Why you should never take the butter out of the pastry...

A refreshing, if unsurprising admission from WPP PLC last week that cost-cutting in the form of tight salary control had been a mistake. The FD admitted to shareholders that the group had not been "sensible" by holding salaries and bonuses "tight" to inflation for a number of years.

This news came in the same week that Patisserie Valerie admitted it’s management had been so focused on cost cutting they started using margarine instead of butter in their puff pastry.

Unsurprisingly, the tiny, almost imperceptible dissatisfaction felt by customers biting into their croissant, added up to a crisis across the business, and eventual administration.

And WPP fell into a similar trap. WPP’s product is its (often outstanding) people. Restricting their ability to feel valued, and to reward and value those who reported to them, demotivated its best performers and meant they lost a lot of good people to competitors.

We talk to our clients everyday about brand building – investing the majority of budget in long term messaging that creates emotional connections that lead to greater profit return over time. It’s vital we in the media industry maintain the same long term view in our people investment.

That’s why at Republic of Media we’ve given above inflation pay rises and bonuses to our team every single year since we opened. It's resulted in 95%+ staff retention and better work.

Our profit margins may be lower than the agency groups would accept, but happy, motivated and valued staff are the butter in the puff pastry for our clients.