Salary Survey 2010: The new normal

As the industry fights back from a tough year, it is adjusting to a difficult, but improving, job market, according to the 2010 PRWeek/Bloom, Gross & Associates Salary Survey.

As the industry fights back from a tough year, it is adjusting to a difficult, but improving, job market, according to the 2010 PRWeek/Bloom, Gross & Associates Salary Survey. 

Though the PR industry is still reeling from the grim realities of 2009, the recovering economy is steadily – albeit slowly – creating new opportunities for PR practitioners willing to accept the industry's “new normal.”
 
Today's job market offers fewer positions with fiercer competition, tempered salaries, and is kindest to those steeped in digital know-how. But as the economy limps toward recovery, many expect more robust hiring and for agencies to clamor to retain talent who felt overworked and underappreciated last year.
 
The 2010 PRWeek/Bloom, Gross & Associates (BGA) Salary Survey polled 1,007 PR professionals across various work settings and disciplines. Of the respondents, 46% work for a PR agency; 25% work for a corporation; 8% work for nonprofits; 4% are self-employed/freelancers; 4% work in education; 3% work in government; and 2% work for a trade association.
 
The survey findings show modest improvement of a battered economy. While only 13% of respondents changed jobs in the past 12 months (compared with 21% in 2009), 35% of this group had been laid off, compared with 23% reporting being laid off in 2009. Yet optimism abounds, as only 14% consider their jobs to be under threat because of the economy, down considerably from 22% in 2009.
 
“There is more solid confidence in the economy,” says Karen Bloom, principal at BGA. “People are feeling less panicked and that's good. Because people are feeling more confident, we'll see more movement in the marketplace.”
 
But for those on the market, last year tested their patience and professional networks. Catherine Topping, an SAE at Landis Communications, was laid off from Carmichael Lynch Spong (CLS) in February 2009.
 
“This summer was slow, so I joined a networking group and that led to several informational interviews,” she recalls. “By fall, these turned into real job interviews.”
 
This focused networking ultimately led Topping to her current position. But she says without being keyed into new opportunities this way, her job search would have been more daunting.
 
Doug Spong, a principal at CLS, says 2009 was the agency's first down year in its 20-year history, resulting in layoffs at all experience levels. He says business has rebounded, but the industry isn't in the clear yet.
 
“I've been through at least three fairly steep recessions in my career and I think this one was different,” Spong says. “I don't see this one running back. Client spending is crawling back on its hands and knees.”
 
Salaries reset
PR professionals have also lowered their salary expectations. Only 18% describe themselves as “very aggressive” in negotiating salary, compared with 23% in 2009.
 
“People don't always feel very strong negotiating for salary the longer a recession goes on,” says Bloom. “The reality of the situation settles in and people become a little more complacent.” 
 
But this hasn't tempered ambition, as 70% say they want to attain a high professional rank over the course of their career.
 
“Salaries have not come back,” says Jim Delulio, president of PR Talent. “They are not going to rebound as quickly. In some cases, they're going to be down 10%.”
 
The median salary overall for respondents was $82,000, a slight decrease from last year's median salary of $86,000.
 
Among those surveyed, 53% say their salaries are equal to or less than they were a year ago, a staggering jump from the 27% who said so in 2009. Still, 27% expect no raise in their next review, while more than 30% expect the bump to be less than 4%. In 2008, only 9% didn't expect a raise.
 
“There's been a fundamental reset in salaries and I'm not sure when that's going to return to pre-crisis levels,” says a senior-level communications professional at a Fortune 10 company who asked not to be named.
 
This was, in part, fueled by pay cuts and deferred raises that became standard last year. Michael Kempner, CEO of MWW Group, says that while his agency was “more judicious” with raises, they didn't stop altogether.
 
“You should not be penalized for being loyal,” he says. “You shouldn't have to leave to get a raise.”
 
Helen Vollmer, founder of Houston-based Vollmer PR, says last year her firm implemented a 10% pay cut for 60 days that included all staffers making more than $50,000.
 
“We didn't want to do layoffs and people understood that they just needed to hang in there for a few months,” she recalls. “We reinstated regular pay as soon as we could.”
 
CLS' Spong deferred merit salary increases, but not promotions. “If people deserved promotions, they got their increases,” he says. “You don't want your staff to think the only way they can get a raise is by leaving.”
 
Many agencies have reinstated merit increases and promotions this year, but bonus pay is still conservative – particularly for senior staff.
 
