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Staff Billing Rates

We use staff rates to do our billing, and although I have calculated our direct cost for each employee and triple it to get to the billing rate, some of the rates seem really low to me.

Could people please share what their billing rates are for specific positions? The ones I'm interested in are: Creative/Art Director, Graphic Designer, Production Artist, Account Executive and Production Manager.

Also, do you charge the same billing rate for the position regardless of what the actual employee cost is, i.e. if we have 3 production artists who are at different salaries due to level of experience, seniority, etc., it seems that they should be billed at the same rate, even though their cost may be different. We're not doing it that way now, but I'd like to know how people handle this issue.

Thanks for your input!

Catherine Colangelo The Phillips Agency

Generally for the positions you're talking about we would bill between $75 & $200. Our owners bill out at higher rates, but tend to comp a lot of time. Generally the same position will bill at the same rate despite some salary differences. However, a "junior" whatever will bill at a lower rate even though their ultimate output may look much the same -- we figure more supervision, probably more work time to get the same result, less background of ideas in the person's head, etc.

I think you'll find rates vary a lot regionally. We, for instance, are located right along the coast in L.A. I know from previous work as a software consultant to the legal industry that rates for the consulting work, as well as the legal work, vary tremendously. Our consulting rate of $195 wasn't blinked at by L.A. attorneys, who can charge upwards of $600 per hour. But when we did work for a firm in New Hampshire they were really gasping -- their partners barely charged more than our rates.

I will say that when I started here last year I did a fairly extensive analysis of required rates and found that our required markup was about 4x, not 3. Because of internal peculiarities here I think that's probably a bit higher than most firms need. But again, I believe there could be regional variance in this. While salaries certainly increase in major metro areas, most surveys will only say 10% premiums or so. Overhead costs -- particularly rent and other outside services -- increase dramatically more than that.

Brent A. Byrd Chief Financial Officer Point Zero, Inc.

We are going through a similar analysis as a result of growth and a slight change in the profile of our clients.

The market area in which you work will have a very strong influence on your billing rates. What your market will bear will be different from mine or others.

We have a new, high level creative director, and are billing him at $175/hr. Our account executives/planners bill at $175, unless they are doing more project manager type work, when they bill at $135. We are small, and don't have a separate tier of project managers yet. Our AEs do it all, with some help from a project coordinator who assists them all.

Our designers bill out at $123. When they are doing production art (again, the same staff), they bill at $92.

If you look at the above list, the perfect example of the dilemma is when you have the CD, AE, Designer and a writer in a concepting meeting. Our concepting task billing rate is $150. But what about all the people's individual rates? Yikes.

We are trying to bill by staff member for the first time. We have always task billed in the past. At this point though, I am thinking we will be no less than the task rate, and override it with the staff rate, when it exceeds the staff rate. Not sure how we will like it. I am sure this only served to exacerbate your issue, but thought I'd pass it on.

Shelley Holloway

Our rates for the Creative staff include Client Services although we may change that soon. Our Production Manager is paid for in our printing mark-up (25% - 35%) CD = $200 AD = $175 PA (production artist) = $110

Donna Lipp