Thursday 12th MayPRCA Annual Conference on Consultancy Management
Benchmarking Results 2005
PRCA Benchmark Survey 2005 - Confidential
PRCA Benchmarking SurveyHugh Birley & Richard Houghton
Thursday 12th MayPRCA Annual Conference on Consultancy Management
5th annual PR industry benchmarking survey by Consensus Research
Three elements in survey– 82 MD/CEOs (59%
response)– 66 Finance Directors (48%)– 66 HR Directors (48%)
Methodology
PRCA Benchmark Survey 2005 - Confidential
PRCA Benchmarking SurveyHugh Birley & Richard Houghton
Thursday 12th MayPRCA Annual Conference on Consultancy Management
Optimism returning
PRCA Benchmark Survey 2005 - Confidential
PRCA Benchmarking SurveyHugh Birley & Richard Houghton
Thursday 12th MayPRCA Annual Conference on Consultancy Management
PR Industry outlook for next 12 months
2%
35%
3%
52%
64%
14%
2003
2004
2005
Get worse Improve
Q11 Base: 82 MDs/CEOs PRCA Benchmark Survey 2005 - Confidential
PRCA Benchmarking SurveyHugh Birley & Richard Houghton
Thursday 12th MayPRCA Annual Conference on Consultancy Management
Q3 Base: 82 MDs/CEOs
Anticipated change in income 03 vs. 04 vs. 05
PRCA Benchmark Survey 2005 - Confidential
PRCA Benchmarking SurveyHugh Birley & Richard Houghton
Thursday 12th MayPRCA Annual Conference on Consultancy Management
Q3 Base: 82 MDs/CEOs
Anticipated change in income 03 vs. 04 vs. 05
PRCA Benchmark Survey 2005 - Confidential
PRCA Benchmarking SurveyHugh Birley & Richard Houghton
Thursday 12th MayPRCA Annual Conference on Consultancy Management
Q3 Base: 82 MDs/CEOs
Anticipated change in income 03 vs. 04 vs. 05
PRCA Benchmark Survey 2005 - Confidential
PRCA Benchmarking SurveyHugh Birley & Richard Houghton
Thursday 12th MayPRCA Annual Conference on Consultancy Management
Q4 Base: 82 MDs/CEOs
Anticipated change in operating margin 03 vs. 04 vs. 05
PRCA Benchmark Survey 2005 - Confidential
PRCA Benchmarking SurveyHugh Birley & Richard Houghton
Thursday 12th MayPRCA Annual Conference on Consultancy Management
Q4 Base: 82 MDs/CEOs
Anticipated change in operating margin 03 vs. 04 vs. 05
PRCA Benchmark Survey 2005 - Confidential
PRCA Benchmarking SurveyHugh Birley & Richard Houghton
Thursday 12th MayPRCA Annual Conference on Consultancy Management
Q4 Base: 82 MDs/CEOs
Anticipated change in operating margin 03 vs. 04 vs. 05
PRCA Benchmark Survey 2005 - Confidential
PRCA Benchmarking SurveyHugh Birley & Richard Houghton
Thursday 12th MayPRCA Annual Conference on Consultancy Management
Income forecasts 2004 vs actual income growth 2004
Forecast for 2004 survey - MDs
Actual growth in 2004 - FDs
All : +11% All : 0%
Small : +15%
Medium: +12%
Large: +9%
Very Large: +3%
Small: +14%
Medium: +5%
Large: -2%
Very Large: +3%
Base: 82 MDs/CEOs, 66 FDs PRCA Benchmark Survey 2005 -
Confidential
PRCA Benchmarking SurveyHugh Birley & Richard Houghton
Thursday 12th MayPRCA Annual Conference on Consultancy Management
Reporting year 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004
Income growth 21% 10% -1% -2% 0%
Net pre-tax profit growth 25% -21% -11% 18% 17%
(NB – basket of consultancies changes each year) Reported growth over time
Base: Q2, 66 FDs PRCA Benchmark Survey 2005 - Confidential
PRCA Benchmarking SurveyHugh Birley & Richard Houghton
Thursday 12th MayPRCA Annual Conference on Consultancy Management
So what problems associated with growth?
