How to Fix Your Agency's Low Morale Problem

As an agency leader, do you have a plan for what you’d do if 30-50% of your employees quit?

You might be at risk right now, according to the latest Campaign US survey on agency employee morale.

To summarize from this recent HubSpot article on the growing agency morale problem:

• Nearly half of all agency employees report having "low" or "dangerously low" morale in 2016 -- up from one-third in 2015.
• Roughly 30% of agency employees are actively looking for new jobs. (I venture that even more would leave if approached with a strong opportunity.)
• The top three causes of low morale were company leadership (73%), lack of advancement (45%), and dissatisfaction with work (38%).

Now that we know there’s a problem, how do we solve it?

The good news is that the top causes of low morale are primarily within your control -- so you can fix them at your agency.

How to Fix Your Agency's Low Morale Problem

1) Assess your own management and leadership skills.

As Manager Tools notes: "The definition of an Effective Manager is to achieve results while retaining your team members."

Be honest with yourself -- are you getting results and retaining your team? If you’re seeing only one of those (or neither), you probably have gaps as a leader and manager.

According to Glassdoor, a former agency owner spent most of his time at the race track instead of leading his agency. That’s not a good message for employee morale.

You may need to get perspective from someone outside your agency -- we often lack perspective on ourselves. You can reach out to a business partner, your romantic partner, a business coach, or a "frenemy" at another agency. But you have to make it safe for them to share honest feedback, or else you’re defeating the purpose.

Be aware that their perspective may hurt at first. In my first 360 review as a manager, current and past colleagues said I was good at getting things done… but not at making it fun for everyone else. That wasn’t fun to hear, but taking it to heart meant I could start improving.

2) Hire people to fill in your gaps as a leader.

Improving your weaknesses only goes so far. I believe managers should focus on maximizing their strengths, and then recruit others to balance out their weaknesses.

If you're great at sales and big-picture thinking, but you struggle with operations, you'll probably never become great at operations. And you’re also unlikely to enjoy operations anyway. Instead, hire a great operations person -- someone who excels at the things you don't enjoy.

If you're great at operations but struggle at people-related nuances, get help. At the very least, seek out insights from someone with better people skills before you roll-out an agency-wide initiative that might make people unhappy.

Reflect for a moment: What are your gaps as an agency leader? How might you ask current and future team members to help you fill those gaps?

3) Help your middle managers upgrade their management skills.

When I speak with front-line employees at agencies, I see a pattern of problems around middle management. Often, the executive leadership team is good at managing people -- but the middle managers aren't always as competent.

Part of the issue is usually the agency's fault. If you promote people who aren't ready to manage others, it's not surprising that your new managers will struggle. Give your middle managers the tools they need to succeed, and be ready to coach them on coaching their employees.

Don't assume they know what you’ve learned over the years. I share 31 tips for managers in my bookMade to Lead, but knowing is only the beginning -- people still need to practice management every day.

Find ways to observe your middle managers as they manage. Management is a "learn by doing" profession. You want to provide spot feedback (privately) to help people improve while situations are fresh.

4) Show employees how they fit into your agency's future.

When I do anonymous Employee Culture Surveys at agencies, I often get feedback that employees feel confident about their agency's future… but they're unclear how they fit into that future.

Alleviating employee stress around the future depends on your agency’s headcount and your growth plans. When an agency has 10 people, there’s not much room for promotions -- everyone’s doing a bit of everything, and it doesn’t make sense to have a large layer of middle managers. In contrast, a 50-person agency typically has plenty of room for employee advancement.

If you’re currently small and likely will be for the immediate future, be honest about your plans. Some people will choose to leave, but you can turn it into a controlled departure instead of a sudden departure.

If you’re growing, map out the future org chart and team structure. Identify where you’re going, and what the transition roles might look like. Then, speak with employees about the agency’s future, along with each person’s individual professional goals.

5) Commit to improving work/life balance.

Work/life balance was the key factor among high-morale employees in the Campaign US survey. Improving work/life balance won’t fix morale if you’re also a terrible manager, but it’s the next place to look once you’ve started to improve yourself.

How many hours are your employees working? According to my research on agency workloads via Inbound.org, most agency people are working less than 50 hours a week. A significant minority (23%) are working more than 60 hours a week, but that’s not the norm.

Apart from occasional spikes, long workweeks may be a sign that you’re understaffed, that people aren’t billing enough, or that you’re doing a bad job at project management.

Work/life balance is about flexibility, too. Are you focused on results… or expecting butts-in-seats facetime? The workweek can feel longer when employees feel unnecessarily chained to their desk.

6) Send (and act on) employee satisfaction surveys.

If you don’t know how your team is doing, it’s harder to improve. Keep in mind that perception is reality -- employee morale is about what employees think and feel, not what you think and feel as an agency leader.

Because I want my team to be happy, I regularly check-in to ask how things are going by sending a "satisfaction check-in." I ask team members the following five questions to find out how happy they are with their work, and what I can do better as a leader.

1. What's working?
2. What's not working?
3. What should I do differently?
4. Do you see any opportunities or gaps in the business that I am (or might be) missing?
5. Anything else you'd like to share?

Based on their answers, I can improve my leadership and management, as well as improve the business overall.

You can conduct simple employee surveys yourself, or you can use an employee engagement tool.

7) Invest in professional development.

Spending cash and time on professional development pays off in two ways. First, it helps employees improve their skills -- which means they’re better at helping your agency’s clients. Second, it shows employees you’re investing in their future -- whether they stay or go.

The right budget and time allocation will depend on your agency’s lifecycle. But regardless of the amount, I typically see a strong payoff for agencies.

Don’t forget to include management and leadership coaching. Once you equip your team with more skills and experience, it also makes it easier to promote from within -- which helps solve the "lack of advancement" morale problem.

8) Conduct (and act on) exit interviews.

Your best efforts won’t keep everyone -- and that's okay. It’s normal to have at least some employee turnover. (You might expect 10-25% annual employee turnover, depending on the size of your agency.)

When someone says they’re leaving, don’t try to convince them to stay -- they’ve already made up their mind. But you can use their experience to prevent other good team members from leaving.

Use exit interviews to find what you're doing wrong, and fix whatever the problem is as well as you can.

It’s important that you act on what you learn. If you tend to take things personally, you should delegate the exit interview process to another member of your leadership team.

Applying These Tactics at Your Agency

If you’ve observed an employee morale problem -- or suspect one is festering -- you can solve it.

To do this, you need to identify the underlying cause(s) and then take action. The solutions are often free or inexpensive, but they require you to commit to improving as a leader and a manager.

Don’t underestimate the time it will take to fix things -- some changes can happen immediately, but others can take months of consistent action, especially when it involves regaining employees’ trust.

Leadership development can feel painful at first, but it pays off with better employee retention and results. Ultimately, you’ll enjoy work more -- and you can see a higher payday if you ultimately choose to sell your agency.

What will you change first at your agency to boost employee morale? Let us know in the comments.