time.

Inconsistent Cash Flow Leads to Lost Profits

Cash flow ranks alongside talent retention as one of the major problems facing creative agencies. Forecasting revenue was the biggest challenge for 10% of the agencies we spoke to, and this wasn’t necessarily linked to their size. Smaller agencies that may only have enough resources to take on one or two projects at a time may have too little cash coming in. Larger, more distributed agencies might not have clear visibility into the reality of their global pipeline.

And agencies of any size might lose profit due to projects coming in over time and budget. In fact, 31% of agencies reported lower profit margins in 2022 and 63% of agencies stated that 10% or more of their projects came in over budget.

Despite these issues seeming separate on the surface, they can all be solved by employing the right technology in your organization.

Many project ERP solutions give great insight into historic revenue and project data. But while this shows you where your projects have gone over time and budget in the past – it doesn’t necessarily improve your ability to forecast in the future.

At Deltek, we create solutions that offer robust forecasting capabilities and are tailored to the unique needs of project-based businesses. And with Deltek WorkBook, you can even benefit from integrated pipeline management and revenue forecasting.

With these tools, you can get greater visibility of your project data and build pipelines that set your agency up for a more profitable future.

Discover Three Other Common Agency Pitfalls and How to Avoid Them

Talent turnover and inconsistent cash flow are two of the five most common pitfalls that agencies face.

We’ve put together a guide: The 5 Most Common Agency Pitfalls – and How to Avoid Them, that will give you more information on the two challenges highlighted in this blog – and introduce you to three more:

• Unsteady time and resource management
• Market saturation
• A reactive approach to technology

We’ve also included an example of how one of our customers, TMW Unlimited, is putting this advice into practice – so you can see what avoiding these pitfalls looks like in real operating conditions.