Morale among employees of U.S. public relations agency improved slightly for the second consecutive year in 2005, with more employees indicating a commitment to build their careers with their current agency, and more agreeing strongly that morale at their agency is high, according to the latest Holmes Report Best Agencies to Work For survey.

The survey, conducted over the first five weeks of the New Year, attracted a record number of responses—more than 4,500—from employees of close to 1,000 agencies, including almost all of the largest employers in the public relations industry. It will be used as the foundation of our ranking of the Best Agencies to Work for study, which will appear in next week’s newsletter.

Agency scores improved on 25 of the 46 dimensions we asked about; they were identical on three dimensions; and they declined on 16 dimensions. (Two of the dimensions we asked about were new to the survey this year).

What Employees Like and Dislike

Once again, clients were most likely to agree with positive statements related to their firm’s commitment to client service and ethics. For example, when we asked employees whether they agreed with the statement that “Client satisfaction is a top priority at my firm,” they overwhelmingly did. The industry answer was 9.25 on a scale of 1 to 10 (with one being complete disagreement and 10 being total agreement).

They also agreed strongly that their agencies provided equal opportunity to all, regardless of race, gender, or sexual orientation (9.17), that they and their colleagues were prepared to do whatever it took to get the job done for clients (9.14); that their firm dealt ethically with clients (9.08) and that their firm was respected within the industry (9.02).

And yet again, they reserved their lowest marks for issues related to compensation. The lowest score of all was for the statement, “In financial terms, I find my job rewarding,” for which the industry response was just 7.21 on a scale of 1 to 10.

Employees also expressed some disagreement when asked whether their firms did a good job of explaining all the career options open to them (7.33), whether they were fairly compensated for their contribution to the firm (7.33), whether their compensation was competitive with that offered by other agencies (7.40), and whether their agency had eliminated unnecessary bureaucracy (7.43).

The answers to the four compensation questions we asked suggest that firms are still not meeting the financial needs of employees (although most were quite satisfied with their health and other benefits). But the fact that there was such widespread disagreement with the statement “I believe my compensation is competitive with compensation at other agencies” suggests that the grass is not much greener elsewhere in the agency business.

There are, however, some areas of obvious concern for agency leaders, most notably professional development. In addition to the question about whether agencies explained all the career opportunities open to them (7.33, above), employees expressed concern about their satisfaction with the level of training provided (7.83), and awarded their agencies mediocre marks when asked if they were encouraged to develop new skills (8.29) and whether their immediate supervisor was more of a coach than a boss (8.35).

Agencies scored mixed results when it came to communications. Employees were moderately likely to agree that they understood their firms’ financial goals and their own roles in achieving them (8.26), and that that they understood their firms’ vision and strategy for achieving it (8.28), although a cynic might respond to the closeness of those two scores by asking whether at some firms the financial goals and the vision are the same thing.

But employees were likely to agree that management listened to what employees had to say (8.03) or that management made every effort to keep employees informed (7.96).

Perhaps an even more dramatic red flag concerns the nature of the work at many agencies. The industry scored low marks when employees were asked whether they felt like a partner to their clients rather than just an order-taker (8.14), whether clients treat account staff at all levels with respect (8.13), whether they believe the work they do is meaningful and worthwhile (8.13), and whether they found the work they did intellectually stimulating (8.08).

Employees Feel Better About Work-Life Balance

Agencies improved most dramatically on two of the most significant questions. The biggest improvement came when employees were asked whether morale at their firm was high (up 1.8 percent to 7.94), presumably a reflection of greater financial stability. But employees also indicated greater commitment to building their careers with their current agency (up 1.6 percent to 8.11).

Other areas where scores improved significantly included whether employees felt their firm was respected within the industry (up 1.6 percent to 9.02), and whether their firm had eliminated unnecessary bureaucracy (up 1 percent to 7.43).

But perhaps the most significant finding was that employees feel better able to balance work and life demands. While the overall score on this question was still among the lowest (7.71), there was a substantial improvement (1.4 percent).

On the other hand, there were troubling declines on some major dimensions: when employees were asked whether their firm had strong values, and lived them (down 3.7 percent to 8.35, the most dramatic change of any score in the survey); whether management listens to what employees have to say (down 2.9 percent to 8.03).

Perhaps the most troubling response involved the question of whether employees felt their agency was a fun place to work: down 1.9 percent to 8.18).

Getting Better with Age and Seniority

As a general rule, older employees with long tenure are more satisfied with their employers than their younger, less experienced counterparts—although the very youngest were somewhat more satisfied than their slightly older peers, and the very oldest were somewhat less satisfied than their slightly younger counterparts.

Satisfaction was lowest among those aged 27 to 31(7.79 when asked whether overall they found their jobs satisfying) and those with two to three years of tenure with their current agency (7.74).

