HOW Magazine’s 2010 Design Survey: Salaries are Down, but it’s not All Bad

From July 2008 to July 2010, over 1,500 designers shared details of their salaries with HOW. According to HOW Magazine’s 2010 design salary survey, the average national salary for designers dropped slightly (-1.5%) from 2008 figures to $49,753. If you’re a designer, does this decrease mean that you should worry  about the demand for your services? The good news is that it’s not all that bad.

“Graphic designers and production artists are in huge demand right now,” says Donna Farrugia, executive director of The Creative Group. For Donna, all signs are pointing to an approaching growth and hiring phase. According to a recent hiring index by The Creative Group, 6% of marketing and advertising managers planned to expand their staff in the third quarter of 2010. Up more than 5% since the second quarter, this is a good indication that growth and hiring may be in an upswing. The survey’s “Specialty Areas in Demand” include print design/production, web design/production and creative/art direction.

$2,200 average salary increase

Additionally , designers who were fortunate enough to see a salary increase saw an average of about $2,200. Creative directors showed a modest increase in pay (+3.9%), bringing their average annual salary to about $70,600. The increase likely due to both their experience and an ability to concept on-demand. Web designers also showed an increase in salary growth (+3.4%), bringing the average annual salary of this group to about $51,300. As a need for knowledgeable, creative web designers continues to be a demand, this figure should only continue to increase.

Male Designers still make about $1,600 more than their female counterparts annually.

And now for some bad news. The 2010 survey indicates a continuing disparity between the incomes of female designers and their male counterparts. According to the 2008 survey, female designers on average made nearly $5,400 less than their male peers. While this figure shows improvement in the 2010 survey, male designers still make about $1,600 more than their female counterparts annually. Cash bonuses for designers are also down an approximately $200 in 2010, but only 46% of participants reported receiving bonuses this year.

The average salary of designers living in southern states is down 8.5% while designers working in NYC made 18% more on average than in 2008 .

Geography seems to be a large factor in determining a designer’s salary as both the demand for services and the cost of living play influential roles. While the salaries of designers working in the North Central and Southern areas of the country make anywhere between $45,000 to $49,000, their counterparts working in larger cities on the east and west coast make significantly more. The average salary of designers working in New York City is up over 18% since last year ($63,056). Furthermore, while designers working in San Francisco may have seen a 6% drop in compensation this year, the average salary of $55,772 remains amongst the highest in the nation behind New York City ($63,056). Designers living in southern states appear to have suffered the most this past year, with salaries down 8.5%, bringing their average annual salary to approximately $45,500.

Freelancers’ average annual salaries are down 9% since 2008.

How much designers are paid is also influenced largely by what type of organization they work for. For the purpose of the survey, HOW grouped designers into four groups indicated by workplace: In-house, Design Firm, Ad Agency and Freelancer. The average salary of these four groups comes in at $48,988. Who’s making the most, you ask? Creatives working at Design Firms are currently averaging a salary of just over $51,000 (+3.2%). Unfortunately, it’s just the reverse for Freelancers, whose average annual salaries are down 9% since 2008. Representing the lowest average annual salary in the group ($47,394), it’s likely that freelancers’ have suffered more from the recession than these other groups due to clients’ shrinking budgets and difficulties finding new ones.

Entry-level designers suffered a 3.9% drop in pay.

As in other fields, it goes without saying that experience has shown to be the largest factor in determining how much a designer can presume to make in his/her field. HOW divided survey participants into seven groups, determined by their title: Principal, Partners or Owners, Creative Directors, Art Directors, Senior Designers, Designers, Entry-level Designers/Production Artists and Web Designers. The survey shows that while Entry-level Designers make understandably less than more experienced, senior level designers, they also suffered a drop in pay this year (-3.9%), making on average just over $30,000. Principals, Partners and Owners suffered from the largest percentage drop in 2010 (nearly 12%), bringing the average annual salary of these individuals to just over $55,400.

It’s important to note that a majority of the survey respondents (35.9%) come from the Midwest/North Central region of the United States. Participants from larger cities included in the survey (San Francisco and New York City) comprise only 7.2% of the overall figures. HOW states that while the survey numbers were down in comparison to 2008’s survey, there’s a possibility that this survey may actually show a modest improvement over the last half of 2008 and the first half of 2009, signaling signs of what will hopefully be a lasting economic recovery.

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Apples to Apples

This past December, I ran a poll that asked participants if they had ever worked with a freelancer, design studio or agency. It was conducted to gather more information about individuals and businesses went about deciding who they turn to – and who they weren’t turning to – for solutions to their visual communications needs.

As a follow-up that poll, in March: this time to gather more information about how individuals and businesses select creative professionals to work with. The poll asked this question: If you have worked with a freelancer, studio or agency in the past, what factor(s) influenced your decision to work with them the most? Here are some of the findings:

  • One half of the participants either hire creative professionals based on their prior experience/history with them and/or the pricing given for their services.
  • Nearly 40% of participants choose a creative professional based on the quality of their work.
  • 13% of participants specified their own reasons for choosing a creative professional for their design needs.
  • Based on poll findings, the reputation or recognition that a creative professional seems to have little influence on the individuals’ decision of whom to work with: no one specified ‘Their reputation’ as a factor in their decision-making process.

