Cost Comparison: Hiring In-House Vs. Hiring An Agency (Chart)

Jan 17

Welcoming the New Year brings not just resolutions but also fresh budgets. If you're a business owner or part of a marketing or communications team, the prospect of enhancing or reshaping your business capacity in 2024 might be on your agenda. This could involve restructuring your team, expanding your in-house capabilities, or outsourcing certain functions based on your business plan.

Before founding FACTEUR PR almost eight years ago, I spent nine delightful years as an in-house PR specialist for various companies. During that time, I handled not only media relations but also the intricate processes of researching, hiring, and integrating PR agencies and other marketing partners into our team. While I worked with some commendable companies, the experience wasn't without its lessons. Common pain points with PR agencies during my in-house tenure included delayed communication, indifference, availability issues, surprise invoices, and frequently changing team members. Despite recognizing that certain factors were beyond an agency's control, these experiences significantly influenced my approach to shaping FACTEUR PR. As a result, a few of our core culture pillars include being responsible & reliable, intensely polished, transparent, and happy to serve our clients. Most importantly, we work with our clients as partners, not vendors. This is an important differentiation. A vendor trades dollars for hours to provide a deliverable. A partner is invested in the long-term success of a business.

Considering all aspects, having spent many years in-house, I am especially aware of the advantages of hiring a full-time employee, and I am personally grateful for having been one. Undoubtedly, the most significant benefit of hiring a full-time employee versus an agency is that an employee has only one client: you. And when you’re trying to stretch your dollar, it’s easy to recognize the value of investing in someone who is completely devoted to your business as opposed to an outside entity with multiple priorities.

However, there are distinct advantages to working with an agency that serves multiple clients in your industry:

Agencies already possess strong relationships with journalists, producers, venues, events, influencers, celebrities, and other vital partners that are of value to your business.
Agencies can connect your business with other clients in similar or complementary categories, fostering mutually beneficial partnerships.
Agencies bring tried-and-true insights and perspectives from similar brands and campaigns, enriching your strategic approach.
Agencies can extend cost savings on collaborations or opportunities by bundling brands, providing a financial advantage.

While agencies come with a price tag, a modest investment starting at around $65,000/year can raise the question of wait, why opt for an outside agency when you can hire someone full-time with that money? Well, in my experience, agencies not only bring more experience to your business but can do so at an overall lower cost.

Let's delve into the breakdown of what a $65,000 salary versus an agency fee would look like.

Cost comparison of bringing PR in-house versus hiring an agency (well, THIS agency!):

With an agency, just about everything is included in this example, with the exception of things like travel, shipping, event planning costs, and so forth, which would be the same or similar between the two columns. But adding up taxes, benefits, software, and hardware alone can add $25,000–$30,000 in investment for an in-house employee versus an agency. This fee can be even higher depending on whether your team works remotely or not and doesn’t take into consideration the cost of possibly having to one day terminate employment, which can also factor in unemployment compensation, extended benefits, severance, and more. Agency fees can also be higher depending on the scope of work, size of the team, capabilities, and vigor of the engagement. Again, this is just an example.

To be clear, if you're working as an in-house PR specialist, you’re amazing, in case someone hasn’t already told you that today. (And if you have one on your team, good for you, and give them a raise, ha!) You don’t necessarily need to choose one over the other. As I mentioned, when I worked in-house, I hired PR agencies all the time, and at FACTEUR we cherish collaborating with our fellow PR practitioners as trusted partners. Nevertheless, if budget constraints are a consideration or if you’re looking to enhance your efforts with a specialized team, exploring the agency route becomes compelling. In this case, agencies can provide a lot of extra value: a larger team size, more experience, access to valuable opportunities and existing relationships, and hopefully, a proven track record of success.

What do you think? Has your experience been similar or different? Leave me a note or questions in the comments!