A topic too little discussed
Rarely do we see articles or analyses in the public space about how branding and/or design agencies are financially compensated for their services or how they build their budget from which the hourly fee is calculated. I consider agencies with a track record in the market, proven experience and expertise. The calculation does not apply to freelancers or those just starting in the profession.
- But first of all, it’s important to look at some real financial benchmarks gleaned from the services market. So:
- Labor hour at a non-branded car service: 100-120 lei + VAT (20-25 Eur/hour + VAT),
- Labor hour at a branded (dealership) car service: from 150 lei upwards (30 Eur/hour + VAT),
- “Cleaning lady”: starting from 70 lei/hour net (14 Eur, which if taxed would be about 20 Eur/hour + VAT),
- “The garden boys”, aka the gardeners who prune the trees, mow the grass, clean the leaves, etc: 80 Lei/hour (16 Euro/hour, which if taxed would be about 23 Eur + VAT),
- The plumber: 250 Lei per finding, plus 1400 Lei + VAT for 8 hours total repair (41 Euro/hour + VAT),
- And a salary benchmark: the “cleaning lady” employed at an institution: 4300 Lei net salary, i.e. about 6200 gross.
I purposely chose these somewhat specialized, semi-specialized or rough labor, which do not require much schooling, higher education, accumulation of knowledge and experience to illustrate a range of fees that starts from a minimum of 20 Euro/hour + VAT (if a r be taxed) and can go up to over 40 Euro/hour + VAT.
The sum goes further. If they work 170 hours/month like any other employee with a work permit, the “cleaning lady” could earn 3400 Euro/month gross and the plumber somewhere around 7000.
A branding and/or design agency has the following components in its budget (in no particular order): Salaries, internet subscription, software subscriptions (graphics and general use programs, accounting, invoicing, e-mail, cloud or electronic archiving, etc), rent (or if owned building tax, building insurance), car tax, car insurance, car maintenance, SSM services, document archiving services, telephony, fuel, periodic gas and electricity installation revisions, utilities, investments, protocol, accounting services, bank charges and commissions, various consumables, cleaning services, provisions, marketing costs (website, newsletter, etc).
A gross (taxable) margin is added on top of all this. Calculations show that the minimum hourly fee charged to clients cannot be less than 25-30 Euro/hour for each productive employee (designer, consultant), otherwise the agency is at a loss, practically sponsoring clients.
Comparisons with the above-mentioned trades/services show that an agency charging 25-30 Euro/hour is a mockery of specialized branding and/or design services. It follows that the “cleaning lady” services are just as important to a client/company as branding and/or design services, and the plumber is even more valued.
Like any business, agencies are not NGOs or charities. So where should an agency’s real hourly fee be in order to pay its employees naturally, have secure running costs, and make a reasonable profit? And, above all, not to bear the shameful comparison with “the cleaning lady” or “the garden boys”? Romania is no longer a cheap country and salaries and financial compensation need to be brought in line with the running costs and prices necessary for daily living. A realistic estimate starts at 40 Euro/hour + VAT.
Do not be understood that I want to diminish the importance of these services and people, but the comparison and the relative equality of financial compensation with them is quite demotivating for those in the field and shameful, especially for those who want to pay at this level for branding and/or design services.