The rising salary demands of agency employees

With labor costs usually accounting for the largest share of agency expenses, it is no surprise that owners are particularly sensitive to any indication that salaries might be creeping up.   Recent conversations that Chip and Gini have had with agency leaders suggest that both prospective hires and current employees are asking for much higher salaries than many owners feel comfortable paying.   In this episode, Chip and Gini talk about why salary expectations are on the rise and what agencies can — and should — do about it.   Often the problem is that agencies have held their own rates steady even as salaries have increased, effectively reducing the firm's profits. Paying more without charging more is a recipe for disaster.   Beyond that, agency owners need to understand the realities of the current labor market and ensure that their expectations are reasonable and not based on their own recollections of what they might have earned in similar roles 10 or 20 years ago.