The latest Quarterly SAGA Small Agency Owner Survey paints a picture of cautious optimism among small agency owners. Despite ongoing economic pressures, agency leaders are finding ways to navigate challenges, prioritize their teams, and maintain an eye toward growth.
The Q4 survey, conducted October 31 to November 22, 2024 by the Small Agency Growth Alliance (SAGA), gathered insights from small agency owners, shedding light on their outlook, priorities, and pain points.
An Optimistic Outlook Amid Challenges
Agency owners expressed a moderately positive outlook for the next 12 months. The survey revealed an average satisfaction score of 6.94 out of 10—virtually unchanged from the previous quarter’s 6.88.
While this suggests that most agency owners are generally content with their businesses, it also highlights that a significant minority—about 20%—rate their satisfaction at five or below, signaling real concerns for some.
Encouragingly, a strong majority of respondents anticipate growth in revenue (71%) and profits (59%) in the year ahead. Perhaps most notably, only 1% expect to reduce their team size—a sharp drop from the 11% who shared similar concerns in Q3.
However, this optimism is tempered by hesitancy to expand staffing, with 65% planning to maintain their current headcount even as they foresee revenue increases.
Prioritizing Teams Over Personal Earnings
Each quarter, the SAGA Survey takes a deeper look at specific topics of interest to small agency leaders. This quarter, the survey delved into agency talent, compensation, and retention.
The survey reveals a clear commitment by owners to prioritize their teams, even at potential personal expense. Most respondents appear to pay reasonably competitive salaries, with the majority of full-time employees earning between $60,000 and $80,000 annually on average.
Over half of the surveyed agencies also reported having at least one non-owner employee earning $100,000 or more.
Most of the agency owners, however, are far less generous with their own compensation.
Nearly one in five owners don’t pay themselves a regular salary, opting instead to draw from profits as needed. Among those who do pay themselves, fewer than half reported earning six-figure salaries, and 39% acknowledged reducing their pay over the past year. This stands in stark contrast to the 43% of agencies that provided raises to employees, often matching or exceeding the size of raises given in the previous year.
Bonuses, too, reflected owners’ commitment to rewarding their teams. A substantial 57% of agencies offered bonuses to most or all employees, and just 14% that did so provided bonuses smaller than last year.
These findings highlight the sacrifices many agency owners are making to retain and motivate their teams in challenging times.
The Evolution of Work in Small Agencies
The rise of remote and hybrid work has fundamentally reshaped the way small agencies operate. According to the survey, 65% of respondents have fully embraced remote work, while the remaining 35% operate in hybrid models. No agency reported being fully office-based.
Among those with hybrid setups, approaches to managing in-office time vary widely, ranging from fixed schedules to employee-driven flexibility.
This shift to remote work aligns with a broader cultural evolution in small agencies. Most owners trust their employees to set their own work hours as long as they meet their deliverables. Only 25% enforce strict working hours across the team.
However, challenges remain: around 30% of agencies reported that employees work overtime at least monthly, with 13% indicating that this happens routinely.
Recruitment, Retention, and Talent Development
Talent acquisition remains a conservative process for small agencies. Over the past year, only 11% of respondents increased their headcount, while 33% reduced staffing levels.
When hiring, owners leaned heavily on personal networks and LinkedIn as the most effective recruitment channels.
Retention, however, continues to be a concern. Employees leaving small agencies tended to split evenly between agency and non-agency roles, with just 7% departing to work for a client.
Some owners noted difficulty in training junior employees and preparing mid-level staff for leadership roles. These issues underscore a broader challenge in developing talent pipelines within small agencies.
Balancing Optimism and Reality
The survey results provide a mix of hope and concern. While most agency owners remain optimistic about the future, their reluctance to expand headcount reflects a cautious approach to growth. At the same time, owners seem committed to investing in their current teams, even if it comes at the expense of their own financial well-being.
Real challenges face small agencies, but this survey suggests that owners are trying to maintain a positive outlook.
