Average client-facing agency rates were 2.2% lower overall in micebook’s latest benchmarking, sparking debate among agency leaders about why rates have fallen while costs continue to rise.
The findings were shared at our monthly virtual agency leaders meeting last week, offering a chance to reflect on what has changed since the first benchmarking survey in 2024.
This latest survey gathered data from 32 UK-based agencies on the day rates they charge clients for client-facing roles, rather than employees’ salaries or employment costs. The full findings remain available exclusively to participating agencies and nineteen members.
The agencies taking part slightly differed between the two surveys, so the figures offer an indication of how rates have changed rather than a like-for-like comparison.
The headline figure sparked plenty of discussion about why rates might have fallen.
One explanation put forward was a settling of the market following the rapid increases experienced after the pandemic. Participants suggested that competition for scarce senior talent had driven particularly sharp increases in the run-up to the 2024 benchmarking, with some now seeing greater stability in recruitment and retention.
Others pointed to the pressure agencies face from procurement teams while their own costs continue to rise. “I think procurement’s squeezing us more on rates as well,” said one agency leader.
Long-term client agreements were highlighted as a particular challenge. Some rate cards are fixed for three years, with opportunities to review them varying between contracts. That can leave agencies with limited scope to reflect changes in employment and freelance costs in their client charges.
The discussion also explored why a day rate alone does not tell the whole story about an agency’s fee.
One leader described the balance between negotiating senior rates and protecting the rates attached to the delivery team, whose hours account for a larger proportion of the work. Changes to individual rates therefore need to be understood alongside the mix of roles and time allocated to a project.
Another said their agency was scrutinising project plans much more closely, checking that the hours assigned to each role accurately reflected the work involved. Repeating the staffing assumptions used for previous events was becoming harder to justify as costs increased and client rates remained relatively static.
“We’re having to look very, very carefully at our structure and our time planners,” they said.
The conversation then moved onto how much agency leaders should share internally about salary bands and benchmarking, and how greater transparency might support employees’ understanding of their career progression.
Some participants felt that sharing salary bands within departments could help people understand their earning potential and the steps needed to progress. Others highlighted the difficulty of comparing roles across an agency, where responsibilities, experience, performance and bonus structures can vary considerably.
There was also recognition that expectations are changing, with leaders observing that younger employees are more comfortable discussing pay openly and increasingly expect clarity from their employers.
Several participants favoured clear bands and individual conversations about progression, while expressing reservations about disclosing salaries across the whole business.