The business buzz words for 2008 have been 'credit crunch' and 'recession' - a shaky start to the year by anyone's standards. This lack of confidence has led to concern that PR budgets could come under even greater pressure. Yet salaries still remain at healthy levels across the industry.
At agencies the 'war for talent' has led to many experienced account handlers bagging hefty pay rises as an incentive to stay, or to switch employer. But some owners have been concerned that salary rises have surpassed growth in client spend, so a slowdown could herald a tougher approach to pay hikes.
Increasingly, competition for talent is coming from in-house departments as well as rival agencies. Both Penrose Financial managing director Gay Collins and bgb communications director Helen Coop say the increasing lure of in-house roles is pushing staff retention up their management agenda.
'We are already seeing pressure on fees that - in the PR sector more than any other - will clearly impact on agencies' ability to increase their total wage bill,' says Alan Adamson, senior consultant at Results, a business adviser to the PR and marketing sector. 'They will need to lock in talent, and continue to attract at the senior level, so we would expect a squeeze at more junior levels, with perhaps an increased switch to freelance.'
But what is apparent from the 2008 PRWeek Salary Survey is that other benefits are more important than ever. For agency PROs, health insurance, pensions, free phones and a host of other perks are becoming the norm. And in-house PROs, in both the private and public sectors, are being offered even more.
Pay in the private sector
'In-house salaries seem to be pretty static,' reports one comms director at a leading listed company. 'There has been a lot of consolidation within many FTSE 100 companies and the trend appears to be less manpower covering the same amount of workload. There seems little flexibility on salaries - most people seem to accept that significant salary increases are not feasible at the moment.'
In the current climate, companies are likely to keep a tight grip on costs. Communications teams will come under increasing pressure to deliver results while facing the threat of reduced budgets. Rentokil Initial head of corporate communications Malcolm Padley suspects the squeeze will also lead to the greater use of 'results-driven benefits', such as bonus payments based on measurable results.
'I suspect that salaries will be less affected than softer benefits,' says Padley. 'The communications profession is better than most at offering a wider range of benefits. I suspect these will start to be reined in.'
However, a comms manager at a well-known media owner, who previously worked at an agency, believes that benefits will continue to be better for those who work in-house. Interestingly, there is some evidence that internal communicators are increasingly commanding salary levels on a par with their external comms colleagues. This is as true for corporates in the regions as for those in London and the South East.
'Salaries for internal communications professionals are definitely rising,' agrees Claire Tuffin, managing director of recruitment consultancy VMA. 'But salaries do not necessarily correlate to job titles - an internal communications manager could be on £30,000 or £70,000.'
Last year VMA found the financial services industry outstripped other sectors in its demand for internal communicators, driving up salaries in the overall private sector.
Pay in the public sector
As ever in the public sector, salaries for many roles are constrained by set pay bands and there have been few inflation-busting rises. But remuneration for the big jobs is not to be sniffed at.
'The salaries for director of comms jobs across Whitehall have edged up in the past year, although they are still not in the ballpark of the FTSE 100 companies,' reports Foreign & Commonwealth Office director of communications Lucian Hudson. 'There is one being advertised at £115,000 and another I know of at £120-125,000.'
But Hudson says there is a sense that government is trying to catch up with the private sector to compete for talent. He notes that PR practitioners who have strategic skills and understand areas such as blogging are in particular demand. But finding such people is seldom easy.
'Interims are being paid well within the public sector and are being used more frequently as the process to recruit permanent people becomes more protracted,' says Tuffin. 'Permanent salaries are fairly static, within the usual salary ranges.'
That said, Peter Holt, director of communications and marketing at Newcastle City Council, recently reviewed his comms team structure, researching the market locally, and as a result upgraded both press officer and assistant press officer jobs by around £3,000. This made the council one of the higher payers for comparable jobs in the region with a view to retaining and recruiting high calibre staff.
