The Institute for the Practitioners in Advertising (IPA) has laid out the impact of the Covid-19 pandemic on UK advertising agencies, revealing an overall decline in staff numbers with women, the old and the young hit hardest.
The figures, drawn from 132 UK ad agencies, also revealed an uptick in the number of employees from non-white backgrounds employed in adland. However, the data showed an ethnicity pay gap and a failure from ad agencies to meet the 2020 diversity targets set four years ago by the IPA.
The Drum breaks down the data below.
Covid-19 has seriously impacted agency employment levels
Staff numbers at UK agencies have been seriously impacted by Covid-19. Overall, IPA members saw headcounts fall 10.8% from 24,866 in 2019 to 22,188 in 2020.
In creative and other media non-media agencies numbers fell by 9.0% from 13,509 in 2019 to 12,298 in 2020, while the number of employees in media agencies fell by 12.1% from 11,357 to 9,980, showing a disparity between traditional ad shops and their media counterparts.
Agencies said just over a quarter (25.3%) of employee departures came as a direct result of the Covid-19 pandemic. This figure was higher in creative and other non-media at 30.6% than in their media agency counterparts at 19.6%.
Women, the elderly and the young have been hit hardest…
The number of males employed in member agencies fell by 8.1% year-on–year from 11,700 to 10,752, while the number of females employed fell by 12.8% from 13,088 to 11,411.
The overall number of individuals working in their agencies in a part-time role fell by 23.2% to 1,240 from the 1,615 recorded in 2019. The number of females in a part-time role fell by 24.5% from 1,373 to 1,037, while the number of males in a part-time role fell by 15.1% from 238 to 202.
In addition to this, the number of women in C-suite positions fell from 34.0% in 2019 to 32.4%. In creative and other non-media agencies, this figure was 32.1%, down from 33.2% in 2019, while in their media agency counterparts it was slightly higher at 32.8%, down from 35.8% in 2019.
...young people and older staff were also affected
The number of those aged under 25 employed in member agencies declined by 29.4% from the 4,592 recorded in 2019 to 3,243 in 2020. The 1,349 departures accounted for more than 50% of the total decline in employee numbers (2,678).
While the numbers of employees over 60 in the industry are comparatively smaller, this age bracket also saw a significant fall of 22.1% from 240 to 187 year-on-year.
The average employee age in a media agency is 32 years old, compared to an average of 36.4 years in creative and other non-media agencies.
The level of ethnic diversity in member agencies has increased
Following on from commitments ringing loud across the industry to tackle ethnic inequality, the number of employees from a non-white background is now estimated at 15.3%, up from the 13.7% recorded in 2019.
Each of the seniority bands used in the survey have year-on-year increases in non-white representation with numbers highest at junior levels at 21.9% (up from 17.7% in 2019).
At the C-Suite level (which comprises jobs like chair, chief executive and managing director) 6.4% of roles are now occupied by individuals from a non-white background – up from 4.7% in 2019.
However, the ethnicity pay gap is real
For the first time ever, the IPA Agency Census measured pay gaps based on ethnic diversity and gender.
Among respondents providing salary breakdowns by seniority and ethnic background, an ethnicity pay gap of 19.5% in favour of those from a white background was recorded.
This stands at 16.2% in creative and other non-media agencies and 21.2% in media agencies. At 21.8% the ethnicity pay gap is higher in agencies with more than 200 employees than it is in their smaller counterparts where it stands at 13.6%.
On the gender front, a gap of 22.7% in favour of men exists (down slightly from the 24.4% gap recorded in 2019).
At 25.8% the gender pay gap is significantly higher in creative and other non-media agencies than it is in media agencies where it stands at 14.3%. At 26.8% the gender pay gap is higher in agencies with up to 200 employees than it is in their larger counterparts where it is 20.9%.
Ultimately, agencies are still failing to hit diversity targets set by the IPA
By 2020 the aim was for women in ad agencies to hold 40% of senior positions. Recently, the percentage of females in C-suite positions has fallen from 34.0% in 2019 to 32.4% in 2020.
This year, the IPA also wanted at least 15% of people in leadership positions to be from non-white backgrounds. At the C-suite level, 6.4% of roles are currently occupied by individuals from a non-white background, up from the 4.7% in 2019.
It also hoped that at least 25% of entry-level recruits should be Black, Asian and ethnic minority (BAME) individuals. In 2020 this level stands at 21.9%, up from 17.7 in 2019.
Says IPA president Julian Douglas: “The pandemic has hit all areas of our lives, and sadly but unsurprisingly our jobs, as this latest IPA Census reveals. With the exception of numbers of people from non-white backgrounds increasing in spite of overall numbers falling, the impact of the pandemic has exaggerated some existing negative trends.
“Talent is equally distributed, opportunity isn't. Now is the time to turn the industry's good intentions into meaningful actions.”
To address and progress the levels of diversity and inclusivity within the agency community, the IPA has a full program in place.
Key highlights include the iList, its work with the UK UN Unstereotype Alliance, and a newly published ‘A Future of Fairness’ report; a series of opinions from industry leaders and interspersed with current industry best practice. The free publication supports the new IPA ‘Diversity and Inclusion Essentials’ certificate.
This year the IPA has also joined forces with the Advertising Association (AA) and Isba to deliver the first industry-wide (agency, advertiser and media owner) diversity and inclusion staff survey, under a new campaign that launched last week called 'All In'.