The rising cost of living, impending recession and economic instability is at the forefront of many conversations across the industry worldwide and should be front-of-mind for any leader looking to retain and motivate their teams.
Financial experts warn of a possible recession coming, with chances increasing as we head into 2023. The rise in commodity prices connected to the war in Ukraine has exacerbated the cost of living crises. While many are already feeling the pinch, it’s estimated hundreds of millions of people across the globe will face tough times in the mid-term.
We recently covered the issue of the rising cost of living and impact on talent in the article Money, Money, Money in a Talent’s World authored by one of our founders, Juliet Timms. Since then, we’ve been in conversations with senior leaders on the topic about what many are predicting to be difficult times ahead and how they can best support their teams. We’ve collated the responses and hope you find their insights useful.
1.The rising cost of living is likely to affect most industries in the short and mid-term. What is your personal or professional outlook for 2022 and what do you think will be the impact of this in 2023 for our marketing and communications industry, if any?
“It’s a real patchwork across EMEA with some markets impacted more than others. But, the above challenges for the marketing and communications industry are exacerbated by the ongoing trend of TV inflation in the region. Declining audiences, coupled with consolidation on the supply side all lead to double digit inflation in a number of markets, which is causing further pressure on marketers’ budgets. Agencies and brands are pushing for smarter value measurement metrics in digital channels to accelerate their digitisation across the region. Modest growth of between 0.5-5% is still expected in most mature markets in the region.
Christian Johansen, CEO, EMEA at IPG Mediabrands
On the other side of the globe, Nicole McMillan, General Manager, Marketing at Carlton & United Breweries in Australia, observes “Rising interest rates will at some point in early 2023 start to bite and I do believe consumers won’t be able to ignore the hourly news updates on inflation and the impact on their discretionary spend.” McMillan believes that some categories will be more affected than others as people decide what is essential vs. non-essential when it comes to goods and services. A further observation from Australia is that companies are seeing their costs rising substantially and are passing on aggressive pricing to end users to protect profit. Shareholders will not accept less profit. However, in many industries even aggressive pricing will not mitigate the level of inflation they are experiencing. “This is where the impact will be on marketing and communications as many companies will cut what is easiest from the P&L first – the advertising and promotions line and they will look to do more with less, they may even in-house some areas they may have previously outsourced.
Back in EMEA, Mark Evans, Managing Director at Direct Line Group, highlights the importance of a strong value proposition to customers. “Our cost-of-living playbook is not radical, we will keep building the brand, but respect that more customers will need help from a customer service support and finance point of view, and we need to make sure we have the right value propositions for our customers across our portfolio. “Our purpose is to be a force for good and this is a moment when clients and employees alike are receptive to this message.”
Mylene Ong, Head of Digital Sales and Marketing, Citibank Singapore adds her perspective from Southeast Asia. She observes that perhaps now more than ever, employers need to have compelling and forward-looking employee propositions to attract and retain talent. “It’s inevitable that people are re-evaluating their priorities and searching for meaning and purpose. This is amplified by the massive digital transformation taking place across the marketing industry, where marketers must keep pace with the relentless surge of new digital capabilities, new channels and changing customer expectations. Marketers want to know how to remain relevant in this modern marketing world. Leaders can support their teams by helping them to recalibrate their career goals, putting in place the right upskilling programs, fostering confidence and the practical know-how to succeed in this data and technology driven world.”
2. In times of uncertainty, how should leaders support their teams to feel secure?
“The ‘hope factor’ is to invest in people, invest in talent development and upskilling and data, and digital and technology transformation programmes. Now is the right time to be innovating ahead of the next curve. Working on new business models within the company is a clear message to employees that the company is focused on growth and development.” Mark Evans, Managing Director at Direct Line Group
“During these times it’s more important than ever to show solidarity. Collective and united focus on challenges can be inspiring and bring a greater sense of meaning and purpose. For us, shoulder to shoulder management is important, underpinned by more frequent and open, candid communication. Ensuring that we are listening and responding in a timely manner to our teams to ensure they feel heard and consulted on issues that affect them is important, as is investing in the future today so that our teams feel that they are a part of an exciting journey.”
Christian Johansen, CEO EMEA, IPG Mediabrands
“The only option for leaders is to be as honest and transparent as they can be about the situation the company is facing. They should also look for ways in which they can help ease the burden of costs – for example if their team members have expensive commutes to the office can they reduce their need to be in the office so many days. They should also make sure there are Employee Assistance programs in place where employees can access confidential services not only around mental health but also other stress pressure points such as managing personal finances.” Nicole McMillan, General Manager, Marketing at Carlton & United Breweries
3.Is your organisation taking any steps or implementing any initiatives to support employees?
While organisations such as Direct Line Group were able to grant their employees a 5% increase to help with the rising costs, others like Carlton & United Breweries already have a comprehensive Employee Assistance Programme in place.
Christian Johansen explains why they are taking an employee-centric approach to ensure both employees and company continue to learn and come out stronger. “Over the last few years, we have challenged how we’ve been working and have applied the learnings from the pandemic. We needed to ensure that the business and our people not only recovered from the effects of the pandemic, but also continued to thrive and lead in our industry. Our approach now is even more data driven than in previous years and we look at the entire employee experience to understand how we can create an environment in which all employees feel supported, empowered, and able to bring their best self to work. We are constantly reviewing our working practices in areas such as mental health and wellbeing (initiatives and support), diversity and inclusion (education, support and targets), the need for more flexibility (hybrid working, support for parents and care givers, work-life balance), and increased educational opportunities (critical thinking, developing better managers, training). We believe having an employee-centric approach results in a happier workforce and a more effective business.
4.What leadership trait do you think is needed to help retain your best talent, especially in tough times?
Team Spirit: Create the sense of belonging as the contact among team members and team dynamics have undergone fundamental changes with virtual working and the addition of rising costs. It’s no longer only what works for leaders but also what works for the team. Mark Evans, Managing Director at Direct Line Group
Being Present: Being present is vital to ensure teams feel connected and supported and to get recognition that the work they are doing is important. Everyone comes together one day a week to build and sustain that connection. Mark Evans, Managing Director at Direct Line Group
Authenticity and Integrity: If you don’t know, say you don’t know. If you can’t predict the future, then don’t. Be honest about what you can and can’t influence. Even if you can’t retain the talent based on the overall uncertainty in the business, the integrity you have demonstrated will hopefully be replicated to others in future. Nicole McMillan, General Manager at Marketing Carlton & United Breweries
‘Authentic Optimism’ Christian Johansen, CEO EMEA, IPG Mediabrands
Clarity: Have a clear vision and be able to rally the troops around it. Having a shared purpose gives meaning and extra impetus for the tough to get going. But equally give them an individual purpose to wanting to achieve their own objectives. Mylene Ong, Head of Digital, Sales and Marketing at Citi
If you’d like to talk more about retaining and building the very best teams in your business, please get in touch.