SALARIES SPIRAL IN 2000. NOW WHAT?: What a difference a year makesAfter a banner year for PR salaries, executives have woken up to a newreality. But don't expect the job-hopping to stop altogether

A feeding frenzy. An orgy. Highway robbery. Executive recruiters,

HR specialists and CEOs alike describe the PR salary scene in 2000 in

indulgent terms, and every one has anecdotes to tell about the excesses

of the market. They were not wrong. As the PRWeek/Text 100 Salary Survey

2001 finds, PR executives across the board made out like bandits, with

average salary hikes exceeding 17%.



But what a difference a year makes. 'Last year, PR people had a very

fixed idea of what they wanted, calling all the shots down to the last

detail,' remembers Judy Cushman, president of West Coast headhunter firm

Judith Cushman & Associates. 'It was always corporate, always stock

options, pre-IPO. They would even specify the length of the

commute.'



Not anymore, Cushman notes. Today, the job market is much more flexible.

'Candidates are open to agency positions and the dollars are softening.

Issues like the length of the commute are barely mentioned.'



Welcome to the new reality. Almost every week, the headlines are full of

layoffs. One agency reported pay cuts for top executives. Everyone is

reeling from a suddenly soft economy. And the question on everyone's

lips is 'what happens next?' While few doubt that the excesses of last

year cannot be sustained, the question is, how resilient will PR

salaries be to the new market conditions? Will they continue to

outperform other sectors, like advertising, as they have done in recent

years? Or will they fall into line?



The PRWeek/Text 100 Salary Survey provides many insights into the state

of the industry, including salary expectations, concerns, and

complaints.



This report looks into the near future and examines key issues affecting

salaries and benefits. But first, we must look at what happened last

year. It's a dizzying ride.



The key finding in this report is the confirmation of last year's

excess, which was reported anecdotally, but never statistically

supported. Salaries went up on average by a massive 17%, from dollars

50,000 to dollars 59,000. And that's before bonuses (average bonus:

9%).



It's an almost unbelievable figure, when set against any other

benchmark.



PR salaries in 1999, for example, were up 7.8%, already well ahead of

other service industries like advertising and management

consultancies.



Figures for these industries in 2000 are not currently available, but

the National Bureau of Labor Statistics reports that salaries among the

US work force as a whole in 2000 were up by just 2.1%.



Hi-tech's influence



It's no surprise to find that hi-tech salaries were the driving force

behind the extraordinary escalation in salaries. Hi-tech PR salaries

rose by 27%, from dollars 52,000 to dollars 66,000. But the survey finds

that this was not the only sector recording massive salary gains (see

Table 8). Consumer (22%) and utilities (20%) were other notable winners.

Nor was it just in the corporate/agency face-off for talent that

salaries spiraled. Salaries in government/politics were up by 16.7%;

only in nonprofits (8.3%) and education (6.6%) did raises lag the

market.



But it's tech that has unquestionably seen the most salary action. 'What

we saw was a direct reflection of what was happening to our clients,'

says Aedhmar Hynes, CEO of hi-tech agency Text 100. 'It was one of the

craziest periods in the history of the stock market, and the technology

market as a whole experienced an undersupply of qualified people. PR

merely mirrored that.'



While tech is not the best-paid sector (see Table 8), it's definitely

been the place for the younger generation to earn a quick buck. The

time-worn correlation between age and salary simply does not compute in

hi-tech. Executives in this sector are consistently younger (average age

31.5) than telecom (dollars 67,000, average age 34.8),

manufacturing/industrial (dollars 66,000, average age 38.2), and banking

(dollars 64,000, average age 36.4). And further analysis reveals the

disparity that the hi-tech splurge created last year. A VP specializing

in hi-tech was making dollars 114,000 as opposed to dollars 97,000 in

financial and dollars 70,000 in healthcare, for example.



In this environment, with stock options offering the opportunity of

instant millionaire status, employers struggled to attract and retain

staff. The survey charts the extraordinary turnover in hi-tech that

fuelled this disparity. Hi-tech practitioners have worked for the

current employer for two years (a 50% turnover), and in their current

position for just 1.3 years, demonstrating the severity of the learning

curve. Across all sectors the work force has been at their company for

3.8 years (a 26% turnover), and in their current position for 2.5

years.



