Why the ad industry rated least compassionate in handling layoffs

As the entire job market suffers soaring inflation rates and supply chain problems, dozens of employers across the advertising and media industry—including Snap, Patreon and Netflix—have begun laying off employees in advance of a looming economic recession. JobSage in July surveyed 1,000 U.S. employees who have been dismissed from their jobs to gain insight into the best and worst employer practices when it comes to handling layoffs. 

The JobSage survey involved employees from 11 different industries, including advertising and media, hospitality, technology and education. Of these industries, advertising and media had the largest number of respondents who reported callous treatment when being laid off—83%, or 18 percentage points above the overall average of 65% of respondents who felt their employer could have handled their layoff better. 

“I’ve worked in the marketing industry for almost 15 years now, and there’s always the theme that whenever there’s potential bad news in the economy, marketing and advertising is always one of the first things to be let go,”  said Matt Zajechowski, director of media relations at North Star Inbound, the marketing agency that commissioned the survey. “We’re seeing from this data that people are dealing with layoffs at a higher rate than some of the other industries and they’re not given notice about it. Definitely something to be a little bit alarmed about if you work in this industry, for sure.”

Fewer severance packages

Many of the survey questions surrounded the circumstances of the respondents’ layoff, including whether the employee received a severance package; whether they had any warning about the layoff ahead of time; and how they were informed they were being dismissed from their job. Of the 91 survey respondents representing advertising and media, only 17% were offered a severance package, lower than the 27% rate across all industries. Additionally, while 82% of respondents had no advance warning of their layoff, that number rose to 92% for advertising and media employees. 

Nearly half of respondents in advertising and media reported they “did not feel cared for at all” when being informed of their layoff, exceeding the overall 35% of respondents who felt their employer lacked compassion when dismissing them. Although many of the advertising and media employees had fewer than two years of experience in the industry when they were laid off, others said they had worked in the industry for up to 20 years when their company dismissed them. One in five respondents had worked in advertising and media for between five and 10 years, while almost 30% had more than 10 years of experience in the industry. 

The survey results also revealed some of the impact of the COVID-19 pandemic on how employees are dismissed from companies. Roughly 44% of the survey participants were laid off since the start of the pandemic, similar to the 43% of respondents from advertising and media. The settings for many of these layoffs were virtual, including virtual meetings (both group and individual), phone calls, emails and even messaging apps. Just over half of advertising and media employees were informed of their dismissal in person. But 85% of them said they preferred layoffs to be communicated in person—higher than the 77% average across industries. 

“[That data] tells me that more people are doing virtual layoffs [in advertising and media] than other industries,” Zajechowski said. “One of the big takeaways from this data, I would say, is that whenever it’s possible, communicate [layoffs] in person.”

Many respondents also requested time to ask questions about their layoff or receive feedback about their job performance, the survey found. On average, these employees said 15 to 30 minutes would be an ideal amount of time to speak with a manager or higher-up after being informed of their dismissal. Almost one in five respondents to the survey said they never had the opportunity to ask questions or discuss their layoff. 

A smooth transition

It’s nearly impossible for someone to have a completely positive experience when they’re being let go from a job, but agencies can soften the blow by handling layoffs with respect and compassion, said Nancy Hill, CEO of agency Marcus Thomas and the former president and CEO of 4A’s. She also serves as CEO of her self-owned consultancy, Media Sherpas, which works with agencies on issues such as talent development and growth opportunities. 

Agencies often resort to layoffs when they lose a major client or when the agency decides to alter the type of services it offers to better suit the needs of its clients, Hill said. Holding companies also have less flexibility to retain employees or provide robust severance pay because they’re subject to quarterly financial goals, she said. But while layoffs might be an unavoidable part of the industry, agencies should do as much as they can to help their former employees transition smoothly from the agency to their next job. 

“As an employer, you want to do the best you can for the people who have been working for you, and offer them as much financial relief as you can, but also guidance,” Hill said. “Possibly giving the ability to work with recruiters to find the next job. I’ve seen agencies who go out of their way to say, ‘Listen, we had to lay off 50 people here today. Here’s a list of what they do, and if anybody has jobs open, please come to them first.’”

Waiting isn't always best

Even in the face of economic downturns that may drive an agency to cut back on some of its employees (as a spate of agencies and other companies have recently), companies should always provide an adequate severance package at the bare minimum, Hill said. Agencies will often wait as long as possible to lay off employees out of compassion, but in the meantime, these companies run out of the financial resources needed to provide severance pay when they’re eventually forced to dismiss their employees. 

Laying off these employees earlier and offering them severance pay is much more compassionate than holding onto them for longer but “asking [them] to walk out the door and not have any income,” she said.

The majority of JobSage survey respondents overall indicated they would want at least two months of severance pay, but only 27% of employees surveyed actually received severance pay when they were laid off.