“Base salaries are holding steady, but people are taking a hit for total cash compensation,” says Asheley Galloway Linnenbach, a partner in Korn/Ferry's corporate affairs practice. “The majority didn't get a bonus last year and that can be significant.”  

Adjusted expectations
Matthew Harrington, US president and CEO of Edelman, says the agency is actively hiring for more than 90 open positions in the US. While candidates are more measured in their salary expectations, he says the firm is being cautious of those not expecting any compensation bump.
 
“People are not expecting a huge leap forward,” he notes. “But we tend not to have lateral moves because we want to have a motivated workforce.”
 
Ryan Donovan, senior director of corporate communications at SanDisk, says salary expectations have “come back to Earth.”
 
“I don't think people are willing to do lateral moves,” he suggests. “But they are not as aggressive on salaries.”
 
Yet Aedhmar Hynes, CEO at Text100, says her agency began hiring again last fall after late 2008 layoffs. So far, she adds, job candidates haven't scaled back salary requests.
 
“Even the most entry-level candidates are comfortable and confident asking for more money,” Hynes says. “There isn't the ‘desperation' we saw during the dot-com recovery where employers could really drive the salaries offered.”
 
Most hiring managers don't want to bring candidates on board who will be taking hefty pay cuts. This hurts those whose salaries had soared much higher than market averages during better days.
 
“There's a limit to how far down you're willing to go below someone's previous salary because once the upturn comes, they'll be looking again,” BGA's Bloom explains. “Those who jumped a lot during the boom, when people were throwing money at candidates, may have inflated their salaries, but hurt their long-term employment prospects.”
 
Many job seekers are aware salaries are scaled back, so they are instead looking for other perks like flex time and even job security.
 
In fact, 61% of respondents said they would be willing to take a pay cut or salary freeze to ensure job security for the next year, compared to 63% in 2009.
 
“In salaries, we're not looking at what the market will bear,” says MWW's Kempner. “We're looking at the candidate and what kind of budget we have. But more candidates are looking for stability and positive growth opportunities.”
 
Susan Butenhoff, CEO of Access Communications, says increasingly job candidates want to know if they'll have a more manageable workload if they change employers.
 
“They want to know how many accounts and the size of those accounts,” she explains. “They want a break from the fast-food style account service of 2009. People were working on an incredible number of accounts just to meet revenue and billing requirements.”
 
More rigorous hiring
Of respondents, 43% were very willing or willing to relocate for a job opportunity. In addition, 26% of respondents reported that they were more willing than last year to make a move, virtually the same percentage as 2009's findings.
 
“But for people who are already employed,” says the source at the Fortune 10 company, “it's really hard to get them to move cross country.”
 
The source is hiring at the director level, but says the recession hasn't made locating talent any easier.
 
“I'd say about half the resumés I've seen are from people who have been laid off and half are employed,” says the source. “There are a lot of good people out of work, but I'm still having a hard time finding great people.”
 
Even for candidates willing to relocate, hiring managers are scrutinizing motives more and looking for long-term fits. Christine Barney, CEO at rbb PR, says her Miami-based agency recently hired a new employee from New York.
 
“We prefer it when someone isn't moving for the job alone,” she explains. “It helps if someone understands the market and the lifestyle here. They're just more likely to be successful.”
 
Taking a closer look at candidates has become a standard hiring practice, especially when a single job opening results in a flood of candidates, many of whom seem to be equally qualified on paper.
 
“The process of hiring has changed,” says Tim Dyson, CEO at Next Fifteen. “It has become tougher and more rigorous. People were much more casual and used to hire people if they liked them. But now they are drilling much deeper to make sure they have the right skills.”
 
Layoff stigma
For those grappling with a layoff, the hiring process is even tougher. Although most recognize even talented and motivated PR pros became victims of the dire economy, some bias still exists against those let go at the senior level.
 
“In some cases, there was good reason,” says Dyson. “The productivity and utilization of senior-level people does come under scrutiny when budgets are tight. If they aren't highly utilized, they cost agencies the most.”
 
PR Talent's Delulio agrees that senior-level PR pros were hit hard in 2009 and many have found it tough to re-enter the game. While many executive search firms are seeing demand spike, the fight is often for employed senior talent.
 
“We've seen a certain resistance to candidates who are not gainfully employed,” explains Bill Heyman, president/CEO of Heyman Associates. “If a client hires an executive search firm and they're paying a search fee, they aren't looking for someone who doesn't have a job.”
 
But Korn/Ferry's Linnenbach, says she sees this bias receding as clients realize the number of “great [unemployed] candidates looking and the reality of the market.”
 