'We attracted candidates from as far as London, Southampton, Holland and Germany,' says Holt. 'The quality of life and the affordability of quality housing was a definite factor in attracting people to relocate to the North East. Personally speaking, my £75,000 salary here buys me a lot better quality of life than £100,000 would in London.'
As a rule of thumb, public sector staff frequently enjoy better benefits than PR agency employees, whose fortunes rest on free market whims. Comms staff at unions are similarly likely to enjoy 'benefits that will make others jealous', as TUC head of campaigns and communications Nigel Stanley puts it. Among these are good pensions (many are still final salary), flexible working, reasonable hours, help with childcare costs, parental leave and good holidays. 'Pay structures, however, are likely to be flatter than the private sector, with better pay at the bottom but no obese felines at the top,' reports Stanley. 'Heads of comms in the bigger unions are probably on around £50-60,000, junior jobs a little more than half that, and most somewhere in the middle.'
Pay in the not-for-profit sector
'The charity sector isn't always able to offer the salaries commanded elsewhere but we work hard to benchmark salaries against other sectors to ensure we stay competitive,' says Cancer Research UK director of press and PR Carolan Davidge.
Aside from the obvious attraction of working for an organisation that is saving people's lives, Davidge says the charity prides itself on offering flexibility to staff. 'In terms of trends, I've seen a real growth this year in the number of people prepared to trade income for a better work-life balance, for example through job-shares and flexible hours,' adds Davidge. 'Recruitment-wise, it has been a candidate's market.'
Laura Dobson, senior press officer at pet charity The Blue Cross, says over the past year the charity has been able to recruit three people into the press office and acquire a new head of communications. 'We always have a good response to vacancies, so I wouldn't say we are competing any harder with other sectors,' she says. 'There are many people who would prefer to work for a good cause than a commercial organisation, regardless of differences in salary.'
Pay in the consultancy sector
Sustainability, or the lack of it, is a theme that crops up time and again when PR agency principals get into their stride on the subject of salary inflation at consultancies. 'PR wage inflation has been about seven per cent a year for the past three years and that is unsustainably high,' reports Lansons Communications chief executive Tony Langham.
A 'war for talent' last year inevitably meant salary expectations from some candidates were 'blown out of sustainable proportion', agrees Kaizo managing director Rhodri Harries. His belief though is that this will be redressed in the next few years. 'Issues around finding good senior people in tech and healthcare continue to push up salaries in really specialist areas,' he reports.
It is a picture familiar to Shine Communications founder Rachel Bell. She identifies a wave of young, ambitious and talented people who are pushing forward for promotion but are not benefiting from adequate support. 'There appears to be a trend of account managers leaving to take career/travel breaks to escape the pressure,' reports Bell. 'The upshot of this is agencies are in a bidding war to secure the best young talent, who are often over-trading their experience and capabilities.'
Few staff joining Shine appear to have had much exposure to the dynamic between income, overhead and profit, adds Bell, creating a need to encourage the workforce to be more commercially minded. In her view, it is management's responsibility to take time to explain how the company finances work.
Eulogy chief executive Adrian Brady agrees openness is important and says the introduction of a 'very transparent' profit-related pay scheme at his agency three years ago is a key way of rewarding staff while ensuring salaries do not spiral out of control. 'There has been strong salary inflation at account director level, with the gap between this level and directors closing dramatically,' says Eloqui PR chief executive Chris Genasi. 'Directors today are taking home the same as five or six years ago, whereas an account director will be commanding a salary that used to be reserved for associate directors and new directors.'
People are looking ultimately for job satisfaction, reports Edelman deputy CEO Susan Eastoe. Edelman has introduced a variety of ways to achieve this. Its Living in Colour scheme encourages employees to develop their personal interests; a 'green team' has been leading its sustainability efforts; while Edelman Free Time acts as a social committee.
