Mentioned resource: Guide to hiring a digital marketing firm
Hey there I’m John Doherty. Entrepreneur, marketer, dad, husband, outdoorsman, and the founder and CEO of Credo where we connect great companies with the best pre-vetted digital marketing firms.
In the video above, I talk about whether you should hire for marketing in-house or use an agency. There’s not a straight forward answer, but I’ve spent a lot of time thinking about and talking through this conundrum with companies over the years.
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How the answer has changed in 2021
It’s now October 2021, and I recorded the above video in October 2020 about 9 months after the Covid pandemic really started in the US. Since then, much has changed and the world is still in a bit of an upheaval. Some things have come back, like some travel, but the business world is still trying to figure out what’s what.
One of hardest things to do right now as an entrepreneur, founder, or leader of any kind is hire great people. I’m not going to dive into any of the politics around it, so I’ll let Google Trends speak for itself:
From what I can tell, most of the “worker shortage” is around manual and minimum wage jobs. It’s been true for a long time that one can’t afford an apartment in most or any major metro areas on minimum wage, and even $15/hr is difficult after taxes and alongside other things when average rents are over $1,700/mo in cities like Denver according to sites like Zumper (data from October 2021).
Even in skilled tech jobs like marketing, it is hard to hire. We work with a lot of agencies and speak with hundreds of companies a month, and everyone is currently struggling to find talent they can afford.
It is truly a worker’s market in skilled jobs, and they’ve all learned they can command top market rates and advocate for things they should have had for a long time (in my opinion) like flexibility to work from home, more than 2 weeks of paid time off, health insurance, etc. In Denver for example, according to Glassdoor the current average salary for a Marketing Manager is $88,367 per year!
So what does that mean for someone like you who is needing and trying to hire great people, and you just can’t find them?
I have a few thoughts for you, and urge you to consider whether an agency might be the right fit for you instead of trying your luck at finding that very expensive unicorn.
Just below I’m going outline:
- The advantages of an agency over a full time hire in a market like today’s
- The importance of a good recruiting process regardless of the type of hiring you do
- Short term vs long term solutions and why short term solutions are ok
Why you should consider an agency in today’s market
With salaries being what they are and a tight job market to boot, hiring is extremely hard and expensive and time consuming. I’ll venture out and argue that hiring an agency might be the right move for you right now even if ideally you’d have someone full time in-house in that role.
My wife works at a tech company and has a team of 4 full time designers, but she’s been unable to staff up internally with designers because she just can’t get the headcount open.
Interestingly though, she has the budget to hire agencies who can work with her and her team to accomplish important projects for the company.
She was effectively forced to go this route because of not being able to open new roles. Your company may be there, but more likely you’re just unable to find good people.
If you have the budget to do what you need to do, hiring an agency can make a ton of sense right now because:
- You can hire a lot faster and cheaper. The average time to hire a full time person is 6-8 weeks, plus two more weeks waiting for them to leave their old job and begin with you, plus training. You can hire an agency in 3-5 weeks, get a team for the price of (or even less than) a full time hire, and they get started quickly.
- Basically every market today is competitive and fast moving, and every week that you don’t do something you’re probably falling behind your competitors. You may not notice it right now, but you will in a few months when your competitors have moved forward and you haven’t.
- The hiring market may/will likely cool down as the economy rightsizes and current weirdness subsides over time. But you can’t afford to wait that long or take the risk that it may take longer than you think for things to “return to normal”.
The importance of a good recruiting process
Regardless of if you hire an agency or in-house, you need a solid recruiting process to get enough qualified applicants in the top of the funnel so that you get down to 1-3 super qualified options from which you end up hiring.
What I see all too often, especially with smaller companies, is that they decide to hire someone, don’t create an official job posting, and then ask around to their friends via DMs and text messages to see if their friend knows anyone.
This is the absolute wrong way to hire. You may get 1-2 good referrals, but that is not nearly enough to know if you’re making the right hire. Yet, this is how most smaller companies try to do it, and it’s how almost every company tries to hire an agency!
Instead of doing this, a solid recruiting process will actually get you to your goal of hiring the right person or provider for the role.
Here are the steps I take:
- Take some time to write up the scope of the role.
- Post it somewhere and get it in places where your ideal prospects are. For full time hires, we use Breezy and then pay to promote it to a few relevant job boards like remote.co or Career Contessa. Just like we have an advertising budget for our main offerings, I also have a budget (~$500) per open full time role that we have.
- Have a good set of things that you’re looking for, and include a question that shows you if they will be a cultural fit for you. For us at Credo with full time hires, I always ask a question to see if they are proactive in finding answers.
- Sort through those applicants, get a solid chunk (we usually aim for 10-20) and take them to the next step, which for us is a survey to ask more questions.
- After that, we more 4-6 to phone conversations. Then we get those who are a good fit to do a paid test project, then we extend the role to the right person.