PRCA Benchmark Survey 2005 - Confidential
PRCA Benchmarking SurveyHugh Birley & Richard Houghton
Thursday 12th MayPRCA Annual Conference on Consultancy Management
• Salary inflation • Over-servicing• Recruitment/churn costs
Maintaining Profitability
PRCA Benchmark Survey 2005 - Confidential
PRCA Benchmarking SurveyHugh Birley & Richard Houghton
Thursday 12th MayPRCA Annual Conference on Consultancy Management
Base: Q6, 66 HRDs
Average salary increases and bonuses – over time
6%
10%
5%
6%
7%
9%
3%
8%
3%
5%
6%
7%
1999 2000 2001 2002 2003 2004
% Annual salaryincrease
Bonus as % ofannual salary
PRCA Benchmark Survey 2005 - Confidential
PRCA Benchmarking SurveyHugh Birley & Richard Houghton
Thursday 12th MayPRCA Annual Conference on Consultancy Management
Survey year 2000 2001 2002 2003 2004 2005
Over-servicing rate (as proportion of total net income)
22% 21% 21% 27% 26% 22%
Over-servicing rate over time
Base: Q8, 66FDs PRCA Benchmark Survey 2005 - Confidential
PRCA Benchmarking SurveyHugh Birley & Richard Houghton
Thursday 12th MayPRCA Annual Conference on Consultancy Management
Survey year 2000 2001 2002 2003 2004 2005
% of business on retainer
75% 80% 76% 80% 77% 79%
% of business project work
Not asked
Not asked
Not asked
25% 25% 25%
NB: includes some double counting, so %s add to more than 100
Retainer work vs project work over time
Base: Q3/Q4, 66 FDs PRCA Benchmark Survey 2005 - Confidential
PRCA Benchmarking SurveyHugh Birley & Richard Houghton
Thursday 12th MayPRCA Annual Conference on Consultancy Management
Survey year 2001 2002 2003 2004 2005
% offering performance related deals to clients
Not asked
19% 29% 27% 36%
NB: asked as “payment by results” in 2004 survey
Previously asked as “performance related pricing”
Performance related pricing over time
Base: Q17, 66 FDs
PRCA Benchmark Survey 2005 - Confidential
PRCA Benchmarking SurveyHugh Birley & Richard Houghton
Thursday 12th MayPRCA Annual Conference on Consultancy Management
• Incentives and benefits• Recruitment
Staff retention and recruitment
PRCA Benchmark Survey 2005 - Confidential
PRCA Benchmarking SurveyHugh Birley & Richard Houghton
Thursday 12th MayPRCA Annual Conference on Consultancy Management
Churn by consultancy size (excluding redundancies)
Base: Q2, 66 HRDs
PRCA Benchmark Survey 2005 - Confidential
PRCA Benchmarking SurveyHugh Birley & Richard Houghton
Thursday 12th MayPRCA Annual Conference on Consultancy Management
Churn by consultancy size (excluding redundancies)
Base: Q2, 66 HRDs
PRCA Benchmark Survey 2005 - Confidential
PRCA Benchmarking SurveyHugh Birley & Richard Houghton
Thursday 12th MayPRCA Annual Conference on Consultancy Management
Churn by consultancy size (excluding redundancies)
Base: Q2, 66 HRDs
PRCA Benchmark Survey 2005 - Confidential
PRCA Benchmarking SurveyHugh Birley & Richard Houghton
Thursday 12th MayPRCA Annual Conference on Consultancy Management
31%
9%
8%
24%
2%
4%
11%
30%
19%
3%Did not return frommat/pat leave
Complete careerchange
Freelance/Consultant
Moved to in houseposition
Moved to newconsultancy
2005
2004
Next career moves
Base: Q3, 66HRDs PRCA Benchmark Survey 2005 - Confidential
PRCA Benchmarking SurveyHugh Birley & Richard Houghton
Thursday 12th MayPRCA Annual Conference on Consultancy Management
13%
7%
4%
6%
14%
10%
8%
14%
11%
26%
21%
18%
17%
12%Profits share
Personal performance bonuses
Bonus based on co. performance
Commission for new staff
Commission for new business
PMI
Low/ no interest loans
2004 2005
% = proportion introducing benefit in past 12 months
Financial package
Performance-related
Benefits introduced in past year
Q11b Base: 66 HRDs PRCA Benchmark Survey 2005 - Confidential
PRCA Benchmarking SurveyHugh Birley & Richard Houghton
Thursday 12th MayPRCA Annual Conference on Consultancy Management
1%
6%
4%
11%
4%
4%
13%
6%
11%
11%
17%
23%
24%
26%
12%
15%
Gym membership
Wellbeing programmes
Company mobiles
Special days (e.g. duvet days)
Company laptops
Free drinks sessions
Education sponsorship
Professional body/ journal subs
2004 2005
% = proportion introducing benefit in past 12 months
Career-related
Lifestyle-related
Benefits introduced in past year