City swingers



As the white hot economy continued, last year, all the major US cities

recorded above average salary gains. But once again, it was key tech

markets where the biggest raises were seen. New York (up 21% to dollars

71,000) is a distant third to San Jose (dollars 86,000) and San

Francisco (dollars 82,000) in terms of salaries, despite being the

capital of PR (see Table 2).



More detailed analysis (see Table 13) shows that while a VP in New York

can match his/her Silicon Valley counterpart (a VP earns dollars

120,000), junior and mid-level positions in New York trail those in the

Bay Area. An account executive/PR officer earns dollars 47,000 in the

Bay Area; in New York they might expect to make dollars 38,000 (26%

less). And while a PR manager in the Bay Area earns dollars 74,000, in

New York he/she typically earns dollars 62,900 (18% less).



The Bay Area was once again witness to the highest salary increases in

the country, up 32% in Silicon Valley/San Jose and 27.5% in San

Francisco.



Also clearly benefiting from the tech boom, Boston paychecks swelled by

30% to dollars 65,000 to rival salaries in Washington, DC for the first

time (see Table 2).



Agency vs. corporate



Aside from the growth in tech, one of the biggest changes in the PR

market over the last few years has seen an increasing parity between

agency and corporate positions (see Table 3). So, while salaries in

corporate PR (dollars 64,000) remain higher than in agencies (dollars

59,000), agencies saw the biggest salary gains, up 18.9% as opposed to

15.8% in corporate PR. Positions in government (dollars 51,000) and

nonprofit (dollars 46,000) trail, while in fact the best pay of all is

for solo practitioners and freelance consultants (dollars 73,000).



As the survey shows, the more senior you get, the bigger the

discrepancy.



A VP in a corporate job makes dollars 122,000, with VPs at agencies

(dollars 91,000), government (dollars 85,000) non-profits (dollars

72,000) all trailing. Similarly, an EVP/SVP at a corporate makes dollars

164,000, with agencies (dollars 142,000), government (dollars 95,000),

and nonprofits (dollars 73,000) lagging even further.



However, as Table 12 shows, the largest agencies (with 1000-plus

employees) are more competitive with corporations, and it's only the

higher number of large corporations that creates the discrepancy.

Further analysis shows that the largest firms fought hardest to keep

staff, with 26% reporting that they had been offered an extra salary

review over and above the annual review, in order to stay. The average

was 15%.



The Future



But what of the future? In the new new economy, as we reported earlier,

the situation has changed drastically. Suddenly tech stocks are

plummeting, stock options are worthless, layoffs abound, and consumer

confidence is at its lowest level in years. What can we expect?



As the PRWeek/Text 100 Salary Survey demonstrates, there is a heightened

sense of threat, with nearly 18% of respondents (including 27% of

corporates) feeling that their job is under threat as a result of an

M&A; and 21.4% (including 36% in tech) sensing a threat to their job as

a result of the economic slowdown (see Tables 16 and 17). Bob Woodrum,

managing director at executive recruiter Korn Ferry, reports a dramatic

shakeout 'with dot-com people thinking agencies are the more stable

place to be nowadays. It's a tougher world in corporate PR. If you can't

show how you're adding value, you won't be there much longer.'



But there is also a heightened fear among agency personnel. According to

Judith Cushman, they have a legitimate concern. 'I'm not convinced

agencies have the reserves and know-how to ride out downturns to keep

people for these traumatic changes - even if they are short-term.

Agencies by their structure and nature are unable to plan for the

future.'



Expectations are correspondingly more modest, averaging 5.7%. In the

hi-tech sector salary expectations are among the highest (7.3%), with an

optimism exceeded only by opportunistic crisis communications experts,

who expect to increase their pay packet by 7.6%.



But Aedhmar Hynes, CEO of Text 100, predicts that some in the tech

market have not woken up to the new reality. 'As quickly as we've seen

the dot-com and technology market take a significant downturn, I believe

we'll see the same happen with salaries in the businesses that serve

it,' she says. 'I believe we'll see the imbalance in tech salaries

diminishing over a relatively short period of time.'



Jack Bergen, president of the Council of Public Relations Firms,

concurs.



'I think raises will be much more in line with other professional

services,' he says. But he counsels against pay freezes. 'One thing we

learned from the last recession was that salary freezes and salary cuts

were counterproductive.'



