How to reduce employee turnover at your agency

Employees come, employees go; it’s a fact of life for any business. But what happens when your agency starts haemorrhaging talent? At best, high turnover can be frustrating. At worst, it can hamper your agency’s growth and lead to clients waving goodbye alongside your best staff.

To understand how to stop employee turnover, we need to consider why it happens and how high employee turnover can impact your agency.

Why is preventing employee turnover important?

A high number of employees leaving a business suggests something isn’t working. Simply, if employees are enjoying their experience and getting their needs met, they’re unlikely to risk losing that by moving to another company.

High turnover, also known as churn, is a warning sign for many reasons, but it can also have significant consequences for a business. Let’s look at a few.

Hiring costs

Businesses with high turnover rates face much higher costs than those that retain their staff. The recruitment process can be costly when you take into account recruitment agency fees, income lost due to unfilled positions, and the time investment required to interview and onboard new employees.

According to the Bureau of Labor Statistics, the annual overall turnover rate in the U.S. was 26.3% in 2017. When you consider the cost to replace a single employee sits between 1.5 and 2 times their annual salary, it’s clear that high turnover rates aren’t sustainable. Turnover can cost a business anywhere from thousands to millions of dollars annually, depending on its size and the average wage it pays.

Consistency for clients

For any business, high turnover can be a nightmare for operations. The issue is worse in agency teams, where agency-client relationships are a huge decider of success.

In an ideal world, a client would work with one agency team for an extended period of time. 

The longer the two teams work together, the more efficient their communication will be, and the better the agency team will understand their client. Clients who feel understood and supported by their agency are more likely to be loyal.

However, when an agency has a high turnover rate, the people making up those client teams will regularly change. It’s no surprise clients become frustrated when there’s no consistency in the team supporting them. They don’t know who to reach out to, and projects can suffer when they’re regularly handed over to people new to the client.

Team morale

Lastly, high turnover can impact team morale. When several workers exit an agency in quick succession, the remaining employees are left to pick up the slack while those roles are filled. The burden of taking on additional hours and responsibilities will become unbearable over time, leading to decreased motivation and further resignations.

Over time, a lack of motivation can erode an agency’s productivity. According to Gallup, poor employee engagement costs businesses worldwide $7.8 trillion annually in productivity or 11% of global GDP.

Six causes of high employee dissatisfaction and how to reduce turnover

So, now we understand its impact, let’s look at six ways to reduce employee turnover.

Lack of progression

The problem: 87% of Millennials consider their professional growth and development opportunities to be important to them, much higher than the 69% of non-Millennials who also agree. As millennials are forecast to represent around 75% of the global workforce by 2025, businesses that lack opportunities for progression will begin to see higher turnover rates.

In small agencies, this can occur when junior employees are ready to step up, but there’s no role for them to move into. Millennials, in particular, are known for job hopping to secure more senior positions, potentially because they’re not available internally.

Plus, a lack of career development support caused by weak or nonexistent frameworks, bad management, or — let’s be frank — discrimination can block employees from deserved promotions, sending them looking elsewhere.

The solution: To retain your agency’s best talent, invest in creating robust career development frameworks. These should include individualized development plans, regular reviews to monitor progress and goals, and continuous opportunities for professional development.

Similarly, doing away with outdated processes will remove barriers to progress. If your agency is struggling to implement these processes or isn’t sure how to create new roles to support upward mobility, engage a specialist consultant.

Poor pay or benefits

The problem: It’s a simple equation. More money = happy staff. OK, in reality, keeping employees happy isn’t nearly that simple, but job compensation is a huge driver of job satisfaction.

In a survey of people who left their jobs during the Great Resignation, 26.7% stated they did so because they found a job with better pay. This was higher than the next most popular answer, ‘because they found a job that was more personally rewarding,’ by over nine percentage points.

The solution: As the conversation about the living wage continues in the US and worldwide, it’s clear businesses need to offer competitive salaries and generous benefits. Consider reviewing your pay structures, and look into offering health insurance, sufficient paid time off, maternity pay, and more, at your agency. Competitive packages will attract and retain the best talent.