Q11b Base: 66 HRDs PRCA Benchmark Survey 2005 - Confidential
PRCA Benchmarking SurveyHugh Birley & Richard Houghton
Thursday 12th MayPRCA Annual Conference on Consultancy Management
7%
63%
75%
14%
3%
77%
10%
74%
Don't know/ not clear
Reduction throughnon-replacement
Likely to be recruitingsenior staff
Likely to be recruitingjunior staff
2005
2004
Employment outlook for next 12 months
Base: Q29, 66 HRDs
PRCA Benchmark Survey 2005 - Confidential
PRCA Benchmarking SurveyHugh Birley & Richard Houghton
Thursday 12th MayPRCA Annual Conference on Consultancy Management
ISSUE PRCA SERVICE
1. Income growth •AM training-commercial skills•CMS •Core competencies for new business directors•Post pitch questionnaire •Preview
Profitability
PRCA Benchmark Survey 2005 - Confidential
PRCA Benchmarking SurveyHugh Birley & Richard Houghton
Thursday 12th MayPRCA Annual Conference on Consultancy Management
ISSUE PRCA SERVICE
1. Income growth •AM training-commercial skills•CMS •Core competencies for new business directors•Post pitch questionnaire •Preview
2. Margins •CMS•Best Practice commercial guidelines
Profitability
PRCA Benchmark Survey 2005 - Confidential
PRCA Benchmarking SurveyHugh Birley & Richard Houghton
Thursday 12th MayPRCA Annual Conference on Consultancy Management
ISSUE PRCA SERVICE
1. Income growth •AM training-commercial skills•CMS •Core competencies for new business directors•Post pitch questionnaire •Preview
2. Margins •CMS•Best Practice commercial guidelines
3. Over-servicing •Standard contract•Negotiation skills training•Benchmarking survey•Procurement professionals •Guide to transparent relationships (ISBA)•CMS
Profitability
PRCA Benchmark Survey 2005 - Confidential
PRCA Benchmarking SurveyHugh Birley & Richard Houghton
Thursday 12th MayPRCA Annual Conference on Consultancy Management
ISSUE PRCA SERVICE
1. Income growth •AM training-commercial skills•CMS •Core competencies for new business directors•Post pitch questionnaire •Preview
2. Margins •CMS•Best Practice commercial guidelines
3. Over-servicing •Standard contract•Negotiation skills training•Benchmarking survey•Procurement professionals •Guide to transparent relationships (ISBA)•CMS
4. Performance related fee agreements
•ISBA endorsed guidelines on structuring performance related pricing
Profitability
PRCA Benchmark Survey 2005 - Confidential
PRCA Benchmarking SurveyHugh Birley & Richard Houghton
Thursday 12th MayPRCA Annual Conference on Consultancy Management
ISSUE PRCA SERVICE
1. Salary • Benchmarking survey
People
PRCA Benchmark Survey 2005 - Confidential
PRCA Benchmarking SurveyHugh Birley & Richard Houghton
Thursday 12th MayPRCA Annual Conference on Consultancy Management
ISSUE PRCA SERVICE
1. Salary • Benchmarking survey
2. Staff retention • Frontline breakfast seminars - 580 attended 2004• Research into AD and Associate Directors attitudes• Conferences on career development, work life balance
People
PRCA Benchmark Survey 2005 - Confidential
PRCA Benchmarking SurveyHugh Birley & Richard Houghton
Thursday 12th MayPRCA Annual Conference on Consultancy Management
ISSUE PRCA SERVICE
1. Salary • Benchmarking survey
2. Staff retention • Frontline breakfast seminars - 580 attended 2004• Research into AD and Associate Directors attitudes• Conferences on career development, work life balance
3. Staff recruitment • Guidelines for using recruitment agencies • Employment contract templates • Core competencies - Board Directors, ADs, AMs and AEs • Web chats
People
PRCA Benchmark Survey 2005 - Confidential
PRCA Benchmarking SurveyHugh Birley & Richard Houghton
Thursday 12th MayPRCA Annual Conference on Consultancy Management
PRCA Benchmark Survey 2005 - Confidential
Conclusions and suggestions Take advantage of economic/market improvement
Beware erosion of profitability - recruitment, salaries and benefits 1% improvement in all areas
- Staff
- Client handling
- Marketing
- Sales
- Financial
Use information and expertise available at www.prca.org.uk
Enjoy rest of the day, including:
- Financial management
- Talent time bomb
PRCA Benchmark Survey 2005 - Confidential
PRCA Benchmarking SurveyHugh Birley & Richard Houghton