Mark it as another sign of recovery in the post-COVID economy. Senior executives stationed at North American PR agencies increased their hourly billing rates in 2021, even as average billing rates for many firms remained relatively flat, according to results from an annual survey conducted by PR merger and acquisition consultancy Gould+Partners.
The Gould+Partners’ report, which focused on the hourly billing rates and staff utilization at agencies by size, region and specialty, found that the average hourly billing rate for PR agency president/CEOs was $422 in 2021, up from 2020’s $417. EVPs and SVPs charged $371 per hour last year, compared to $366 the year prior.
Meanwhile, the average billing rate for PR agencies—for firms that charge one hourly rate or utilize a monthly retainer for all staff—remained relatively flat, inching down slightly to $232 per hour in 2021 from $240 in 2020.
According to the report, average hourly president/CEO billing rates increased most dramatically at firms bringing in between $10–$25 million in net revenues annually, whose chiefs charged an average of $439 per hour in 2021, a massive leap from 2020’s $388 per hour. Chief executives at the largest PR shops—or agencies boasting more than $25 million annually—also saw their average hourly rates go up last year, billing an average of $492 in 2021, compared to $483 in 2020. Presidents/CEOs at firms with net revenues between $3–$10 million also saw an uptick, at $414 per hour on average in 2021, compared to $400 in 2020. Even presidents/CEOs at the smallest firms polled—those with under $3 million in net revenues—billed at an average hourly rate of $338 last year, up from the average $307 they billed in 2020.
Not all PR staff increased their billing rates last year. VPs charged $319 in 2021, which was flat from 2020, and account managers billed $257 per hour, almost the same as 2020’s $256 per hour. Billing for senior account executives was also slightly down last year, at $215 per hour compared to 2020’s $217. Account executives were up, on the other hand, billing at $183 in 2021 versus 2020’s $179; and account coordinators were also up, charging $149 versus 2020's $143.
“My takeaway from this is that the PR industry has completely recovered from the pandemic and is on a trajectory for a spike in growth and profitability,” Gould+Partners managing partner Rick Gould told O’Dwyer’s. “The increase in billing rates confirms this. There is a confidence level with the firms today that allows firms to raise billing rates as they increase salary levels.”
Despite the major increases in billing rates among firms, the survey also discovered that the utilization rate among PR staffers, or the metric by which productivity is measured, was largely down among North American PR agencies. For example, account executives last year billed out only 84.3 percent of their theoretical yearly capacity of 1,700 hours, below optimal levels and down from 86.5 percent in 2020. President/CEOs, account managers, senior account execs. and account coordinators also billed out fewer hours last year. Only EVPs/SVPs and VPs billed out a higher percentage of their theoretical yearly hours last year than the year before.
Finally, the Gould+Partners report found that chief executives at PR firms stationed in the New York / New Jersey region billed, on average, far more per hour than agencies in other parts of the country, followed by firms located in the Washington, D.C. area; the U.S. Northeast; the Midwest; Canada; California; the Southeast; and the Southwest.
Gould+Partners’ 2022 Billing Rates/Utilization report was based on responses from 40 “prominent, best of class” North American PR agencies." Responses were collected in May.