The agency landscape is undergoing major changes. Agency owners are facing increasing challenges from advancing AI technologies, changing consumer behaviours to sustainability being a key consideration and more, all requiring a new approach to resourcing our teams. Rising employment costs, staff shortages and a growing reliance on freelance talent are reshaping how agencies operate.
According to a recent study, by 2035, there will be more freelancers than traditional employees in the workforce. Additionally, 60% of executives predict a substantial shift toward independent workers in the next three years. This trend underscores the need for agencies to rethink how they structure their teams, while maintaining flexibility and efficiency.
In addition to a changing workforce, talent retention is becoming more difficult. With rising wages, employees demanding greater flexibility and benefits, agencies must now balance offering a competitive salary with long-term profitability.
The solution?
Strategic hiring, smarter outsourcing and a laser focus on productivity. In our latest article, we share some key strategies to help agency owners build teams that are both strong and agile, ensuring sustainable growth in an ever changing market.
1. Understand your true employment costs
Before making any team decisions, you need clarity on the full cost of employment. With the UK’s recent changes to Employers NI, in the October 24 budget, your payroll expenses might look very different this year.
ACTION: Start with the numbers. We’ve created a simple employment cost calculator to help you understand exactly how these changes affect your business. Click HERE to download it, plug in your team’s salaries and see the impact on your profit margins. It is important to get a clearer financial picture before hiring additional resource or restructuring.
2. Balance in-house and outsourced talent
One of the biggest cost drains for marketing and creative agencies is carrying full-time salaries, especially when taking account of the business seasonality and workload fluctuations. Instead of defaulting to full-time hires, consider a blended approach.
🔹Core team: Keep a lean, high-performing in-house team for essential functions, these might include your strategists, account managers and creative leads.
🔹Freelancers and contractors: Tap into specialists when needed (SEO, design, copywriting, media buying, etc). This blended approach will keep your payroll flexible and allow you to scale up or down as demand shifts.
🔹 Tech and automation: Invest in tools that automate repetitive tasks (finance, project management, reporting) instead of hiring extra admin staff. With advancing AI technologies, there are many new tools on the market. Start by defining where the resource gaps are and see if there is some tech to help.
ACTION: Audit your current team setup. Identify your critical resources and potential areas where contractors or automation could replace costly full-time roles.
3. Leverage outsourcing for cost efficiency and expertise
Outsourcing isn’t just about reducing costs, it’s about gaining access to industry specialists who can enhance efficiency and output quality. Instead of hiring in-house for every function, partner with companies that specialise in key areas, such as financial management, HR, or IT.
Benefits of outsourcing:
- Cost control: Reduce overhead costs by paying only for what you need.
- Industry expertise: Work with professionals who understand your sector and its unique challenges.
- Scalability: Quickly adapt to business needs without the long-term commitment of full-time hires.
By outsourcing critical functions, agencies can free up time to focus on business growth while ensuring financial sustainability. Proceed with caution though, by taking outsource resource, you may also lose some of the commitment and drive to grow the business.
ACTION: Identify repetitive or specialised tasks that can be outsourced and find a reliable partner to support those areas.
4. Get serious about team productivity and utilisation rates
Time tracking is a must. While there are different opinions on this, it has to become an essential part of the way agencies work. Tracking time spent on projects and client work, then calculating the utilisation rate, ensures that resources are allocated efficiently and that every hour contributes to profitability. A strong team isn’t just about headcount, it’s about efficiency. If your team is overworked or misaligned, you’re wasting money. Here’s how to fix it:
✅ Clear roles and responsibilities: Everyone on your team should know their priorities and KPIs. If tasks are getting stuck in bottlenecks, you may not need more people, you may just need better processes.
✅ Use the right project management tools: Platforms like Scoro, Accelo, or Float, can keep tasks on track and prevent inefficiencies.
✅ Encourage deep work: Minimise meetings and distractions. More work doesn’t mean more hours it means better focus.
ACTION: Do a time audit for your team this month. Ensure you review the data each month with the team and take steps towards improving staff utilisation rates.
5. Offer flexibility instead of higher salaries
Rising wages are a concern for any business, but many employees today value flexibility just as much, sometimes even more than a pay raise. To retain top talent without constantly increasing salaries, consider:
🔹 Remote and hybrid work solutions to help reduce office costs and attract talent outside expensive city hubs.
🔹 Performance-based incentives: Instead of across-the-board raises, reward performance with bonuses tied to agency success.
🔹 Better work-life balance: Extra days off, flexible schedules and mental health support can be just as enticing as a bigger paycheck.
ACTION: Survey your team to find out what non-monetary perks matter most to them – and build retention strategies around that.
6. Improve staff retention to reduce hiring costs
Retaining employees is far more cost-effective than constantly hiring and training new ones. High turnover not only drains resources but also affects team morale and client relationships.
How to improve retention:
- Offer professional development opportunities.
- Create clear career progression paths.
- Foster a positive workplace culture with strong leadership.
A strong retention strategy will keep your best talent engaged and prevent the constant churn that weakens agency performance.
ACTION: Implement at least one new retention-focused initiative this quarter, such as mentorship programs or offer additional training.
7. Know when to hire (and when not to)
This can be tricky to master. Many marketing agency owners rush to hire as soon as they land a big client or experience growth. But premature hiring can be a financial trap. Here’s how to hire smarter:
✅ Wait for 90-days of consistent growth: Don’t hire based on one big month, look for a pattern of sustained demand before expanding your team.
✅ Hire based on strengths, not gaps: Instead of filling gaps, build around your strengths. If your agency is great at strategy but weak in execution, hire implementers.
✅ Start with contractors, then convert to full-time: If a freelancer proves indispensable, then bring them on board permanently.
ACTION: Review your last three months of revenue before committing to any new hires. If growth is inconsistent, consider alternative solutions first. Take a look at this simple metric: Staff Cost/Fee income %. If it’s higher than 60%, you’ve got work to do!
Final thought: It’s time to work smarter
Agencies that survive and thrive through uncertain times are the ones that operate with lean teams, flexible structures and a laser focus on financial health. If you’re unsure where to start, this is where we can help. Start by downloading our “Employment Cost Calculator” to assess the impact of recent changes. Finally, book a free consultation with us to map out a tailored financial strategy for your team.Let’s make 2025 the year your agency works smarter, not harder.
