On the money: Are designers badly paid?

Are designers badly paid? How much should you charge? What do ad agency creative directors earn? Could you earn more abroad? Our January issue tackles these and other cash-related questions. Here, we share some of the key findings of the research we conducted for the issue

Are designers badly paid? How much should you charge? What do ad agency creative directors earn? Could you earn more abroad? Our January issue tackles these and other cash-related questions. Here, we share some of the key findings of the research we conducted for the issue

Info graphic from our January issue

 

First up, to provide context, a snapshot of the UK design industry. According to the Design Council’s last comprehensive survey (conducted in 2010), there were 232,000 designers in the UK. While you are reeling from that figure, we should point out that this is an incredible 29% increase from 2005. By now (the survey was done in 2010 remember) it’s safe to assume that figure has swelled considerably.

What do they all do?
That same Design Council Survey breaks the 232,000 figure down as follows:
Freelance designers: 65,900 (28%)
In design consultancies 82,500 (36%)
In-house 83,600 (36%)

How much does UK design earn?
Again, according to the Design Council, total fee income for UK design in 2010 was £15bn. Which breaks down as:
Design consultancy fees £7.6bn
Freelancers’ fee income £3.6bn
In-house budgets £3.8bn

The £15bn figure sounds impressive and there are some major businesse involved, but not many. In fact, the UK design industry is mostly made up of very small businesses. Almost half UK design studios have annual revenues of less than £50,000. Only 6% generate more than £500,000 per year.

How much do UK design businesses earn?
Source: Design Council Survey, 2010
Annual revenue for UK design consultancies, 2010
£2m+ 2%
£1m-£2m 1%
£500k-£1m 3%
£250k-£500k 5%
£100k-£250k 17%
£50k-£100k 24%
Less than £50k 49%

This has a knock-on effect when it comes to the design industry’s ablity to act in its own interests – we are talking about a diffuse, diverse industry with constituents who individually have relatively little money to spend on, for example, subscriptions to industry bodies, training and professional development and so on.

But not all design businesses are small or poor. Each year accounting firm Kingston Smith W1 conducts research into the top 30 UK design firms. Together, last year, they brought in £311m in gross income. Imagination brought in the most money with a gross income of just over £46m in the year ending August 2011. It also had the highest number of employees of the top 30 – 430.

Of the Kingston Smith Top 30, Venturethree had the highest gross income per head at £167,659. It was also the most profitable per head, recording £46,585 operating profit for each employee.

What about pay?

Are you earning the right amount?
Major Players 2012 salary survey worked out average national UK salaries for 2012 across a range of job titles in design and branding:
Junior designer: £21,000
Midweight designer: £30,000
Senior designer: £40,000
Design director: £55,000

NB: the figures for junior, senior and design director posts above have been updated as the previous figures were misquoted and relate only to integrated agency salaries. Apologies for the confusion


Pay varies only slightly according to sector

The Design Week 2011 salary survey revealed that designers in print graphics earned on average the least, with packaging, exhibition, interiors and branding higher, but not by more than 10%. More significantly, those working in the digital sector outside London were the big winners in that particular survey, earning a 19% average pay increase on the previous year. On average, designers in London were earning 10-15% more than those outside the capital.

Graphic design as the poor relation
The 2011 Coroflot design salary guide compared average US salaries across architecture, design management, fashion and apparel, graphic design, industrial design, interaction design and interior design from 2006 to 2011. Graphic design had the lowest average salary of all ($53,500 (£33,500)), with design management the highest ($95,000 (£60,000)). Graphic design salaries had gone down on average by nearly 2% in the period

Do US designers earn more?
The Creative Group, Paylandia 2013 survey worked out national average US design salaries by experience for 2012

Graphic designer
1 to 3 years $37,250 (£23,500) to $53,000 (£33,000)
3 to 5 years $48,750 (£30,500) to $68,000 (£43,000)
5+ years $61,000 (£38,000) to $83,250 (£52,000)

Web designer
1 to 5 years $52,000 (£33,000) to $76,500 (£48,000)
5 years + $74,750 (£47,000) to $103,750 (£65,000)

Creative director
5 to 8 years $89,500 (£56,000) to $124,500 (£78,000)
8+ years $97,250 (£61,000) to $169,500 (£106,000)

While these figures come from the AIGA/Aquent 2012 salary survey:

National US median average for designer in print: $45,000 (£28,000)
National US median average for designer in web/interactive: $55,000 (£35,000
National US median average for creative/design director: $100,000 (£63,000)

The New York premium
In the US, location matters. Thus, a graphic designer with 3 to 5 years experience in New York City can expect to be on between $68,700 (£43,100) and $95,800 (£60,100) while someone doing the same job with the same experience in Memphis will be on between $46,300 (£29,000) and $64,600 (£40,500). Source: Paylandia 2013 survey. Note: As Prescott Perez-Fox notes in the comments below, those figures seem high. The AIGA/Aquent Survey (link above) comes out with an average of around $50,000 for a NY print designer which seems closer to the mark.