Jean Allen, senior partner at executive recruitment firm Heidrick &

Struggles, agrees: 'As I listen to people talk about what they hope to

accomplish this year, they feel they're going to work harder than they

ever have, and I think they expect to work with smaller teams. But they

don't expect to take a pay cut or that their advancement will be slowed

down.'



Indeed, if this survey confirms anything, it shows that new economic

conditions have not blunted the determination to move on and move up,

with 35% of respondents reporting that they expect to move jobs in the

next 12 months (and 32.5% actively looking). Indeed, with 50%

pronouncing themselves dissatisfied with career opportunities at their

company, and 28.5% reporting that they are uncommitted to the PR

industry, it's clear the issue of turnover is not going to go away all

of a sudden. 'People don't know what they need to do to move up,' says

Bergen. 'We do not have good clear career paths.' Adds Allen: 'It's hard

to keep stars on a career track for advancement.'



So how should employees tackle turnover? Training and development is one

solution. In agencies, 30% report that they are not provided with

adequate training. In corporations, this figure rises to 35%, and goes

as high as 45% in small and medium-size corporations. Cushman doubts the

situation will change. 'Corporations are willing to pay the going rate

for people who are more performance-ready,' she says. And Woodrum

agrees.



'Years ago, IBM had a speechwriting track, and each VP had his own

speechwriter, and you'd move up the ranks from one to another. Now, in

corporate, you're pretty much a lone ranger. It's a stroke of luck if

there is a position for you to advance into when you're ready to move

up. Now you have to take a job in a company and look for your next

promotion in another company.'



But perhaps there is still room for some old values yet. Hynes certainly

thinks so. 'I believe agencies have an opportunity here to get back to

focusing on what really matters to people when it comes to career

development. An employer needs to be committed to really understanding

what motivates people to stay. Agencies have to focus on how you offer

people long-term careers (with international opportunities, building new

businesses, developing new skills, rather than obsessing over

compensation.'



'Employers also need to be committed to creating a work/life balance and

ensure that you actually deliver on it,' Hynes adds. 'That's everything

from flexible working through to extended vacations, sabbaticals and

maternity/paternity leave.'



Ethnic



Other challenges for the PR industry are more long-term. The first

concerns the lack of ethnic diversity.



As the survey shows, the PR industry is still predominantly white (89.4%

vs. 82.2% of the population, according to US Census Bureau statistics);

while blacks (4.5% vs. 12.8%), Hispanics (2.8% vs. 11.8%) and Asians

(2.1% vs. 4.1%) are all underrepresented.



The situation is improving. Last year's survey showed the industry to be

91% white. The biggest gains are being made at the junior level,

especially in agencies, which are more inclined to offer

minority/multicultural counsel. It's a figure to watch.



Sex



A still more contentious issue, however, concerns the apparent

discrimination in salaries (see Table 1). The PRWeek/Text 100 Salary

Survey records a 37% disparity between salaries for men (dollars 73,000

on average), and women (dollars 53,000). This disparity has given rise

to much debate, and a new book, Women in Public Relations: How Gender

Influences Practice, challenges the bias. Written by Larissa Grunig,

Elizabeth Lance Toth and Linda Childers Hon, it's an extensive

examination of the so-called glass ceiling.



To what extent this is a real issue is still a moot point, however. A

major cause of salary disparity is explained by age and experience. The

average male in the PR industry is 38, while the average age of a

typical woman in PR is much younger, at 33.8. Also, men are more

experienced, having worked in PR for 11.1 years (as opposed to 8.2 years

for women).



In fact, there's a very clear polarization. The largest component of men

have been in the industry for more than 20 years (17.5%); while an

identical 17% of women (and again, the largest component of women in PR)

have been in the industry for less than two years. Women at entry level

positions in PR now outnumber men by 4-to-1.



Another factor influencing pay discrimination is the choice of sector:

men tend to work in the best-paid sectors (financial services/banking;

industrial/manufacturing; hi-tech), while women traditionally have opted

for sectors where pay is lower (consumer, food and beverage, travel and

tourism, and nonprofits). And men dominate in the best-paid practices

(crisis communications, reputation management, investor relations,

public affairs) while women (often simply because they're younger) work

in disciplines which do not pay as well (internal communications;

community relations; media relations).



