Staff retention in a recession?  Give them more holidays (and a pay cut too!)

A fascinating interview with Sir John Hegarty, Chairman of a famous advertising agency, highlights some creative ways in which a service sector business can handle the need to cut operating costs, but also retain its key staff.

The interview is here in the media section of the Independent.

The challeng facing management and staff at ad agency Bartle Bogle Hegarty is how to respond to the dramatic drop in advertising spending? The media sector is experiencing significant redundancies, since bar far the biggest operating cost of an ad agency is the people employed (with the expensive office buildings next).

Put to the vote, the proposal to take an across-the-board 3.5% pay cut was accepted by 99% of staff. The upside? Each staff member now also gets an extra day off every month - an intangible benefit that has been well received by staff. Sounds like a sound strategy to me - everyone shares the pain…and the gain.

The final few paragraphs are also interesting from a business studies perspective - particularly product branding and advertising. Sir John comments on some of BBH’s famous advertising campaigns.

I love his comment about Lynx deodorant. Anyone who has seen the latest adverts for the “pocket pulling power” offered by the Lynx Bullet might be forgiven for thinking that the product is aimed at late teenagers / early twentysomethings? No so. As with all Lynx advertising, Sir John admits that:

“The target age for Lynx is always 14,15 and 16, and we never forget that”