Agency chiefs ‘must galvanise teams’ as pay gaps widen

UK agency leaders are being urged to “galvanise their teams to take an inclusive approach” following new figures which reveal gender and ethnicity pay gaps are widening as the Don Drapers of adland continue to cling on to power.

First the good news; according to the 2024 IPA Agency Census, now in its 65th year, total employee numbers within IPA member agencies as of September 1 2024, totalled 26,787, up from 26,630 recorded in 2023.

Breaking this overall figure down by agency type, the number of employees in creative and other non-media agencies has increased from an estimated 14,698 in 2023 to 14,775 in 2024, and the number of employees in media agencies increased from an estimated 11,932 in 2023, to 12,012 in 2024.

By gender, males account for 43.6% of the total employed base while females account for 55.6%. The number of males working in member agencies decreased year-on-year from an estimated 11,883 in 2023 to 11,676 in 2024, while the number of females increased from 14,557 to 14,888 over the same time period.

And given the ecomonic turbulence, it is perhaps not too surprising that there was a reduction in staff turnover as employees hung on to their jobs.

In fact, total staff turnover over the 12-month period was an estimated 24.1%, down from 31.2% in 2023 and down from 29.7% to 21.2% after redundancies are excluded.

Total staff turnover in creative and other non-media agencies was an estimated 24.9%, down from 31.5% in 2023 and down from 29.3% to 20.8% after redundancies are excluded. Meanwhile, total staff turnover in media agencies was an estimated 23.2%, down from the 30.8% reported in 2023 and down from 30% to 21.7% after redundancies are excluded.

Newly reported this year, there are 1,149 open vacancies within the IPA agency base with 561 jobs available in creative agencies and 588 in media agencies.

Meanwhile, females account for 39.9% of individuals in C-suite roles, up from 37.9% in 2023. Females occupy 39% of C-suite roles in creative and other non-media agencies, up from 38% in 2023, and 41% in their media agency counterparts, up from 37.7% in 2023.

Now the not so good news. The 2024 Census reveals a continuing age shift within member agencies, with younger employees (25 and under) decreasing in number and older employees (31 and over) on the rise. Reflecting this, the average age of employees has increased from 34.6 years in 2023 to 35.2 years in 2024.

However, the overall level of ethnic diversity in member agencies has increased, albeit marginally.

Some 23.9% of employees are from a non-white background, up from the 23.3% reported in 2023. In creative agencies, 22.6% of employees are from a non-white background, up from 21.6% in 2023, while in media agencies the figure is slightly higher, at 26% up from 25.5% in 2023.

However, in terms of ethnicity by level of seniority, employees from a non-white background account for 10.5% of employees in C-suite roles, down marginally on the 11% reported in 2023.

At the other end of the seniority spectrum, in creative and other non-media agencies 27.8% of junior employees and executives are from a non-white background, while in media agencies this figure is 41.1%.

Now for the even worse news. Among agencies that provided a breakdown of their employees by gender, seniority and salaries paid, males accounted for 43.9% of employees and 49.3% of salaries, while females accounted for 56.1% of employees and 50.7% of salaries.

The size of the gender pay gap, in favour of males, has increased from 15.2% in 2023 to 19.7% in 2024. The gap in creative and other non-media agencies is 19.9% and in media agencies is 19.7%.

Among those agencies providing full breakdowns of their employee base by ethnicity, seniority and salary level, employees from a white background accounted for 80% of employees and 85.3% of salaries, while non-white employees accounted for 20% of employees and 14.7% of salaries.

There is an ethnicity pay gap of 31%, which is higher than the 21.6% reported in 2023. At 32.7%, the ethnicity pay gap is higher in media agencies than it is in creative and other non-media agencies, where it stands at 26.5%.

When it comes to working from home, it seems WPP’s demand for a mass return to the office is not being replicated elsewhere, although given that this survey was conducted in September, that might well have changed by now.

The vast majority of agencies indicated that they were continuing to use a hybrid approach to the working week. Just under two thirds of agencies (66.1%) indicated that they are using a 3-day office/2-day remote model for their workers, while a further 16.5% are using a 2-day office/3-day remote model.

Meanwhile, only 5% of agencies indicated that employees were in the office 4 days a week and 2.5% of agencies indicated that employees were in the office five days a week.

In terms of attracting young talent to the industry, it seems there is more work to be done, with just over half (52%) of responding agencies indicating that they pay funds into the Government-operated Apprenticeship Levy.

However, less than a quarter (22%) of Levy funds paid by member agencies were used to fund apprenticeship training. This means that £5.6m in Levy Funds is going unspent by the industry.

Naturally, IPA director Paul Bainsfair is keen to focus on the positives. He said: “It is good to see that, despite tough trading conditions for UK plc, the overall number of employees working within IPA agencies has continued to grow this year and that staff turnover has reduced considerably.

“It is also welcome news that the percentage of women in C-suite positions also continues its positive trajectory, and that the proportion of women and people from a non-white background entering the business is strong.

“We are, however, seeing that there are areas where more focus could be applied to improve the diversity and inclusivity of our business; particularly with regard to ensuring the progression of people from non-white backgrounds and women up the ladder, which will in turn help to reduce the ethnicity and gender pay gaps.”

IPA director of diversity and inclusion Leila Siddiqi, however, is far more blunt in her assessment. She commented: “This year’s Census findings show that there continues to be a lack of progress in terms of the progression and remuneration of ethnically diverse talent, and the remuneration of women.

“The pay gap is one of the measures we can use to tell us whether or not the efforts we are making in this area are having a tangible impact. It may be that extra attention needs to be given to the areas of fair pay, ensuring equal opportunity and reward for all.”

Even so, Siddiqi added: “The data also shows us that overall staff turnover has fallen year-on-year. This could potentially result in higher levels of trust and loyalty in the workplace if there is more of a two-way conversation between employers and staff about preferred ways of working.

“Bold leaders who have the foresight to be transparent and galvanise their teams to take an inclusive approach after taking a good look at what their data is telling them are likely to emerge as trailblazers with future-ready agencies.”

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