We’re Dying Out Here!

…one hourly rate at a time.

It’s no secret that recessions, big old nasty deep ones like what we’re currently experiencing, are particularly hard on public relations budgets…which in turn is bad for the hundreds of PR firms in receipt of the shrinking largeness of those budgets…which in turn sends thousands of PR folks (often the young good ones, unfortunately) out on the street looking for new employment. But does it really have to?

Not in all cases. Not if we in the profession and those that employ us, would ever unshackle ourselves from the concept of the billable hourly rate. *

Ostensibly hourly rates are bestowed by the rank and expertise of the various account team members and translated onto daily and weekly timesheets, which translate into a cumulative monthly total of billable hours which, if God is heaven and the stars are aligned, translate almost exactly every month to the maximum budgeted dollar figure retainer agreed to by the client. Amazing…whomever within the agency first estimated the retainer based on all these various billable hourly rates must have been a math genius.

Not so ostensibly, or at least openly discussed, is the billable hourly rate “game” conducted in virtually every PR firm. The game starts at the top and falls heaviest on those on the bottom. For it is they that pay the most severe price when it fails…which it most certainly will in tight economic times. Based on that maximum monthly retainer figure which absolutely must be met, agency management demands downward that hours be recorded each and every week (if not daily in some firms) at the necessary rates to maintain this revenue stream. The game comes in the recording of the time actually spent “doing client business”, including writing timesheets…and is often the most creative thing one does weekly. Compounding the problem is the fact that these same firms have bloated their overhead and payroll with non-productive elements that become non-essential in tight times…facilities and trendy office space, specialty consulting practices, etc…that demands an equal increase in those same hourly rates.

Of course lost in all of this, is actually servicing the client in a reasonable efficient and measurable way. But exactly when did efficient, measurable client service translate to between $150 and $300 an hour?

Thus as times get tougher, management demands a higher and higher percentage of billable hours at rates that the clients’ budgets can no longer sustain. Add to this the fact that this monthly budget or retainer is shrinking. The paradoxical result is clients terminate the PR firm because they can no longer afford them; and the PR firm begins laying off employees…usually those at the low-end of the hourly scale…the ones actually doing much the work at an affordable rate.

Here’s a simple, elegant solution to keep good people employed…dramatically lower the hourly fees, or even better, eliminate hourly fees altogether. Charge clients fairly for actual PR services completed…actual media placements, and projects completed. Incorporate a bonus structure for meeting budgets and deadlines or levels of coverage. What a revolutionary idea…charging clients for actual work completed and not for creative time-sheeting.

The result will not necessarily keep everyone from losing their job…just the good ones.

*(For the sake of full disclosure, my firm and myself personally, have not billed our clients by the hour in seventeen years…through three recessions…but what do we know.)

PR Street Smarts…

J-Schools are booming but is the PR curriculum keeping pace?

Recently Forbes.com published a "story” on the irony of while newspapers and magazines are going under at an unprecedented rate, enrollment in journalism schools around this country is at an all-time high. The crux of the article being that these advancing hordes of would-be journalists have little to look forward to in the way of meaningful employment after college other than less than desirable journalistic exercises such as Cat Fancy magazine or even teaching in this current recession. Although one can’t help but assume that Cat Fancy, teaching, or even Forbes.com might be very desirable given the current job market.

Nothing of course was said about those journalism grads that might be considering a career in public relations…and probably for good reason. If, as the article states, that 5,000 journalists have lost their newspaper jobs last year, then it’s probably a good bet that dramatically more PR types also took a job hit in 2008. And if any of those incoming journalism students wish to consider a job in PR right out of college, beware, you’ve got two big mountains to climb.

First and foremost is obviously the extremely limited number of entry-level jobs available. Secondly and maybe as important, is the limited and non-essential pabulum being dished out as the PR major in most journalism schools. Based on my experience in both guest lecturing and in hiring interns, public relations is still considered the unwanted stepchild in most j-school curriculum's at worst, or based on the out-dated traditional model of press releases and mass communication theory at best. Neither prepares graduating students even remotely for the fast-paced media relations driven world of entry-level PR. Way too much time is spent on how to write a good press release (which may be the ultimate oxymoron in journalism) than how to spot and understand “soft news angles” and how to turn them into a meaningful and influential pitch with a reporter or producer. A good PR school teaches how to write journalistically…a great PR school teaches how to understand the news, what makes a great story…and how to “sell” that story.

I understand there may not be a way of “teaching” all the skills and experience needed to be effective immediately, that much of what we exercise daily in our jobs is derived from learning as we go…watching, learning, practicing…developing news “street smarts.” But if J-schools are booming and as flush as mentioned, why not take those select few students inclined toward PR, and provide a learning and experience framework that will provide some of those street smarts within or even outside the classroom?

It might actually allow them to be the exception…a college grad with a job. I know we’d be interested.

Reflections from abroad…

Not much has changed, but nice to have a fresh perspective

I’ve been out of the country for the last several weeks and probably not so remarkably, little has changed in the macro world of economic stress, political turmoil, or surprisingly that it will get better “eventually.” And while the majority in this country continues to be optimistic that there is movement toward the better, the journey might be longer than first anticipated. Fair enough.

Not necessarily the case in the micro world of public relations and accelerated communications, however. Even a few short weeks can and has seen even more of a rush to embrace new technologies and communication forms, ala Twitter, Facebook, et. al. And while I find it ironic that these new forms of staying in touch and hoped for influence are being touted in a time when the biggest business story is the saving of an old rust-belt manufacturing industry wrapped around 100 year-old technology, I understand the need, if not always the importance, of instant communication even of the trivial…and will address it in future blog posts. (Sorry… 322 characters…way beyond my limit.)

This particular post however is devoted to short notes of reflection on an amazing trip half way around the world among people, who while certainly dependent on the global economy, approach life from quite different perspectives.

• Natural selection isn’t just a theory, it’s a fact…and it’s natural, and ok.
• Self-sustainability is relative, but achievable.
• All of us should travel and experience other cultures at every opportunity…and at the very least should encourage our children to do so, early and often. I recommend as a high schoolgraduation present…a backpack, a journal, and one-way ticket overseas, any direction.
• All politics are tribal by circumstance and personal by nature.
• Contributing does not mean giving money nor proselytizing…it’s listening and understanding and if appropriate, teaching.
• Friendship is the most inexpensive yet expansive gift any of us can share…here or abroad.

Next week, back to the alliterate and trivial tworld of tweets, twitter, and why what you’re doing right now, can actually be important.