The problem: Burnout has been a huge problem in agencies for as long as advertising has been a thing. Burnout is a sense of mental and physical exhaustion caused by long-term stress and overworking, which can lead to severe mental health conditions, including anxiety, depression, and insomnia.

Burnout is especially prevalent in the marketing and advertising industries because of agency culture. This includes prioritizing profit over well-being, expectations to over-service clients, demanding workloads, and toxic work environments. With 57% of agencies reporting ‘Employee well-being/burn-out’ as their top challenge regarding people and culture, there’s no denying agency culture needs to change.

The solution: Reducing employee turnover by preventing burnout isn’t easy, but it is possible. In the UK, more than half (53%) of marketing professionals work at least five hours of overtime per week, a critical contributing factor to burnout.

Keeping a closer eye on the number of hours your team is spending at the office or online can help you better distribute work across the workforce and support employees who are regularly working overtime.

Employers bear some responsibility for their employees’ mental health, making mental health insurance and mindfulness tools worthwhile investments for your agency to consider. Gen Z employees, who are entering the workforce in droves, place an exceptionally high value on mental health, with 23% ranking mental health benefits as the top benefit that would make them stay at a company. 

Invest in initiatives that support team well-being and work-life balance, such as mental health and diversity training, and commit to creating a fun and inspiring work environment with regular socials and opportunities for staff to their hair down.

Lack of flexibility

The problem: In the wake of the global pandemic, many more employees are requesting flexible working set-ups, which can include non-traditional hours or working-from-home arrangements. In fact, a huge 83% of US workers want a four-day workweek.

The pandemic highlighted the benefits of alternative work arrangements, whereas flexible arrangements were previously reserved for parents or caregivers. Plus, flexibility in work hours and scheduling is cited by all demographics as an important factor that would make them stay long-term at an organization.

The solution: What your agency can offer your staff depends on several factors, such as your location and your clients’ working hours. Still, flexible or hybrid working arrangements are becoming increasingly popular in agencies.

There are dozens of flexible options to try, from four-day workweeks and condensed hours to hybrid setups and fully remote teams. 

Poor management

The problem: We’ve all had a bad manager. If you haven’t, lucky you! Our managers greatly influence our work experience, with working relationships between employees and managers contributing to 70% of the variance in team engagement. 

There’s a saying that ‘employees don’t leave companies, they leave managers.’ This is actually supported by evidence; a Gallup survey found that employees need more than a 20% pay rise to take them away from engaging managers, compared to the pennies it takes to lure away disengaged workers. Disengagement, which often leads to boreout and ‘quiet quitting,’ can happen for many reasons, including lousy support, discrimination, bullying, and simple inefficient leadership. 

The solution: Some employee-manager relationships won’t work out because of personality clashes — that’s OK. But when the same issues come up time and time again, it’s obvious there’s a more significant problem to solve.

There are many ways your agency can combat poor management:

  • Implement management training for anyone with a subordinate
  • Provide opportunities for employees to give feedback on their manager with 360 reviews
  • Develop a supportive environment that encourages transparency and accountability
  • Hire a consultant to review your agency’s management frameworks and ways of working.

How to decrease employee turnover with Forecast

Creating a positive work environment takes time and consistency. Large organizational changes may need to be made, such as moving to a new office that facilitates better teamwork or a business-wide pay review. While this isn’t easy, it’s worth the investment.

We’ve learned that employees, including digital marketing agency employees and beyond, want to feel supported. While you can never stop everyone from leaving (nor should you want to), making investments that will make your team feel happier, motivated, and valued will go a long way to increasing retention and reducing turnover.

With Forecast's agency management platform, you can understand the inner workings of your agency, allowing you to make continual operational improvements across the board. From preventing burnout by divvying up work more evenly to increased transparency with detailed reporting, we have all the tools you need to look after your team and nurture your best talent.

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