Marc Hausman isn't afraid to use the 'B' word to describe the prospects for the PR industry now that the economy has started to percolate following four sluggish years.
No, not that one.
"I'm bullish," said Hausman, president-CEO of Strategic Communications Group Inc., a Silver Spring, Md.-based PR consultancy specializing in the technology sector, whose
clients include Americom Government Services, COMSYS and Juniper Networks. "We're heading in the right direction, with a lot of potential for new clients in the pipeline."
With an improved outlook on business, Hausman has been in a hiring mode this year. After cutting down to 10 employees amid the recession - he had 40 staffers at the height of
the Internet boom - Hausman's firm now has 30 workers, with room for three more senior-level PR execs.
Asked if he intends to pay the senior-level execs the same amount in salary he paid during the salad days of the late 1990s, Hausman said, "Absolutely. These are six-figure
salaries...It's like [Advertising pioneer] David Ogilvy once said, 'You pay people peanuts, you get monkeys.' [PR] has to make certain investments today to take advantage of
growth tomorrow and that's a scary thing."
Jerry Schwartz, president of New York-based G.S. Schwartz & Co., (and a PR NEWS board member), has hired six employees this year at the junior to mid-level. He says he pays
competitive salaries, but admits that after "compensation ran so high during the boom so, like the stock market, it had to go the other way." Still, "you can't cut salaries
wholesale. We pay what we need to pay." Schwartz continues to selectively offer stock options to people "who can demonstrate to management that they're in it for the long
haul."
While Hausman and Schwartz insist they're paying competitive salaries, the annual increase in pay for both corporate and agency execs overall has been nothing to write home
about.
"The whole dot-com mentality is over," said Lisa Ryan, senior VP and managing director at New York-based Heyman Associates, one of the top executive search firms specializing
in communications, public relations and marketing, mostly for Fortune 500 companies. "There have been some increases in salary, but not huge. [The industry] is looking for people
who want to be in it for the long-term and not just increase their salaries."
Ryan said the hot areas in corporate PR right now are healthcare - a recession-proof business if there ever was one - investor relations and internal communications. "But it's
not just about writing speeches, but getting out there with your CEO," she said.
PR agencies, after being whipsawed by the economy in the last few years, are finally starting to rebuild their staffs. But they're moving with a high degree of caution. Why?
Several reasons. For one, PR agency reps continue to get squeezed by their corporate counterparts who, in turn, increasingly have to answer to procurement gods who view ordering
professional services the same way they do paper clips (read: the lowest possible price). Second, although consumers continue to tune out ads of all kinds, PR still takes a
backseat to advertising when it comes down to divvying up the marketing pie. What's more, there's still between a 30% and 50% turnover rate at most PR agencies, said Mike Marino,
a New York-based consultant, who recruits for many PR firms in the U.S. and Canada, including Euro RSCG and Porter Novelli, as well as the Public Relations Society of America
(PRSA).
"They want to fill the slots as quickly and cheaply as possible. They're nervous to have high earners," Marino said. This presents a nasty problem for agencies because there's
an increasing demand throughout corporate America for more PR specialists. And without more specialists, agency fees will continue to be truncated. The onus, as usual, falls on
agencies.
Hausman concedes his biggest challenge right now is to find people who are able to understand the context of what his clients want, as opposed to just knocking out press
releases. "I can put an ad on monster.com and within a few days find 500 people who can write a great press release," he said. "The trouble is finding people who can look at a
client and say, 'Here's how you fit into the larger market.'"
Schwartz amplified Hausman concerns. "The difficulty facing us today and going forward is how do we attract bright and talented people -- and keep them," he said. "If the
industry is going to get high-level assignments from corporate clients -- and the confidence that comes along with it -- you need bright and talented people."
Helene Solomon, president-CEO of SolomonMcCown & Company, a Boston-based PR firm, recently appeared in the lead story on NBC Nightly News to demonstrate that jobs are
coming back. In June, Solomon brought in a marketing assistant, account coordinator and account supervisor, and is currently in the market for three more mid-level positions.
Solomon admits she's not seeing much movement at the senior level. "They have a passion but it takes a long time to acquire strategic skills," said Solomon (who is also a PR NEWS
board member). PR agencies "can be compared to law firms since a first-year associate may not get to be a partner until she's been there 8, 12 or 14 years."
Solomon stressed there's still a good deal of caution on hiring, because of declining fees from corporate clients. And that'll go on so long as agencies fail to provide their
clients with high-end executives who can think strategically. It's not a Catch-22, since, unlike a draw, somebody wins and somebody loses, and it's the agencies that'll come up
short every time.
Marino said many PR firms "say they're strategic but if they're not loading up with senior-level talent that they're not a strategic firm. The superstars eventually get wind of
this, leave and the company is left with mediocrities."
One solution is for agencies to run their companies more like businesses. "They're so knee-jerk. They lose a client, they fire someone. They gain a client, they bring in some
warm bodies. That really doesn't go anywhere," Marino adds. "Agencies need to find candidates who fits their price points rather than just saying, "We need an A.E. tomorrow and
lets offer double what he's making' without first checking the budget."
Contacts: Marc Hausman, 301.408.4500, [email protected]; Mike Marino, 212.980.1859, [email protected]; Lisa Ryan, 212.784.2705, [email protected]; Jerry Schwartz,
212.725.4500, [email protected]; Helene Solomon, 617.933.5016, [email protected]
| 2003 Corporate Marketing & Communications Compensation Survey | |
|---|---|
| Title | Median Total Cash Compensation* |
| Vice President, Corporate Communications |
$185,900
|
| Corporate Communications Manager |
$104,300
|
| Media Relations Manager |
$101,200
|
| Public Relations Manager |
$72,800
|
| Community Relations Manager |
$94,700
|
| Director, Special Events |
$85,100
|
|
* Median total cash compensation includes base salary and annual incentive. |
|