Outsource Marketing vs Cost of Hiring a New Employee

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Every year, businesses face the same issue: Budget. You crunch the numbers. You connect the dots. And no matter how hard you try, you’re always left struggling with how to cut expenses. Business owners continually make tough decisions about where to invest in the company to support growth.

We’re not mathematicians at Oneupweb, but we can do simple calculations and we love making Excel charts. So, we got out our TI-84 calculators from high school to crunch the numbers and answer a question we’re asked quite often: “Is it more cost-effective to outsource marketing to an agency or eat the cost of hiring a new employee to manage marketing internally?”

It’s not an easy decision. It often comes down to evaluating what your goals are now and where you hope to be in one, five, even ten years down the road.

The Cost of a New Employee, by the Numbers

According to the Bureau of Labor Statistics, salary accounts for 68.6 percent of total civilian employee compensation while benefits account for the remaining 31.4 percent. So how much does it really cost to hire a new employee?

Job seekers value salary above all else, but benefits rank fourth on their list of priorities. Roughly 10% of potential recruits say having benefits like health insurance is the most important aspect of their job search.

So what’s the cost of a new hire? Salary and benefits add up quickly:

  • Let’s say your new marketing coordinator has a base salary of $50,000.
  • Don’t forget about benefits. That’s another $22,886.

That makes the annual total cost of hiring this new employee $72,886, a monthly cost of $6,074.

breakdown of employee benefits

Pros of Hiring a Marketing Employee

  • You have a dedicated person in-house, ready to assist with your whims and answer questions …as long as they aren’t on vacation or playing Wordle at their desk.
  • They aren’t always in marketing-specific positions, which means they can fill in other roles when necessary.
  • They understand the company, and its goals and culture.

Cons of Hiring a Marketing Employee

  • Chances are good that your employee will not be skilled in all marketing disciplines. With so many aspects to digital marketing, from SEO to website development, you’ll be hard-pressed to find someone who knows everything.
  • They’ll likely need outside help to fulfill all their daily tasks, create great content, and stay active on social media.
  • Added subscription costs for tools such as a social media scheduling platform, graphic design software, and keyword research tool can add up fast.
  • Don’t forget training and professional development costs for your new employee.
  • Hiring a marketing employee often means not hiring an employee that could fill a role elsewhere in the company, such as sales, production, management, etc. That $72,000 a year might be better spent adding to another department.
  • Investing in a new employee can backfire if that team member leaves the organization. The median number of years new hires can expect to stay with a company is 4.1 years. Workers aged 25-34 average 2.8 years with a new employer.
a pro con list can help you outline the cost of a new employee vs outsource marketing
As simple as it sounds, a pro-and-con list can sort out the cost of hiring a new employee vs. outsource marketing.

Outsource Marketing Cost and Benefits

The decision to outsource marketing work often comes down to finding the right agency and signing a digital marketing retainer. A marketing retainer is a batch of hours per month that the agency uses to meet your marketing goals, develop marketing strategies, and create new content for your website, printed materials, or social media channels. Marketing retainers can sometimes include research and user experience analysis or website development and improvement, depending on your agreement.

How Much Does it Cost to Outsource Marketing?

On average, a 16-hour marketing retainer with an agency costs $5,000* a month. That means roughly $60,000 a year.

  • A full-time employee makes $6,074 a month while working 33 productive hours for $190 an hour.
  • A marketing agency is getting paid $5,000, working 16 hours and making $313 an hour.

Hour-by-hour cost might make it seem like outsourcing marketing isn’t worth the expense. But keep in mind that those 16 hours are worth significantly more than your salaried employee’s time.

Breaking Down Hours Spent Working with a Marketing Retainer

With a marketing retainer, there’s no wasted time in meetings, added expenses from marketing tools or subscriptions, or paid time off. Those retainer hours are entirely devoted to meeting and advancing your marketing efforts, without exception. There’s no downtime because these elements of marketing and strategy don’t use up retainer hours:

  • Client meetings
  • Client calls and emails
  • Agency internal meetings

Pros and Cons to Outsource Marketing

Hiring a marketing agency might be a substantial investment, but there is certainly value in working with a full team of marketing professionals.

Pros of a Digital Marketing Retainer

  • You get full-time support with the agency capable of meeting your needs with no time off.
  • A marketing agency is filled with experts in every area of digital marketing, not just one specialty. That means access to trained and experienced writers, graphic designers, paid media specialists, and developers.
  • Marketing agencies are informed about the latest marketing trends and tactics and can help you make important strategic decisions.
  • No turnover. There is no knowledge loss with an agency, compared to losing an in-house marketing employee.

Cons of a Digital Marketing Retainer

  • Marketing agencies typically have more than one client and that can mean juggling requests from people.
  • Marketing agencies may not move as quickly on certain tasks as an in-house team could.
  • Marketing agencies can only move as fast as their clients as well. That can sometimes cause projects to take longer if regular communication gets bogged down or sidetracked.

Only You Know the Right Direction for Your Business

Business leaders and decision-makers need to evaluate the return on investment for both hiring a new employee and engaging external marketing services and comparing the advantages of both options. The most important thing to consider is how well both options will position your business to be successful in the long run.

Only you can decide, but you don’t have to make the decision alone.

We love to chat. If we can help you decide if hiring an agency is the right move for your business, give us a call. We’re happy to answer your questions and help you determine why you should outsource your marketing or grow your internal marketing team.

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Taylor Holloran, Account Manager I joined Oneupweb after spending five years as an editor and project manager for an electronic publishing company in Traverse City. Before moving to northern Michigan, I worked on the ground for several international aid organizations, supporting development and conservation projects in Argentina, the Philippines and Cambodia. My experience working with...

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