WASHINGTON, DC-Leading independent public relations firms are creating a variety of“long-term investment plans” to incentivize and retain their key people. Attendees at the Entrepreneurs' Forum in Washington, DC-part of the PRovokeGlobal summit-heard that such plans are particularly important for firms working toward a liquidity event but can also ensure that senior people are aligned around financial goals.
At a session on“Best Practices to Attract and Retain Top Talent,” sponsored by Davis & Gilbert, the firm's partner and co-chair, corporate and transactions Brad Schwartzberg explained that many firms had traditionally relied on a combination of salary and bonus when it came to compensating senior people, but that many of the more successful firms D&G works with now offer either equity or a long-term investment plan.
“The incentives can be anything, from revenue to margin to new business development to client diversification,” he said.“It typically creates extra cash to be spread around to incentivize the kind of behaviors you need. If you spread it out over a number of years it is also a retention device-beyond salary and bonus.”
Philip Nardone, president and CEO of independent public relations firm PAN Communications, said his firm offered both a long term investment plan and a capital appreciation plan,“which have been extremely valuable,” adding that those plans had been successful in retaining and incentivizing senior managers-with a particular eye on a future liquidity event.
Carol Carrubba, principal of Highwire PR, which last year completed a deal with a private equity firm , explained the benefits:“Prior to the transaction we always tried to align our most senior leaders, VP and above, to a very core set of goals, revenue and EBITDA, new business, client retention and more. We also created a phantom equity pool. It was a great way to keep engaged the core leaders we really wanted to grow with.”
The conversation took place against a backdrop of challenging times for PR agency owners, quantified in the most recent Davis & Gilbert/PRovoke Media survey . In particular, agencies are paying more in staff salaries this year, with 36% spending 60% of net revenue on salaries, up from 28% in 2022 and 2021. Managing out weaker performers (66%) and hiring freelancers (45%) and layoffs (26%) were the most common actions agencies have taken to right-size staff.
Firms also, however, took actions to retain staff, the most popular being creating more flexible working arrangements; increasing professional development opportunities; rolling out mental health initiatives; making one-time salary corrects; and expanding employee benefits.
While long term investment plans were seen as important, much of the discussion revolved around the“softer” side of people management, starting with training and career mapping.
“We are really, really focused on training, from intern programs all the way up to our senior leadership, with managers and mentors helping people get the most out of their career journey,” said Carnubba.“And we are very values driven and measure ourselves against those values every quarter. And we have made a commitment to diversity and inclusion from our beginnings as a women-founded agency.”
Said Nardone,“Every employee at PAN has 90-day period of onboarding and acclimating and every employee has a dedicated career coach. That's essential. We also have a program called 'high-flex plus' where people can work for PAN from anywhere. We embrace people working remotely and that's been crucial in attracting and retaining people.”
That prompted a question from Schwartzberg about the balance between giving people the freedom to work from home while maintaining a strong culture and encouraging collaboration.
Nardone said that most PR agency owners are“people first” in the way they approach the business.“We are all looking for ways to motivate our people. We have five geographic regions and we have managers in each of those areas, and we have meet ups that could be training sessions or trivia nights at a local bar. And we have client meeting and new business meetings and they keep our culture alive. But our whole model is built on flexibility and that works for us.”
Carrubba said Highwire had been more proactive in encouraging people to return to the office.
“We did a lot of surveying and discussing about when we asked people back to the office and being clear about the role the office plays,” she said.“We felt culture, collaboration and clients were the reasons to come back. We created a program that we positioned as an opportunity to learn and grow and change, and we invited people to come back two days a week. Some people were enthusiastic and some were hesitant.
“We do track people coming into the office and we have conversations-not in a punitive way-about all the things they might be missing.
Jenn Duggan, president of Canada – Ontario & West for Citizen Relations, meanwhile, stressed a holistic approach to talent management.“We understand that people show up at work every day as a human being,” she said.“You're not just an employee, you show up as your whole self, and whether that means diversity and inclusion or people being young parents, we do what we can to support that.”
Citizen recently released a“Connectivity Report,” which Duggan said was particularly relevant at a time when the US Surgeon General says there is an epidemic of loneliness.“We have found this desire to connect more. The biggest barrier to it is mental health. People feel lonely in larger groups. Or they don't feel they can show up as their true self.”
It's important, she says, to understand that there are benefits to both remote work and sharing office time.
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