The Hidden Costs of In-House PR

I have seen several articles recently in the media about companies dispensing with their public relations firms and taking their public relations work in-house.  As a totally interested, completely biased owner of a public relations firm, I want to point out the negative consequences of this decision, which can be especially harmful for young companies and for foreign companies in the U.S. market.

The reasons are many and varied.  Let’s start with costs and human resources considerations. There has been a rise in the number of public relations agencies and in the size of the PR agency industry over the years just as budget cuts have forced corporate layoffs, exactly because it’s easier for companies to buy the services they need for limited contract periods rather than have employees on the payroll. They cut down on benefit, human resources and management expenses as well as office space costs. Meanwhile, PR agency compensation is less generous than most corporate PR/corporate communications comp.

Then there’s the issue of the level and quality of service PR companies provide versus what a company can do for itself with internal staff.  I speak now not for my whole industry, but for smaller PR agencies, which are known for their more experienced staff.  A company that replaces its PR agency with one or two internal PR staff is limited to the knowledge and experience level of those people. An agency brings a variety of people at different levels onto a client team, and there’s almost always more experience and expertise available to the company from the agency than what a company can afford to spend on internal staff.

Put it this way: a company that paid us $10,000 a month would receive, on average, about 60 hours a month of our time. You’re thinking, “Yes, but for $120,000 a year, I could get a pretty experienced person and I’d have 160 hours of his/her time.”  But $120,000 is not the actual cost of hiring a person whose salary is $120,000 – it covers the cost of someone who makes only about $55,000-60,000, due to expenses for hiring, benefits, payroll taxes, office space, office equipment, and extra work for a manager, and whoever does HR and cuts paychecks.  That pays for someone with only a few years of experience.

In addition, a full-time person doesn’t actually yield 160 hours a month.  After you subtract vacations, sick days, and unproductive time, you end up with about 120 hours a month.

“Yes, but that’s twice as many as you would give me for the money,” some of my readers are thinking.  However, I maintain that my experienced staff and I will provide a better outcome in half the time of someone with a few years of experience.

The reasons go beyond the experience level of my team. The internal staff person has problems and limitations that an external communications company doesn’t face. More on that in my next blog post!

Lucy Siegel

Tags: , , ,

4 Responses to “The Hidden Costs of In-House PR”

  1. The Top Four Questions About PR Billing Practices « BridgeBuzz Says:

    […] time and a couple hundred dollars an hour for newly minted lawyers.) As for doing PR internally, my blog post about the hidden costs of in-house PR shows that it’s a lot more expensive than most people […]

  2. networking groups Says:

    Highly descriptive article, I liked that a lot. Will there
    be a part 2?

  3. Bridge Global Strategies Says:

    Hi, in answer to your question, “will there be a part 2?”, I realize that we never did part 2! That’s something to address very soon. In the meantime, you may be interested in this post:

  4. 4 Advantages of a PR Agency Over In-house Staff | BridgeBuzz Says:

    […] couple of years ago I ended a blog post about the hidden costs of in-house PR with this thought, and I promised that I would one day expand on this theme.To that end, here is a […]

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: