I have a friend named Ted. Ted is an interactive programmer, designer, storyteller, animator, producer and director. Ted's now freelancing as a hotshot action scripter and Flash guru. He earns $240 an hour and has a two-month waiting list for his services. At least a dozen agency award statuettes have been forged with his code. Ted is a now an interactive god and he knows it.
I met Ted 16 years ago when I started in the interactive business and we were working on a small ($10k) CD-ROM gig. Even then, Ted was the best interactive director and animator in town (one of five). Ted was the guy you called when you needed to get people to click on a screen or animate a logo (he refused to add flames).
Ted was also scraping by on whatever money he could hustle while dumpster-diving for clothes and furniture. They called him a "waistoid" and a weirdo. I hired him at the time for a fair fee.
Now, Ted is a superstar and he won't work for me. I've asked.
The best digital talent with highly specialized experience and design skills is a small cadre of highly compensated, completely booked and unmanageable individuals who work for themselves. The difference between these folks and a hot film director is that they hold all the keys to the kingdom. They own all the technical knowledge, execution parameters, et cetera.
"Why work for the man when you can work for yourself?" they ask themselves. Fair enough.
But, we want him. In fact, we need him.
The battle has begun
Those of us caught up in the trenches of interactive marketing know that the war for talent is fierce. Who are we fighting against? The battle for talent is largely us against each other, a myriad of sexy startups, and Google and Yahoo!, of course.
Throw in the lure of freelancing for giant hourly fees, and you have a complex battleground and formidable enemies.
In the agency world, the demand for our services is on a sharp upward trajectory. Regardless of which interactive agency you talk to, we are all in the fortunate position of having more business opportunities flowing in than we can possibly handle. It's a blessing, of course. But, this isn't another bubble. Our biggest challenge is not in making questionable business models work or proving the value of the medium. It's about talent -- plain and simple.
After all, we don't sell widgets. Our industry is about people -- skills and ideas --and we are heading into a supply crisis, if we're not in it already. There is a relatively small group of highly prized talent that is either playing a game of musical chairs -- skipping from company to company -- or granting their contracting services to the highest bidder.
Agencies keep fighting with bigger and bigger guns (read: salaries), and employee compensation is beginning to eclipse billing rates. Eventually, the music is going to stop and this little game of musical chairs will end when agencies can no longer operate profitably.
Here's the industry's dirty little secret: the growth of wage inflation is outpacing fee increases. We need to be real with ourselves and with our hires; it is time to set fair expectations around salaries and promotions.
Here are five ways that we, as agencies, can fight back.
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