PRCA highlights overservicing

Salary inflation, recruitment costs and overservicing of clients' business are the top three threats to agencies' profits, according to the PRCA's annual Benchmarking Survey.

The results, unveiled last week, mirrored the broadly positive findings of the PRWeek Top 150 (22 April), in which more than 80 per cent of the agencies that entered recorded fee income growth in 2004.

This year's findings saw further growth in the number of agencies (36 per cent) offering performance-related deals to clients, a figure up from 27 per cent last year.

According to the data, overservicing in PR agencies is averaging a rate of 22 per cent, meaning more than one day out of five worked on a client's business is not paid for.

News analysis, p17.

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