Corporate loyalty is dead. May it rest in peace.
Employers, having paid their respects, are now getting on with their lives, realizing that pension plans and gold watches no longer cut the mustard. Hard as it is to find great PR talent these days, it's even harder to keep top employees - particularly in a market where competitor offers lurk behind every corner.
While you can't control the siren songs of headhunters and competitors, you can control the climate of your own work environment. Today's top PR pros are expecting saner office conditions, coupled with financial incentives - preferably stock options.
No Stock? No Dice
While stock options have been corporate mainstays for some time, agencies have been slow to follow the trend. But this is starting to change, according to Betsy Berkhemer-Credaire, president of the L.A. recruiting firm Berkhemer/Clayton Inc. Agencies are now in a position where they have to adopt stock ownership plans, or leave themselves vulnerable to corporate counter-offers.
Edward Howard & Co., a Cleveland-based agency, offers a challenging environment and good benefits, according to Chairman Stan Ulchaker. But the linchpin of its employee retention strategy is its stock ownership plan. Virtually all staff on payroll are eligible to purchase company stock and to receive stock through year-end awards. The company currently has about 45 shareholders (out of 48 employees), Ulchaker says.
Aside from its obvious financial incentives, the stock plan turns employees into "stakeholders" - a significant distinction, according to Ulchaker, because it promotes accountability and nips employee apathy in the bud. Employee shareholders are privy to the agency's monthly and quarterly financial reports, and also are invited to attend the company's annual stockholders' meeting.
The results have proven positive. "We think [the program] encourages entrepreneurship at a relatively early stage of someone's career, and we think it has been a factor in our retention of senior people," Ulchaker says, noting the average tenure of account supervisors at his agency is close to 10 years. Only three senior staffers have left the agency this decade, one of whom retired, he says.
Ulchaker concedes the stock plan has been less effective in retaining junior staff - who, in the PR field, tend to switch jobs more frequently for a number of reasons.
While equity options have helped reduce staff turnover, "great salary and great benefits" still are not enough, according to Patrice Tanaka, president of Patrice Tanaka & Co., a 40-person New York agency. Her firm seeks to provide not only fulfilling and challenging work, but also "a quality of life...that seamlessly integrates [employees'] personal and professional obligations."
More than Money
Tanaka staffers have the latitude to set their own hours and to work outside of the office one or two days per week. In the comfort category, employees enjoy casual dress, a meditation room, and on-site massages sessions.
Family-friendly perks include liberal maternity leave policies for both men and women, and for both natural birth and adoption procedures. Women can take up to three months of paid maternity leave.
These approaches seem to be paying off. The agency experienced a modest turnover rate in 1998, losing 12 of 51 employees. So far in 1999, only three have left: two because they were moving out of New York, and one who was leaving the PR field entirely.
An employee's decision to stay or go is usually based on an amalgam of factors, and savvy companies know it. The corporate HR prescription du jour is to take a more holistic view of employees' work and personal lives.
Children's fashion and play product manufacturer Gymboree, Burlingame, Calif., offers a full plate of employee-friendly perks, including three-week vacations beginning at the time of hire, paid maternity and paternity leave, on-site daycare, stock options for all employees, flex-time and telecommuting privileges.
Money may not be the only recruitment and retention tool, but it still speaks the loudest. Gymboree saw the most dramatic drop in turnover rates in its stores (which employ 7,000 people) when it instituted stock options and a quarterly bonus program for all full-time and part-time employees at the start of 1999.
Ken Meyers, senior vice president of human resources, says that turnover rates for part-timers have been cut in half over the course of the past year. And those are bankable results.
(Berkhemer/Clayton, 213/621-2300; Patrice Tanaka & Co., 212/229-0500; Edward Howard, 216/781-2400; Gymboree, 650/696-7404.)