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Employee vs. Marketing Agency the Real Cost Breakdown.png

Employee vs. Marketing Agency the Real Cost Breakdown

When you begin your inbound marketing journey you are going to need help. That's inevitable. One or two people simply cannot do it alone. So when you start to look for this help you will likely consider whether you should hire an internal employee or work with a marketing agency, specifically a HubSpot Partner Agency

Each absolutely has its pros and cons, but what about the cost? Is one really cheaper than the other? Is one more beneficial than the other? Which is right for your company? 

Let's look at the true costs of hiring vs. working with an inbound marketing agency.

Salary vs. Retainer

According to Glassdoor, the average salary for an Inbound Marketing Specialist is $50,390 per year. This will obviously fluctuate depending on your location, but it's probably a pretty good average throughout the United States.

With inbound marketing retainers ranging from $3,000 to $10,000 per month, we'll assume an average of $5,000 per month which equates to $60,000 per year

There you have it, hiring an employee is about $10,000 less expensive per year. Case closed. Or is it? Let's look at what else goes into this employee vs. retainer cost.

Benefits

While we would love for a client to offer it to us, we've never had a single client offer us benefits like paid time off, health insurance, or retirement. It's kind of rude if you ask us! 😉

So while you may not offer your inbound marketing agency benefits, you'll likely have to offer them to a new employee, especially if you want to attract high quality talent. According to the Bureau of Labor Statistics, employers are spending on average about 30% of an employee's salary on benefits. Sticking with that same $50,390 per year average salary, you're looking at $15,117 per year in benefits bringing your total cost (so far) for that new employee to $65,507.

The cost of the marketing agency is still at $60,000, unless of course you wanted to offer those benefits to us. 😉

Training & Continued Education

Not only do you want a new employee (should you choose to go that route), but you want a good employee. You want someone that knows their stuff and continues to get better and better, right? Well that's where training and continuing education come in. To get someone fully up to speed at HIVE, it takes approximately 8-12 months. There are a ton of moving parts within an inbound marketing campaign and knowledge in every piece of it is critical for an inbound marketing strategist at HIVE, even if they don't execute on every piece them self.

Assuming this new employee has a marketing background and/or degree, here are a few things that we believe have to go into the training of a new inbound marketing employee no matter what:

After all of this, you're looking at around 145 hours per year + $2,500 for the trip to Inbound, which is totally worth it by the way. Your team will come back bursting at the seams with excitement and new ideas. So assuming 40 hours per week for your employee at a $50,390 salary, that is $3,805 in training costs + $2,500 for Inbound for a total of $6,305 per year bringing the cost of an employee to $71,812 so far.

For a  marketing agency, it is their obligation to keep up with all of this training and even surpass what you would expect from an employee. Continued education has to be part of the daily life for an agency employee or the agency won't be around long. No extra costs here for the client. Working with an inbound agency is at $60,000.

Tools

There are so many amazing softwares out there for inbound marketers. Everything from email to project management to design to integration software. Let's look at the costs to add those softwares for your new employee:

  • Company email: $5/month = $60/year (we recommend G Suite)
  • Internal Communication: Free assuming a small company (we recommend Slack)
  • Time Tracking: $49/month = $588/year (we recommend HubStaff)
  • Graphic Design: $50/month = $600/year (Adobe Creative Cloud is a must)
  • Stock Photos: $29/month = $348/year (we recommend Envato Elements)
    Stealing images from Google is going to get you in trouble for copyright infringement. Just don't do it.
  • Integrations: $20/month = $240/year (we recommend Zapier)
    This is to make sure that all of your different softwares communicate seamlessly. Zapier makes that possible for thousands of different softwares. It's going to become necessary sooner rather than later.
  • Social Media Software: $129/month = $1,548/year (honestly, none of them do everything that you'll likely need, but the best of them is probably HootSuite)

We didn't include HubSpot or heat mapping software because you'd need them whether you hired an agency or an employee.

We also didn't include items like payroll, rent, phone, or time tracking because you likely are already paying for these things and you potentially wouldn't have to pay any more to add a new employee to them.

For a new employee, we've now added another $3,384 bringing the total so far to $75,196.

With an agency, like we mentioned above, you would still have the costs of HubSpot and heat mapping softwares, but those would be needed either way. No additional software is likely needed. The total remains at $60,000.

Taxes

In Colorado, we as employers pay 6.2% in Social Security + 1.45% in Medicare + 0.6% federal unemployment + 2.11% state unemployment. Altogether this equals 10.36% of the employee's salary. For that $50,390/year employee, you're likely paying about $5,220 per year in taxes bringing the total to $80,416.

When you work with an agency you pay a whopping $0 extra for taxes. Still at $60,000. The fun of paying those taxes is on agency.

Final Numbers

Hiring an Employee: $80,416

Hiring a Marketing Agency: $60,000

Of course we can get much more in-depth with this calculation. We didn't add in things like office space, furniture, utilities, bonuses, travel, meals and entertainment, internet, phone, gifts, etc, but just based on these higher level items we can see that your $50,390 employee that you may have viewed as a less expensive option to hiring an agency in reality costs $30,000+ more per year than their salary taking them to around an $80,000/year cost or around $20,000 more per year than that $5,000 per month retainer.

Of course, we are a little biased here since we are an inbound marketing agency, but the numbers are pretty clear. While a $5,000/month price tag may seem like a big expense, it's actually far more economical than hiring the average inbound marketer.

Plus, we're not average, which leads me into my last point...

Expertise

Outside of the numbers, one of the biggest things to consider with the decision to hire an employee or an inbound marketing agency is expertise and experience. 

With a single hire, you're likely asking that person to wear many hats in your inbound marketing campaign. They're likely responsible for email, social media, blogging, and even things like website development and graphic design, amongst others. With that much on their plate, you're requiring them to learn everything, but they never get a chance to master anything.

With an agency, you get a team. You get people who have mastered their tasks. The email work is done by someone who specializes in email. The website development and coding is done by a developer. The design is done by a graphic designer. Each of these people have been able to specialize and become great in their task.

So, not only are you truly saving around $20,000 per year, but you're getting a team of experts instead of one jack of all trades.

The numbers really don't lie.

Of course there are additional benefits of hiring (schedule control, having them in the office, no contract, etc.) that we didn't cover, but no matter which route you ultimately choose, one thing that is clear is that in order to compete online today, you have to participate in inbound marketing.

If you're just getting started, check out our FREE Inbound 101 eBook to get a good initial knowledge of what inbound marketing is and why it's important.

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