When a small business owner is looking to expand their marketing efforts, they’re faced with an inevitable decision: should we keep our marketing in house, or hire an agency?
One commonly heard deterrent to hiring an agency is that they’re “expensive”–especially if you’re looking at an agency that really knows what they’re doing. Obviously, we’ve got a horse in this race, but any bias aside, hiring an agency is often not only a better financial decision than hiring an employee…it’s a better strategic decision as well.
Why? Read on to find out:
It makes more money sense
This is often the part that business owners find hardest to believe, so we’re going to start here. Typically, when business owners are doing a cost/benefit analysis of hiring an employee vs. working with an agency, they forget to factor in for the hidden costs that come with an employee, and just compare a base salary to an hourly quote or a monthly retainer quote from an agency.
This is a mistake. Those aforementioned hidden costs add up, and they include:
- The cost of recruiting, including the time you or your current employees will spend writing and placing the job ad, reviewing resumes, conducting interviews and any pre-employment assessment tests, and drug screens or background checks.
- The cost of training, which a 2007 report from Training magazine showed as being $1,200 annually per employee on average.
- The cost of benefits, including but not limited to social security, healthcare, 401k, paid time off, life insurance, and disability benefits.
Recruiting and training are especially expensive if it’s a bad hire and the employee doesn’t work out. FastCompany reports that a staggering 41% of companies said that a bad hire has cost them $25,000 in the last year. And a decent chunk of those bad hires, at 21% (or as high as 36%, according to another survey), happened because the company didn’t test or evaluate the candidate’s skills thoroughly enough–and unless you have a strong marketing background yourself, it can be difficult to evaluate the candidate’s skills and knowledge when it comes to marketing.
As far as the cost of benefits is concerned, the salary plus benefits for a new employee usually totals to be 1.25-1.4 times the base salary. Of course, the average salary for marketing professionals is going to vary based on age, experience, and your location, but just to give you a sample range.
- For a marketing coordinator (1-3 years of experience), Glassdoor states that salaries typically range from $34,000 to $59,000, with a national average of $44,609. At the low-end of the range, that makes the total cost of salary plus benefits $42,500 to $47,600. For the national average, the cost is $55,761 to $62,452.
- For a marketing manager (the experience range is wide for this title, but you’re looking at at least 5 years), Glassdoor says that salaries typically range from $72,000 to 132,000, with a national average of $98,000. On the low-end, that means that total cost of salary plus benefits for a marketing manager is $90,000 to 100,000 a year. At the national average salary, the cost is $122,500 to $137,200.
And those numbers don’t take into account the potentially wasted time and money of a bad hire, if said marketing coordinator or marketing manager didn’t work out.
By contrast, when you hire a marketing agency, you’re not working with entry-level employees that only have one or two years of experience. You get a whole team of experienced professionals at your service.
It leaves less “weak links” in the chain
You can hire the most talented, qualified marketing person in the world, who singlehandedly constructs and executes campaigns that get amazing results. But what happens if they get sick, have to move, decide to change careers, or just plain leave your company unexpectedly? Your marketing is hamstrung as a result, and you have to start the hiring process all over again (which can be expensive and time-consuming, as we’ve already covered). Meanwhile, your marketing efforts stall out because you’re trying to find someone to fill the gap…which often results in less business, to boot.
Comparatively, the chances of your entire marketing agency up and leaving are quite small. Even if they have one employee leave, they’ve got a whole team to pick up the slack–something that only applies to your business if you have an entire marketing department at your disposal, which most small businesses don’t have the luxury of.
We’ve all heard the old adage, “don’t put all your eggs in one basket,” and when you rely on one person to do all of your marketing, that’s exactly what you’re doing.
It gives you access to more talent for the same cost
We’ve all see those job listings that want someone who’s a brilliant content strategist and a great writer and also knows SEO and is well-versed in PPC advertising and they’re a social media maven…and scoffed at our computer screen as we read it. Why? Because that doesn’t exist in one person. It just doesn’t. If someone says they can do all of those things (and do them well), they’re either lying or they’ve got some delusions of grandeur. (The rare unicorns that do have that skill set are usually working at startups as “growth hackers,” with an exorbitant salary to match.)
As a business owner, you have a decision to make. You can either:
- Spend a lot of time and effort researching marketing in general, current trends in the marketing industry, marketing as it applies to your industry, and which marketing techniques should work best for your industry. And then, after all that research, hire a professional that specializes in those marketing techniques, while crossing your fingers that, number one, they’re good at their job, and number two, your research led you in the right direction.
- Find a qualified marketing agency that impresses you with their intelligence, credentials, and track record, and treats you with respect as a client. Then work with them.
A team is going to be able to address any marketing needs you have much more effectively than one person running around like a chicken with its head cut off. And, as we’ve already covered, you’ll spend the same amount (or less) when working with an agency…which means you’re getting quite a bit more bang for your buck.
Throughout this article, we’ve been discussing a marketing agency vs. a marketing person, but these points can apply just as well when it comes to other hires. Working with an accounting or bookkeeping agency could make more sense for you than hiring one accountant or bookkeeper, for example, or working with a virtual assistant firm instead of hiring a full-time administrative assistant.
Each situation is different, but business models are changing, with freelancers and contract workers on the rise, and a new way of doing business is emerging–the lightweight, flexible business that doesn’t hire a full-time employee until it’s absolutely necessary to do so. And of course, if you decide to go the agency route for your marketing, we’re here to help.