'PR is starting to grow up,' says Firefly Communication group HR manager Liz Lovell. 'We are seeing fewer gimmicky benefits. Flexible working practices and work/life balance come high up the list for many people.'
REPORT FROM THE PR TRADE BODIES
CIPR director general Colin Farrington: 'The economic outlook for the next 12 months is uncertain and we may well see very different results in different sectors and regions. But unlike the slowdowns of the 1990s, I sense that public relations has more confidence as a profession and - particularly since our work with the (former) Department for Trade and Industry - should be much better equipped to demonstrate our worth to any organisation. We could therefore see salaries increase for key people in-house and in agencies as businesses rely even more on their communications advisers in the battle for market share and to differentiate themselves from competitors.
There may be a greater focus on variable benefits packages for key consultancy staff. Salaries may also increase for PR specialists in areas such as internal communications, as companies need to manage change caused by bigger trends such as outsourcing, offshoring and expansion in emerging markets.'
PRCA director general Francis Ingham: 'The past two years have seen a step change in how organisations value effective public relations advice. The PR sector has grown strongly as a result. That has fuelled a significant rise in salaries, and - inevitably - staff churn. Churn undoubtedly brings problems, but it is important also to recognise that it is a sign of a self-confident workforce.
While certain areas of the UK economy may be slowing, the outlook for PR remains strong. It would be sheer lunacy to talk ourselves - whether as an economy as a whole or as a single sector - into recession.
Over half of respondents to the most recent PRCA trends barometer are looking to increase staff numbers this quarter, while 81 per cent are planning to maintain the same levels of graduate recruitment.
The key to encouraging staff to stay is partly the obvious - paying competitive salaries - but also providing them with the career development tools that are increasingly demanded. High-quality training, qualifications and career development plans are more valuable now than ever before.'
REPORT FROM RECRUITMENT CONSULTANCIES
Prospect director Emma Dale: Concurs that salaries have risen, especially at expanding agencies that are increasingly using salary to keep staff. But there have been, she says, some 'almost unreasonably large' increases as counter-offers to keep people from account director upwards - one as much as £10k.
At the junior end, Prospect also generally saw an increase.
Entry-level salaries were up to £18,000 across the board, a big improvement on the previous £16,000.
Good candidates at this level remained hard to come by, so generally salaries increased across all junior levels to obtain the creme de la creme.
'On the in-house side, salaries remained similar to the year before and did not increase excessively,' says Dale. 'In-house communications teams appear to have more set salary bands that they are not prepared to change in order to find the best candidate. With more and more PROs wishing to move from an agency to an in-house role, candidates are more flexible with the salary they take.'
Media Recruitment consultant Tanya Ferris: 'Despite a steady increase in salaries in 2007, the key issue has been the war for talent. Employers have demonstrated that they will often increase an offer by anything up to three per cent to secure genuine ability and skill. Alternatively, companies will seek to extend recruitment searches over a far longer period of time. As a consequence, team growth has slowed, with existing staff incentivised with increased salaries and benefits packages.'
Ben Atfield, director of public affairs specialist Ellwood and Atfield: Says that at a junior to medium level in-house, salaries have been growing in a fairly pedestrian fashion. But at consultancies and at more senior levels in-house, there has been substantial salary inflation. 'Some individuals have been able to secure a 30 per cent rise,' says Atfield. 'It's a coming of age of public affairs and an absolute shortage of top candidates.'
It is no longer unusual for a director of public affairs in-house to command a package of £150,000 - up from £90,000 or £100,000 two years ago, concludes Atfield.
Price Trace Hawes chairman Neville Price: Notes that a shortage of good candidates in the ethical healthcare and b2b IT sectors has pushed salaries up but feels that there may come a point soon where the rises level out. Looking ahead, Price is concerned that agencies will cut back on graduate recruitment, triggering a shortage of account managers and account directors two or three years from now.
'We are seeing more benefits offered on the consultancy side to tip the balance for recruitment and retention,' reports Price.