Average hourly rates were down for PR professionals stationed across various agency staff positions last year, according to a new report released by New York-based merger and acquisition consultancy Gould+Partners.
Gould+Partners’ report, which profiled billing rates and staff utilization at agencies by size, region and specialty, suggests most PR professionals didn’t increase their hourly rates last year, and in many cases, actually lowered them.
Presidents and CEOs stationed at North American PR agencies billed at an average rate of $354 an hour in 2016, compared to $355 an hour in 2015. The downturn appears among chief executive billing rates across the board: for agencies with less than $3 million in revenues, CEOs billed an average of $272 per hour last year (compared to $301 in 2015); CEOs at agencies with revenues between $10 and $25 million billed $379 per hour in 2016, compared to $426 in 2015.
The exception to this trend seems to exist at the top. At agencies making at least $25 million in net annual revenues, CEO billing rates averaged $486 per hour in 2016, up from $448 the year prior. Likewise, for chiefs stationed at agencies netting between $3-$10 million, average hourly rates were also up, from $344 to $360.
On the other end of the spectrum, billing rates were similarly down for many account executives. At agencies accounting for less than $3 million in net annual revenues, average account executive billing was $131 an hour in 2016, compared to $137 in 2015. Agencies making between $10 and $25 million saw average account executive billing rates of $168 last year, compared to $170 the year before.
Once again, however, account executives stationed at agencies making more than $25 million in net annual revenues were outliers, and experienced an uptick in average billing rates in 2016, to $177 from $171 in 2015.
Average billing rates were also up widely for professionals stationed in senior/executive vice president and vice president ranks: senior and executive VPs billed an average of $324 an hour in 2016, compared to $315 per hour the year prior, and VPs billed $273 an hour in 2016, versus $269 in 2015.
The regions where PR billing rates appeared to take the hardest hits involved agencies located in the U.S. Midwest, Southeast and Northeast. Billing rates were largely up in the New York / New Jersey area, as well as in Canada and across both Northern and Southern California.
In terms of PR specialties, billing rates among healthcare, tech, finance, public affairs, professional services and crisis practices saw the steepest declines. Billings for digital, travel, beauty/fashion and consumer made noted gains.
The utilization rate among PR staffers, the metric by which productivity is measured, also remains below optimal levels across the board, according to the report.
Account executives are billing out only about 84 percent of their theoretical yearly capacity of 1,700 hours, according to the survey, compared to 89 percent in 2015. For CEOs — who typically see much of their time taken up with management and new business responsibilities — average utilization in 2016 was 33 percent, down from 36.2 percent the year prior. VPs revealed the only average utilization gains last year, billing out 67.3 percent of their time, compared to 67.1 percent in 2015.
The findings follow an annual Best Practices Benchmarking Report issued by Gould+Partners in June, which showed that the average profitability of PR agencies slipped last year to 15.2 percent, compared to 15.3 percent in 2015 and 16.2 percent in 2014.
Gould+Partners’ Billing Rates & Utilization report was based on responses from more than 100 prominent PR agencies throughout the United States and Canada.