When it comes to hiring an agency, the process I teach is our DSSP framework:
- Discovery calls with initial options (4-8) – here at Credo we introduce you to 3 with the goal of all of them being well qualified so you don’t have to do 4+ more calls (amounting to 2-3 hours) with agencies who are not qualified.
- Longer strategy calls (1 hour in length each) with 2-3 agencies to go deeper.
- Get their proposed scope and pricing from them before moving to an official proposal and contract.
- Get the official proposal and terms, then review those and negotiate.
Short term vs long term solutions
I’ve always been against short term solutions, preferring to build for the long term and make the “right” decision instead of a (any) decision.
In the last few years though, I’ve realized that this has been to my detriment because often there is no “right” answer! In the best of times there is a clear “better” solution that has less risk than the other options, but there are actually many times that our decision has to be “the better of bad options.”
I think there are times where it is better to hire an agency and there are times where it’s better to hire in-house. In fact, when someone asks me whether they should hire an agency or hire an in-house I usually tell them “Honestly, you’ll probably end up hiring both. So what you should really be asking is which one you should hire now.”
Hiring an agency might not be a long term solution. Long term it is usually (not always, but usually) better to have a rockstar team internally who may work with agencies from time to time but who owns the strategy internally and can do it well over time.
But there are absolutely times where you need results faster than you can hire and train someone internally, plus hiring full time is never just their salary. It’s their salary plus benefits plus payroll taxes plus equipment etc etc. And even then, you may not need that person long term which means you’ll have to pay severance.
If you need a person in-house long term to own a channel, my take is that it’s ok to hire an agency as a short to medium term fix to manage the channels better than you can, and then eventually to transition that over to a full time person. And if you do it right, your agency or consultant may even help you hire the right person!
If you’re a marketing leader or an entrepreneur looking to hire for marketing, you have some challenging things you’re thinking through including:
- Budget and what is reasonable to pay
- Results and what is reasonable to expect
- How to manage them well and know if you’re getting results.
The opportunity ahead of you, if you hire well, is immense. You’ll be able to:
- Grow more quickly
- At a lower cost of acquisition
- And hire the right team to get more results faster
I was recently on a call with a business owner talking about his business and results. When talking about what he does, I was impressed. It appears to be a great business in a great space with a product that people want and get great value from.
But when I asked him about the marketing they’ve done, he told me that he’s had a director of marketing for a few years. That didn’t match up because he had done a total of 4 sales calls in those three years, all in the last month or so. He had “marketing”, but had no insight into his results. Honestly, he had hired badly.
So, should you hire in-house or an agency? Here’s how I think about it.
- Understand the maturity of your need inside the company. This is where I see a lot of companies go wrong, where they hire an agency or in-house when they haven’t figured out the channel on their own. This usually then leads to an underinvestment of both budget and time, and walking away saying it didn’t work. I’ve done this before and regretted it afterwards. Don’t do it.
- Determine the depth and length of that need. Once you’ve started the channel or undertaking at your company, determine if it’s something that needs to actively be done full time or if it’s something that someone can do on a part time basis.
- Determine the budget needed to properly hire for and execute on that need. Executing on marketing is always more expensive than just the hire itself, because of tools and other things needed once someone is focusing on it. A general rule of thumb I use is to take the hiring budget and add 25% for additional costs. Additionally, what you need to budget is based off your growth goals and expectations, so understanding that will help you not undervalue and thus underinvest in it. You can then take this potential budget to your candidates to understand if it’s reasonable (good candidates will ask you about budget anyways).
- Compare that budget against what is in your budget currently. Once you’ve determined your potential budget and had feedback on it, then you can determine if that’s reasonable within your current overall business budget or not. If it is, great. If it’s not, then you need to adjust your expectations or increase your budget to hit those expectations.
- Decide on the type of hire. Once you’ve determined all of the above, now you can decide if you need someone full time in-house or if an agency can do it. In general, if it’s a leadership/strategy position then an in-house hire is often the right hire so that they can then manage a team or agencies who are boots-on-the-ground getting it done. Many companies end up working with both, and the companies who work the most successfully with agencies have someone with the time and expertise to manage an agency and hold them accountable to results.
Before we end, I want to correct a common misconception I see which is that “agencies are more expensive than in-house hires”. This is actually not true, especially in the digital marketing world, because often what you get with an agency is a team of professional marketers for the same price as one full time hire.
Agencies are also easier to fire if they don’t work out.
And when I hear that someone doesn’t want the expense associated with an account manager, I make sure they understand that if they’re not paying for an account manager then they are the account manager themselves.
Today we’ve talked about whether you should hire in-house for marketing or work with an agency. We covered:
- Understanding the maturity of the need inside your company
- Determining the length and depth of that need
- Determining the budget needed to achieve your goals
- Comparing that to your budget realities inside your company
- Deciding on the right type of hire.
And if you found this content helpful, I’d love for you to subscribe to the YouTube channel so that you’re notified about weekly videos moving forward.