Because so many organizations reconfigured their staffing model last year, some predict there will be a long-term shift in these levels. Next Fifteen's Dyson says the recession pushed firms to rethink basic agency conventions, like the value of having an abundance of mid-level staffers on the payroll.
 
“There has been a slightly changed business model and agencies are wondering whether a slightly higher number of senior-level and more junior-level staff is more effective,” Dyson says.
 
SanDisk's Donovan also restructured the company's PR team last year, eliminating several senior manager positions and replacing them with two posts at the director level. The company is presently looking for junior- to mid-level staffers.
 
“I reshuffled at the senior level and decided to add at the mid level,” he reports.
 
Demand for mid-level experience personnel reached a crescendo following the dot-com recession.
 
“We aren't seeing any dearth of mid-level talent and are fully staffed at the [account manager] level,” says Text 100's Hynes.
 
She adds that her agency doesn't anticipate talent will be as tight as it was during the previous recession, mainly because fewer people were entering PR then.
 
In fact, senior-level staffing seems to be taking priority at some agencies. Several are either planning to or recently made senior additions, including Porter Novelli, MWW, Text 100, and CLS.
 
BGA's Bloom says that she's seeing a lot of newly created positions for mid- to senior-level practitioners, but there is some concern about skills.
 
“As with most recessions, we're seeing skill gaps because people were not getting hired or trained during the recession,” she notes. “I think initially this gap is at the junior level, but eventually we'll find it move up the hierarchy.”
 
New reality
While the industry can expect the relentless pace of the past 18 months to slow as budgets increase, new staffing models might not alleviate pressure as much as people expect.
 
“The workload won't be as intense as it was for the past 18 months, but it won't be as easy as it used to be,” MWW's Kempner predicts. “Many of us were bloated in our operations.”
 
Pressure to perform also intensified last year. According to the survey, 47% agree that they feel more pressure to perform than they did 12 months ago.
 
Gary Stockman, CEO of PN, points out that there have been additional pressures on the PR industry – mainly from procurement and increased competition from other marketing agencies – that transcend the economy.
 
“Everybody's working at capacity or beyond and we're going to still be working hard in 2010,” he says. “There is a new competitive atmosphere now that has to do with more than the economy.”
 
But Access' Butenhoff warns against overworking staff, especially as more job opportunities emerge.
 
“I'm finding junior-level staffers are looking for relief from what they had to put up with in 2009,” she says. “There was a lot of pressure on the junior level, not only with increased workload and hours, but increased expectation on what they were expected to know how to do.”
 
But Butenhoff says the PR industry is likely to bounce back to more normal workloads because clients will ultimately demand it.
 
“This new ‘normal' is about profits and revenues – not client service,” she emphasizes. “The successful and healthy agencies will be focused on client services rather than making the next margin.”
 
SanDisk's Donovan says he's heard similar frustration among job seekers.
 
“The workload has piled up and the expectations have gone through the roof,” he notes.
 
Exhausted morale
While job satisfaction remains positive, with 51% saying they find their work rewarding, agencies are preparing for their overwhelmed staffers to start entertaining new offers. Only 30% of respondents strongly agree that they find their jobs more rewarding than they did 12 months ago.
 
“As the market starts to open, you'll see a flood of people pursing new opportunities,” Donovan says. “It seems there are a lot of people who feel like they've been really taken advantage of by their employers.”
 
CLS' Spong says it will take time for the industry to recover from what it has seen.
 
“People are largely shell-shocked by what happened in the past 18 months,” he suggests.
 
Cynthia Rude, managing partner at Paine PR, says it is probably too late for agencies to reverse poor morale.
 
“The die has already been cast,” she says. “We decided retention was going to be important so we've been emphasizing mentoring and growth.”
 
Alleviating workload has been another priority. While Paine conducted layoffs last year, the agency is now hiring and will have staff comparable to pre-recession numbers this year.
 
“We've seen it here,” says Rude. “Employees are tired and working really hard.
 
“We're in a fortunate position of growth right now,” she adds. “So we are hiring. We had a strong Q3 and Q4 and indications show 2010 will be good.”
 
This momentum, is positive for retention and employee morale, Rude notes, adding that the key is making sure staffers feel connected to the agency's entire business.
 
“In interviewing candidates, we see our share of people who were at agencies that reorganized,” she explains. “But they are dissatisfied because even if they kept their job, they didn't feel like they were communicated to about the process.”
 
