The number of staff an agency employs used to be a primary way to gauge an agency’s capabilities. While that still holds true to some extent, in the digital era and the gig economy, full-time staff headcount is less of an accurate metric of a marketing firm’s capacity.
When you’re performing an agency search, you may be including headcount as a factor. Perhaps you’re looking for a large agency for the perceived security or prestige of being with a big firm. Or maybe you’re seeking a small agency in the hopes of better intimacy with your brand and the people working with you to craft the creative. Large and small agencies both have advantages, but if you’re relying too heavily on headcount in your decision making, you may not make the best selection.
Defining what exactly a full service marketing agency is can have many facets. To be an agency, they’ll need to act as your agent, but ideally they should also be your partner. But how else is an agency defined?
When distilling the organizational structure down to it’s most basic parts, who makes an agency?
I’ve always subscribed to what I might call the yin-yang definition, and one way to see this played out across the industry is to look at the names of advertising and marketing firms. Like my own agency, many are comprised of two partner’s surnames. Rains | Birchard Marketing is at it’s core: Jon Rains, the creative side, and myself, Matt Birchard, the account side. Jon’s the yin to my yang, or vice versa. I’m the left-brained, logical side of things and Jon’s the right-brained, creative side. For an agency to be successful, you really need both. In many practical senses, the two of us alone can provide full service marketing to clients; from strategy, planning, and project management, to concepts, design and production. Granted, our capacity will be limited by our personal bandwidth. But, that may work just fine if we’re the right fit for our clients and the relationship is a mutually beneficial partnership.
It would be difficult to service any client of size with only two people, so increasing capacity means one of several paths:
1. Hiring full-time staff members. This is the traditional, tried and true way of building a business where staff is put on payroll, paid a salary for hours they put in, and the business owner then hopes to wring as much productivity and profitability out of each person. Full-time staff have a lot of advantages including helping to create an agency culture, retaining institutional knowledge, client familiarity, consistency in processes, and dependable on-demand availability. There are some drawbacks too, though generally the benefits have been viewed to outweigh the drawbacks. The primary drawbacks I’ve heard mentioned are that with a set staff, the agency will have a fairly fixed bandwidth and creative offering. The counterpoint to this is that it may allow the agency to specialize in one aspect or another of marketing services. But in general, if an agency has staff occupying desks in their office, there’s available creative or strategic capacity the agency can sell to its clients. More staff means more capacity and it’s a mostly linear growth path. If an agency wins a big new piece of business, they may be either overworked or need to go on a hiring spree to add the capacity they’re lacking. Conversely, if an agency loses a significant client, layoffs may be imminent.
2. Brokering work with freelancers. I’ve seen anecdotally a trend of agencies being comprised of just the principals and no one else on payroll. All of the actual work is done by a network of freelancers that the principals manage. In-house capabilities may be very limited, and some agencies like this feel more like sales organizations – seeking out clients with a specific need and then simply making a margin on having that need fulfilled by a freelancer. This structure can definitely have advantages for the agency principals in reducing or nearly eliminating overhead and allowing flexibility in the volume of projects they undertake, but benefits of full-time staff are typically lacking. From a client perspective, there may be a sense of inconsistency in the creative offered by the agency, but account service is typically handled by an agency principal, so the client’s point of contact is typically solid. The challenge that agencies structured this way must master is the ability to have multiple resources for any one skill set. If, for instance, the agency’s go-to video editor takes on another project and has no available time for them, then they’ll need a backup plan. There’s little recourse with freelancers when it comes to being unavailable. This can be mitigated by bringing some freelancers on contract with the agency, but that moves into the third path of growth.
3. Core full-time staff with an extended network of freelancers, contractors and partners. Honestly, this is the path that most agencies are on, consciously or not. I’d also argue this is far and away the most common agency structure. It’s the best mix of benefits from each of the other paths. You get culture and consistency from employees that show up to work everyday and can add to them the best freelance or contract resources when required. When the agency lands a new account, or an existing client launches into a big new project, the agency can tap their extended network to help manage the workload or bring specialized resources to the table. As an example, my agency does this commonly with video capture resources. Depending upon client and project need, we have a go-to group of professional videographers who are either best-suited for broadcast work, great drone pilots, or good for live events. Our individual clients may only need live video services once in a blue moon, but with enough ongoing work from a roster of clients, we’ve had the opportunity to find, vet, and work successfully with freelancers we can trust and who are good creative collaborators. We use our extended network because we don’t have enough live video work where we need to hire someone full-time for this. But, I know some agencies that do employ full-time videographers and photographers on staff.
This blended approach has become much easier to manage and seamlessly implement with the commonplace use of technology as tools. The rise of the gig economy has provided creative people the opportunity to find work across a much larger area than ten years ago. Agencies have responded by being able to work with more freelancers and partners, further afield if needed, and ultimately clients benefit from optimized resources working on their projects.
So getting back to the question at hand, when does headcount matter for selecting a full service marketing agency? In short, I think the right number is whatever number makes you, the client comfortable. Potential agencies you’re engaging with shouldn’t bite off more than they can chew and over-promise service. However, every case is different and the allocation of agency resources to any one client depends upon the client’s overall needs. Headcount at an agency matters, but it’s likely to be far from the deciding factor in agency selection. Depending upon how the agency is structured, you may find equal levels of support from a five person firm as you would from a 15 person firm, or perhaps even a 100 person firm. Select an agency that’s a good fit for you creatively and who you have chemistry with in person. Trust what you’re told before you hire the firm, and hold them accountable to what they promised once you’ve begun working together. So, fight the urge to automatically think that a particular firm is too big for you, or too small. Find out instead how important your work would be to the agency, and how they would support you. That, in my opinion, is a better metric of how well you’d be served than simply picking based upon the number of employees.