If you’re debating between hiring a public relations department – whether it's a department of one or multiple employees, be aware that the true cost of staffing a PR professional greatly exceeds his or her salary.
Additional costs include
Whether you choose to take a risk on employing and operating an effective PR department or attempt to get by on the cheap by hiring only one person, the expenses and risks add up quickly.
Add those expenses together and you may find that you'd be better serve by investing your budget in a professional PR firm like Axia Public Relations vs. employees.
Large corporations will require an even larger PR staff to manage their multi-industry verticals and geographic locations. According to the University of Southern California-Annenberg, the more PR staff a company has on payroll, the more that company depends on the outside PR firms. (Another reason to reconsider an internal PR department.)
"Do what you do best and outsource the rest." – Bill Gates
For our clients, we are typically working in teams of three or more - a strategist, account manager, PR writer, blogger, social media manager, media pitcher/booker, copyeditor and an assistant. In addition, other members of our PR agency team jump into to help as needed with special projects, previous experience, unique expertise or to make valuable introductions among their business and media relationships.
According to the U.S. Bureau of Labor Statistics, the median annual wage of public relations managers is $91,810. The median salary of PR specialists is $57,550. Public relations is one of the fastest-growing job sectors. Out-of-work, talented PR pros are rare and unlikely to accept jobs that pay less than market value. If they do, you should adjust your expectations accordingly.
Recruiting and training
Include general ledger expenses like position advertising, staff or staffing firm time and cost of reviewing resumes, conducting several interviews, reference and background checks, and new-employee orientation and training – multiplied for every new hire, including the ones that don't work out. Don't overlook the cost of inefficiency and low productivity while a position is vacant. Also consider the liability associated with new hires. What if this person is a bad hire? If you fire him/her, you will likely see an increase in unemployment taxes. Then there's worker’s comp, pre-existing condidtions and benefits costs as well as on-going professional development training.
The Institute for Research on Labor and Employment at the University of California at Berkeley found that “turnover costs for a manager average 150 percent of salary.” Feel free to adjust our numbers to match your own experience with hiring new professionals.
Payroll taxes (10-28 percent)
Most employers pay a sum equivalent to more than 15 percent of an employee's salary for payroll taxes that include FICA (Social Security: about 6.2 percent and Medicare: about 1.45 percent), FUTA (Federal Unemployment Taxes: 0.5 percent) and SUI (State Unemployment Taxes: about 0.45–13.5 percent), Workers Comp (about 0.42–5 percent) and local and state payroll taxes (about 0–2 percent). If payroll taxes are more or less in your area, adjust the tax percentage to match your payroll tax expenses.
Benefits (30 percent)
Benefits include PTO (sick days, vacation, personal days), insurance (health, dental, disability, and life) and retirement (401(k), IRS), etc. According to the U.S. Department of Labor, benefits usually cost an employer an additional 30 percent of an employee’s salary. Change our numbers to match your own benefit costs.
Bonuses, Raises and COLAs (5-20 percent)
Beyond base salaries and benefits, you'll have annual salary increases from cost of living adjustments (COLA), annual raises, bonuses, training and more.
Office space, furnishings and supplies
Office space should include rent (225–250 square feet per employee when you add in common space), usually at $15–$50 per square foot, plus desks, chairs, trash cans, and office supplies staplers and paperclip holders.
Technology & Software
Technology includes computers, printers, software, desk phones, wireless phones, internet access, and other tech/office equipment.
Media Contact Databases
Databases with contact information for influential reporters, editors, producers and bloggers are essential for a PR campaign. The best databases available can cost in excess of $50,000, and all databases must be updated regularly. Expect to invest $4,000 per year for a minimal database. Plus you'll need to hire one employee to manage the database, pull media lists and reports and/or develop your media database.
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