Satisfaction was highest among those aged 46 to 51 (8.52) and those who had spent more than 10 years with their current agency (also 8.52).

Not surprisingly, there was an even more direct correlation between age and financial satisfaction. The youngest employees (aged 26 and under) were least likely to find their jobs rewarding in financial terms (6.40), while those aged 42-46 were most likely to be happy with their financial rewards (8.24)—although financial satisfaction appears to dip somewhat after age 46.

Those aged 27-41 felt least able to balance work and family demands effectively (7.46), while those aged 51 and over enjoyed the best work-life balance (8.22).

Gender Differences

On most issues, men—who made up just 29 percent of respondents—felt more favorably about their employers than women.

By far the biggest gender gap was on questions related to compensation. There was a 4.9 percent gap between men and women when they were asked whether in financial terms they found their job rewarding, a 4.4 percent gap when they asked whether they believed their compensation was competitive with that at other agencies, and a 3.3 percent gap when they were asked whether they were fairly compensated for their contribution to the firm.

Some of this gap can be explained by differences in age and tenure, which is to say that women tend to dominate most at the younger, more junior end of the spectrum: 82 percent of those aged 26 and under are women, but only 54 percent of those aged 51 and over. (This is, in and of itself, a problem, indicating the industry’s failure to keep female employees beyond a certain age.)

But the gender gap persists in all age groups.

On the other hand, women were slightly more likely than men to agree that their firms provided the same opportunity to all, regardless of race, gender, or sexual orientation.

Other areas where women were slightly more satisfied than men included dimensions related to client service (client satisfaction is a top priority at our firm, we do a good job of keeping clients informed, our people are prepared to do whatever it takes to get the job done) and dimensions related to people (I like the people I work most closely with, my agency does a good job of attracting high caliber employees, my agency does a good job of retaining high caliber employees). They were also more likely than men to agree that their firm was a fun place to work.

But in addition to compensation issues, men expressed significantly higher agreement with statements about whether they felt like a partner to their clients rather than an order taker; whether they found the work they did meaningful and worthwhile; whether people treated each other with respect, regardless of title; and whether they were satisfied with the level of personal recognition they received.

Perhaps most significantly, there was a 2.5 percent gap between men and women when they were asked whether they planned to build their careers with their current agency.

Ethnic Differences

White, Asian and Hispanic employees are all significantly more satisfied with their agencies than Black employees.

When asked whether, overall, they found their jobs rewarding, Asian-Americans indicated the strongest agreement (8.27) followed by Hispanics (8.24). Both groups expressed higher satisfaction than their white colleagues (8.05) who in turn were more likely to be satisfied than their Black counterparts (7.92).

But all three ethnic minority groups (that description is clearly valid in the context of the PR industry) gave their firms lower marks than their white colleagues when asked whether their firms provided equal opportunity regardless of race, gender, or sexual orientation. Whites indicated the strongest agreement with that statement (9.23) followed closely by Hispanics (9.21) and Asian-Americans (9.13). There was substantially less agreement among Blacks (8.62).

To a certain extent these scores can be explained by the inference that many of the Blacks surveyed are in supporting and administrative roles, rather than account service, professional roles. That inference is based on the fact that 12 percent of Black respondents have no college degree, compared to just 5 percent of respondents overall—but the same percentage of Hispanic respondents have no college degree, and they gave their firms significantly higher marks than did the Black respondents.

In any event, the scores are less troubling than the overall numbers, which is that industry as a whole remains predominantly white: 83 percent of respondents identified themselves as white, compared to 69 percent of the total U.S. population. The industry is 4 percent Hispanic, 4 percent Asian-American, and 3 percent Black, with and additional 3 percent either identifying themselves as “other” or declining to answer the question.

Educational Background

The public relations industry continues to recruit from a diverse educational background, although a liberal arts education remains the most common avenue of entry into the profession (23 percent of all respondents), still ahead of a degree in public relations (18 percent), although that has now overtaken a journalism degree (15 percent).

Seven percent of respondents to our survey have a business degree, 4 percent have a degree in marketing, and 1 percent have a law degree. That leaves 24 percent—the largest single group—who earned a degree in some other area of study.

Just how dramatic the shift towards PR education really is can be seen when examining education in the context of age. A third (33 percent) of employees under the age of 26 have a public relations degree, compared to just 8 percent of those aged 37-41 and just 3 percent of those aged 51 and over. Among those aged 37 and over, 18 percent have a journalism degree, while only 14 percent of those 26 and under chose a journalism education.

But the biggest decline is in those with a broad liberal arts education, who make up 27 percent of those aged 46-51 and 32 percent of those aged older than 51, but just 18 percent of the newest entrants into the profession.