Curious from agency leaders, what’s the better strategy? Pay cuts/long term salary freezes, but limiting layoffs as much as possible VS. having furloughs/layoffs and being able to provide promotion and raise opportunities.

I’ve experienced both at different agencies, and have been saved and burned by both sides. Would love to know everyone’s thoughts!

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The better strategy is pushing for growth over margin.

Both or your options centre around margin and cost cutting. Very unsustainable business strategy.

Agency leaders should be pushing for new business and making their team members feel as if they can play a key role in the businesses survival.

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Interesting! So the answer is, neither? Keep everything as-is and pitch? Seems like at some point that would also be unsustainable. Thoughts?

It seems contradictory, but layoffs + promotions is almost always the better route.

Done correctly, the lay-off will be temporarily painful but will fix the fundamental financial situation of staffing levels needing to be commensurate with revenue. The remaining staff can feel secure that they’re safe (unless there are more account losses) and top talent will stay if they see a path for salary and title growth.

Delaying the inevitable keeps the entire staff on edge and looking, knowing that there will eventually be cuts made. Top talent will leave, mediocre talent will stay, the financial situation will compound each day and morale will sink, making it harder to compete and win new business.

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Thanks for weighing in! I totally agree, I think a lot of people at my company are starting to feel the fatigue of the painful trickle of layoffs. Nobody feels secure. Nobody is getting raises or promotions. Everyone is ready to jump ship. Feels like the “rip the bandaid” approach might have been a better long term strategy.

C1 - you forgot - 🎤mic drop at the end.. otherwise nailed it

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My bad.

Best is the combo. Business challenges are a great time to cut deadweight and it’s way easier lay-off poor performers than it is to fire them. Like barnacles slowing down your boat. All they do is hurt everyone else so it’s always great to have the opportunity to get rid of them.

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Yeah that happens too of course. Politics are always a thing.

You’re wrong about the other piece though. Most successful companies are extremely aggressive about firing poor performers - way more so than agencies.

Especially services firms, where talent is everything.

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