Willott Kingston Smith’s survey of 200 marketing services companies
reveals that, for the first time, PR consultants are generating a
greater level of gross income per head than their counterparts in the
top 50 marketing services groups.
The report also suggests that these figures may reflect a move by PR
consultancies away from low value accounts and project work towards
larger strategic accounts. This is good news for the industry, and
indicates that consultancies might finally be moving some way towards
breaking the classic cycle of client overservicing.
The survey also shows that the number of staff being employed in the PR
industry has risen by 12 per cent to 4,555, while employment costs in PR
have increased less than the rate of inflation. This is an indicator of
short term gain, but shows that recruitment activity has mainly taken
place at a junior level. The industry is still dogged by a dearth of
experience PR managers.
Willott Kingston Smith estimates that, as a benchmark, companies should
spend half of their gross profit on staff costs. According to this
survey, the profit:investment-in-staff ratio on average still falls
below the recommended level. The findings also show that agencies have
only been recruiting in line with a rise in fee income.
Such prudence certainly cuts down on wastage, but in a growth industry
there is also a need to strike a balance between linking rises in staff
costs to income and recruiting for expansion. In order to maintain their
long term profitability, consultancies still need to spend to attract
and retain experienced staff.