These findings support the fact that while many small and mid-size businesses may be working with larger agencies for help with their visual communications, they would benefit a great deal from working with a freelancer or design studio instead. Though the advantages are many, I’ll supply two significant reasons for doing so: the comparative abilities that many freelancers & studios possess, and the cost-effectiveness of choosing this route.

Abilities

The one great advantage of working with an agency is the large pool of in-house resources that agencies have to draw from for highly structured projects spanning specific areas of marketing, advertising and design. Unfortunately, if a client doesn’t necessarily need to draw from all of the resources an agency represents, they may still be paying for them – or at least their associated overhead costs – in one way or another. This is where freelancers and design studios exhibit a great advantage. Seasoned, experienced freelancers and creative professionals that work at or own design studios are often resourceful, well-connected individuals with a large pool of resources to draw from on an as needed basis. They may not be your ‘one-stop shop’ for all of your creative needs, but they still have the ability to find quality solutions to your communications objectives through one of their many outlets.

Pricing

A survey conducted by the American Association of Advertising Agencies (2008) concluded that large American ad agencies billed clients on average $974.00 an hour with smaller agencies (50 employees or less) still charging rates of nearly $300 per hour. It shouldn’t come as a surprise if you’re ever visited an agency in person, but at these rates, you’re not only paying the salary of the chief creative director handling your project, but a multitude of agency overhead costs as well. Considering all the additional expenditures and overhead agencies accumulate in daily business, it’s no surprise that many existing and emerging small business owners can invest in the talents these agencies have to offer. The costs involved become the key proponent of the process, rather than the value that the work can and should bring to their business.

Inversely, the hourly rates of solo practitioners/freelancers are considerably lower than the rates of creative professionals working at agencies. According to a survey conducted by HOW Magazine (2007) these groups are charging just south of $70 for their services, with the lowest average hourly rates around $27. The report also indicates that freelancers working in the Midwest (myself included) offer some of the most competitive rates in the country, charging on average $65 per hour.

Why the difference in price?, Is it because these professionals are less experienced or skilled in their craft? While there’s bound to be a bad one in every bunch, just as there is in every field, this difference in price is due largely to the fact that many freelancers choose to work from home or a smaller office, giving them the ability to keep prices low due to minimal overhead costs and passing on considerable savings to their clients. When compared to the rates given for agencies both large and small, business owners and individuals should not only be more comfortable with these rates, but can also focus on the value of the work a freelancer or studio represents, instead of the price tag associated with their services.

Given some of the advantages of working with a freelancer or design studio, why aren’t more businesses, both great and small, giving them more consideration? The value and quality of work freelancers and studios have is shared equally with their agency counterparts and the hourly fees serving as a basis for much of the work they do, along with low overhead costs indicate that they’re an affordable alternative for any sized business.

In conclusion, it makes sense to do a little research and find the right fit for your businesses’ visual communications needs before jumping right to what seems like the obvious solution. For many small businesses, the solutions to your graphic design needs can be found in working with a studio like Scott Creative, or one of the many other established, well-respected solo practitioners and graphic design studios that are bound to be in your area. We can save you both time and money while providing the value you would expect from working with a larger agency.

Poll Results: Have You Ever Worked with a Freelance Designer, Studio or Agency?

In early December, I posted a new poll on my LinkedIn profile page. It raised the question Have you or the company you work for ever hired out work to a freelance graphic designer, studio or agency? While there wasn’t as much participation in this poll as I had hoped for, I was still able to gather some good information from the results.
The Predictions:

  • Participants from larger business/organization will most likely answer that they have worked with a design studio/agency.
  • Participants from smaller business/organizations will be somewhat split: some may have worked with a freelancer, some may have worked with a design studio/agency.
  • Most participants will reply that they have never worked with a freelance designer.

The Findings:

  • A majority of the respondents, ages 25-34, are women in a management position with a background in sales.
  • Half of the participants represent mid-size businesses and have never hired out work to a freelancer, studio or agency.
  • One quarter of the participants have hired out work to a design studio or agency in the past.

While the number of the participants in this poll wasn’t as large as I had hoped, it did point out some things worth mentioning and did reflect some of my predictions. I was surprised to find that a majority of participants had never worked with either a freelancer, design studio or larger agency. I wasn’t surprised to find that most of the participants hadn’t worked with a freelance designer, and that makes me wonder why. Is it because these businesses don’t feel comfortable working with a freelancer?, Is it because they’ve never been approached by one?, Did the thought ever cross their mind? Maybe it’s a combination of a variety of reasons.

Keep an eye out in the days ahead for more information about the advantages of working with freelancers as well as the value it can bring to your business.

Poll Results Here