Lynne Doll, president of The Rogers Group, says her agency didn't curb raises or reduce salaries last year in order to keep morale high.
 
“We are still looking closely at workload,” she explains. “Workloads are higher than in the past, but we're making sure they're still manageable.”
 
Moving up
Despite a trying work environment, respondents' commitment to PR was 66%, up from 61% last year. The number of job seekers looking for work outside of PR due to the economy dropped to 19% from 24% last year.
 
But with mentoring scaled back in the past year, and promotions often put on hold, agencies are making sure they are providing upward mobility to their employees ready for new responsibilities.
 
“We've resumed salary increases and just promoted more than 17% of our [North American] staff,” says Text 100's Hynes. “We continue to feel the pressure to balance salary growth with a recovering market and are reviewing this constantly to get it right.”
 
She adds that employers are increasingly providing counter offers to retain their people.
 
“I anticipate interest in staff this year,” says Edelman's Harrington. “When people come knocking, I want our people to know they have great opportunities here.”
 
Next Fifteen's Dyson adds that clients often make money available to keep their star players working on their account.
 
“Are the career paths that were there in the good times still there?” No,” he says. “But there will always be career opportunities for good people – clients demand it.”
 
Yet the survey finds only 6% of respondents had a salary increase over their annual review to keep them from leaving, down from last year.
 
Access' Butenhoff, who increased headcount by 37% in 2009, says the biggest threat for agency retention will be from in-house opportunities, especially because so many organizations scaled back in 2009 and relied more heavily on their agencies.
 
“There's going to be a survivor's mentality and a desire for change,” she notes. “But this change isn't going to be another agency, it'll be in house, especially as the bigger companies start to rebuild their PR departments.”
 
There has always been tension between agency and in-house posts, with the latter enjoying a perception advantage that has intensified in the recession. “Even more so, there seems to be this belief that work is less stressful in house and compensation is better,” adds Butenhoff.
 
Shaky optimism
While few in the industry are definitively proclaiming that the worst is over, most say new business pipelines are substantially busier than they were early last year.
 
“When I talk to people, the first question is, ‘Where do you think this is all going?'” says PN's Stockman. “I think people across the industry are asking that question on a macro-economic level.”
 
The mass layoffs in 2009 have also reconfigured people's thinking about their jobs. The senior-level communications pro at the Fortune 10 company says, “Job security doesn't exist. You're now judged by your immediate performance.”
 
The market also has forced nearly everyone to think more entrepreneurially, and in most cases, work hard for their employers while also being savvy about their own future.
 
“The economy is getting better, but it's not there yet,” MWW's Kempner says. “And ultimately, the only person who can fire you is you. If you work hard and produce, there are opportunities.”
 
The PRWeek/Bloom Gross & Associates Salary Survey was conducted by CA Walker. E-mail notification was sent to approximately 24,592 PR pros and a survey link was posted to PRWeek's Web site and Facebook page and sent out through the PRWeek US Twitter feed.

A total of 1,007 PR pros completed the survey online between November 30 to December 14, 2009. Results aren't weighted and are statistically tested at a confidence level of 90%. Visit prweekus.com to purchase a Salary Survey Premium Edition.

The respondents

Number of people taking the survey
1,007

Gender
33% male; 67% female

Work setting
46% work for a PR agency; 25% in a corporate PR department; 8% for a nonprofit; 4% in education; 4% self-employed/freelance; 3% government; 2% trade association

Age
The median age of respondents was 37, with the largest percentage of respondents in the 26-30 bracket

Ethnicity
84% white/Caucasian; 5% black; 5% Asian; 4% Hispanic; 2% other

Education
In undergraduate degrees, PR (34%); journalism (18%); and liberal arts (12%) were the most popular majors. Of the respondents, 30% have master's degrees, 11% of which are in PR or communications

Experience
Respondents have an average of 11.3 years of experience

Work-life balance
Respondents work an average of 49.1 hours per week and get 17.3 days vacation per year

Boosting retention

Many firms have strengthened retention efforts to bring morale up, as well as to keep their top staffers from being poached. Among them:

Edelman
Revamped its educational program so that more of its staff could take courses,
seminars, and participate in continuing education.

Text 100
Instituted a new performance management system in August that is more focused on career development; relaunched its in-house training program under a new name, “Text Life,” with a stronger focus on global learnings that is open to all staff.

MWW Group
Paid limited bonuses, putting more resources into promotions and raises.

Porter Novelli
Brought back its chief talent officer position to make sure good talent is recruited and developed internally.

Access Communications
Increased bonuses for its staff.

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