Even analysis of men's and women's salaries by specific job title tells

you only so much. At dollars 105,000, a female CEO/chairman/president

earns 27% less than her male counterpart (dollars 134,000). A female

EVP/SVP earns 39% less (dollars 118,000 vs. dollars 165,000). A female

VP earns 20% less (dollars 94,000 vs. dollars 113,000). However, as our

analysis switches to more junior positions, the disparity becomes

smaller and smaller, to the point where pay for male and female account

executives/PR officers (dollars 39,000 vs. dollars 40,000) and

AAEs/assistants (dollars 36,000 vs. dollars 35,000) is identical.



'I think the glass ceiling is an outdated misconception, at least as far

as agencies are concerned,' says Jack Bergen. 'I'm not saying it doesn't

exist at all, and it's true that the top 10 agencies are still run by

men, but 37% of the top 100 agencies are run by women, and there are an

additional five women who are president or COO. We expect the number

only to increase as the number of women entering the industry continues

to rise.'



Supporting this sense of new empowerment are the attitudinal questions

posed in the PRWeek/Text 100 Salary Survey 2001. When it comes to

satisfaction with career opportunities, 48.5% of women say they are

satisfied, against 51.7% of men. In truth there are several factors that

have to be taken into account before a true picture of discrimination

can be determined, including: age, experience, hours worked, the type of

work, the PR specialty, education, the number of degrees, breaks in

service, job flexibility, willingness to relocate, political skills, the

ability to negotiate, general expectations/ambition. Only with complex

regressional analysis can the true extent of discrimination be

determined. Using the data from the PRWeek/Text 100 Salary Survey 2001,

we will be conducting regressional analysis. A report on its findings

will be published by PRWeek in the late spring.



The PRWeek/Text 100 Salary Survey 2001 was conducted by e-mail in

February 2001. The results were logged and analyzed by Impulse Research,

an independent Los Angeles-based research firm. With more than 5,000

respondents, the results are accurate to +/- 2% at a 95% level of

confidence. The increased sample size better reflects the full scope of

the industry, and in particular there are more junior-level staff among

respondents. (The number of staff with less than two years in the

business was up by 55%, from 10% to 15%; on the other hand, the number

of PR executives with more than 10 years of experience fell by 12.3% as

a percentage of the total sample, from 43% to 38%.) This caused average

salaries to actually drop by comparison with results from last year's

salary survey report. The results are therefore based on historical

salary information provided in response to this year's salary

survey.



This article provides selected highlights from a full report that is now

available from PRWeek. The report includes a full breakdown of the data

by sex, region, ethnicity, job title, type of company, industry sector,

PR discipline, etc. The report also contains information on benefits,

bonuses, training programs, job and pay satisfaction ratings, as well as

lifestyle insights. The cost of the full report is dollars 250. Call

Talya Meyerowitz at (212) 251-2600 for more information.



1. SEX

Category Average Male Female

Breakdown (total) N/A 29.7 70.3%

Age 35.0 38.0 33.8

Years spent in PR 9.1 11.1 8.2

Years in current position 2.5 2.8 2.3

Years with current employer 3.8 4.4 3.6

Salary (dollars) 59,000 73,000 53,000

Salary increase (%) 16.9 17.6 16.7

Next salary increase (%) 5.7 6.2 5.5

More than one review last year (%) 15 14.5 15.2

Minimum hike to leave job (%) 20.0 22.0 19.0

Vacation days 16 17 16

Bonus as of salary 8.7 10.4 8.1

2. CITY

City Salary %

dollars increase

San Jose 86,000 31.1

San Francisco 82,000 27.5

New York 71,000 21

Boston 65,000 30

Washington, DC 65,000 23

Minneapolis 63,000 14

Philadelphia 59,000 12.1

Seattle 58,000 14.9

Dallas/Houston 58,000 20

LA/Orange County 58,000 19

Atlanta 58,000 21

Chicago 55,000 20

3. WHO YOU ARE BY WHERE YOU WORK

KEY:

(A) Average

(B) PR Agency

(C) Corporation

(D) Government/politics

(E) Non-profit

(F) Self-employed/Consultant

(G) Education

Category (A) (B) (C) (D) (E) (F) (G)

Age 35.0 31.0 36.5 39.0 35.9 41.9 41.9

Yrs spent in PR 9.0 6.5 10.1 11.5 9.5 14.1 13.6

Yrs in current

position 2.5 1.6 2.5 3.4 2.9 4.2 4.5

Yrs with

current employer 3.8 2.5 4.4 5.7 4.2 4.4 6.2

Salary(dollars) 59,000 59,000 64,000 51,000 46,000 73,000 47,000

Salary incr (%) 17.3% 18.9 15.8 16.7 8.4 18.9 6.6

Next salary

increase (%) 5.7 7.4 5.3 3.5 4.1 4.4 3.6

More than one

review last yr(%) 15.1 16.4 15.7 10.6 16.0 8.4 6.3

Minimum hike

to leave job (%) 20.0 20.0 19.0 19.0 17.0 30.0 21.0

Vacation days 16 14 16 18 17 17 21

Bonus as %

of salary (%) 8.8 9.3 11.6 3.1 3.9 6.3 1.3

Own shares in

company (%) 25.6 15.9 47.8 1.3 0.3 40.2 0.8

SALARIES, BENEFITS, SATISFACTION

7. AVERAGE SALARY BY JOB TITLE

Job title Salary Increase Est incrse

dollars 2000(%) 2001(%)

EVP/SVP 140,000 9.3 5.7

CEO/Chairman/President 121,000 14.0 5.6

VP 103,000 24.1 6.4

Director/Partner 77,000 22.1 5.7

PR director 66,000 23.0 5.0

PR manager 50,000 11.9 5.5

Senior Account Executive 48,000 12.5 6.9

Account Executive/PR officer 40,000 25.1 6.3

Assistant Account Executive 35,000 23.1 5.1

Coordinator/Assistant

Account Executive 30,000 22.5 3.9

Sole practitioner/

Freelance consultant 58,000 19.7 3.9

8. AVERAGE SALARY BY INDUSTRY SECTOR

Industry sector Salary Increase Est incrse

dollars 2000(%) 2001(%)

Advertising Agency 60,000 14.0 6.5

Arts & Entertainment 50,000 18.5 5.4

Consumer 60,000 22.1 8.0

Education 49,000 6.1 3.7

Finance 64,000 14.1 5.6

Food/beverage 60,000 14.8 6.0

Government/politics 50,000 17.7 3.8

Healthcare 58,000 15.0 5.0

Hi-tech 66,000 27.1 7.3

Manufacturing/Industrial 66,000 14.0 5.1

Non-profit 45,000 10.0 4.5

Professional Services 59,000 9.9 6.2

Retail 55,000 12.4 5.8

Telecom 67,000 16.2 6.5

Travel/Tourism 54,000 10.0 5.0

Utilities/Power 58,000 20.4 4.6

9. AVERAGE SALARY BY PR DISCIPLINE

PR Discipline Salary Increase Est incrse

dollars 2000(%) 2001(%)

Community relations 45,000 12.9 4.8

Crisis communications 75,000 22.5 7.6

Internal communications 55,000 12.6 4.7

Investor relations 78,000 16.4 5.2

Marketing/branding/media relations 56,000 19.1 6.3

Public affairs/government relations 61,000 18.8 4.9

Reputation management 77,000 17.6 6.1

10. BENEFITS

Medical plan 93.20%

Dental plan 82.90%

401k plan 82.50%

Performance-related bonus 44.10%

Paid maternity/paternity leave 36.60%

Profit sharing 23.10%

Share options 18.20%

Health club membership 17.00%

Other benefits 15.80%

Other bonus 7.80%

Guaranteed bonus 6.10%

Company car 4.30%

SALARY BREAKDOWN BY SIZE OF COMPANY, PLUS SALARY RANGES FOR KEY CITIES

City Average VP/SVP/EVP PR Manager AE/PR Officer

dollars dollars dollars dollars

Atlanta 58,000 92,000 50,000 33,000

Boston 65,000 117,000 65,000 38,000

Chicago 55,000 91,000 41,000 34,000

Dallas/Houston 58,000 98,000 56,000 36,000

LA/Orange County 58,000 83,000 50,000 38,000

Minneapolis 63,000 102,000 48,000 40,000

New York 71,000 120,000 62,000 38,000

San Francisco/San Jose 84,000 119,000 74,000 47,000

Washington DC 65,000 82,000 56,000 39,000

National Average 59,000 110,000 50,000 36,000

Source: PRWeek/Impulse Research



Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Register
Already registered?
Sign in

Would you like to post a comment?

Please Sign in or register.