Should I move to Australia? Can I earn more there?
Not necessarily. These figures are from the AGDA 2010 survey
Australia national average annual design salaries:
Solo designer A$57,000 (£37,000)
Owner, partner, principal A$106,800 (£69,500)
Creative director A$105,800 (£69,000)
Senior designer A$69,700 (£45,500)
Intermediate designer A$49,600 (£32,300)
Entry-level designer A$40,100 (£26,000)

I feel like I’m badly paid: how does design compare to other professions?

Designers often feel like they are badly paid compared to other professions, so we looked at some comparable careers.

Architecture
Source: Adrem Architecture Salary Guide 2012
National UK average salaries
Recently qualified architect (0-3 years experience) £33,000
Project architect (3-5 years experience) £38,000
Senior archtect £45,000
Associate director/project director £60,000

Journalism (source Prospects/NUJ)
National UK average salaries
Starting salary (trainee reporter) £12,000 – £15,000
Junior £15,000 – £24,000
Senior £22,000 – £39,000
Editor £50,000 – £85,000 on magazines/regional newspapers. National papers and large consumer magazines will be considerably more

Marketing (source: Marketing Week/Ball & Hoolahan Salary Survey 2012)
National UK average salaries
Graduate trainee £21,000
Digital marketing manager £37,000
Brand/product manager £36,000


Can I earn more as a freelancer?
Possibly. Here are the average UK design daily freelance rates (per 8-hour day) according to the Major Players Salary Survey 2012

Junior designer: £100
Midweight: £130
Senior: £250
Design director: £275

NB: the figures for junior, senior and design director posts above have been updated as the previous figures were misquoted and relate only to integrated agency rates. Apologies for the confusion

 

How does this compare around the world?
Source: 2011 Colorflot design salary guide
Current average graphic design hourly freelance rate in UK: £20
Current average graphic design hourly freelance rate in the US: $30 (£19)
Current average graphic design hourly frelance rate in India: R295 (£3.40)
Current average graphic design hourly freelance rate in Germany: €24 (£20)
Current average graphic design hourly freelance rate in Australia: A$29 (£19)
Current average graphic design hourly freelance rate in Canada: C$30 (£19)

What’s the most I could earn?
The Kingston Smith top 30 pulls out the highest earning directors in each firm. Top of the list is Checkland Kindleysides where one (unidentified) director earned £1,745,000 in the year ending April 2011. There were high earners too at Futurebrand, where someone earned £584,000 in 2011, Design Bridge (highest director pay £483,000) and The Partners (highest director pay £380,000). Someone at Wolff Olins earned £302,000 while the most Lambie-Nairn paid one of its directors was £295,000.


What is my time worth/What should we charge?
If you are working in a design studio, your time will be charged out to clients at an hourly or daily rate. The Design Business Association worked out average hourly charge-out rates for UK design businesses in various sectors in its 2012 DBA Charge Out Rates and Salary Review (supported by co.efficient). Because different roles command different rates, the DBA survey is based on an average across four job titles – Principal / proprietor; Account / Client handler; Senior Designer; Mac operator. Here are the figures:

Advertising: £93
Corporate identity/Branding: £103
Digital: £103
Exhibitions stands/Displays: £105
Retail/Interior/Experiential Design: £105
Literature/Print: £92
Packaging: £95
Point of Sale: £95
Product/Industrial/Strategic: £121

How does that compare to advertising?

Does design undercharge for its services compared to ther creative industries? Unfortunately we were unable to obtain figures for UK ad agency charge-out rates. However, our coleagues at Econsultancy conduct a digital agency rate card survey. So, for 2011 here are the UK average daily charge-out rates for digital agencies by job title

Director/partner £891
Senior designer/creative £744
Group acount director £746
Midweight designer £611
Animator £598
Illustrator £559
Copywriter £541
Junior designer/creative £494

Which gives an average across all job titles of £648. Assume a 7-hour day and that is an average of £92.50 an hour, so many design studios appear to be charging more for their time that digital ad agencies.

What does a Mad Man (or Woman) cost?
Although we had no data for UK ad agency charge-out rates, the 4A’s in the US did share data with us from their 2011 Billing Rate Survey.

There is a great disparity in the US between the rates charged by large and small ad agencies. A Chief Creative Director in an agency with 50 or fewer employees bills, on average, $277 an hour for their time to clients. For an agency with over 500 employees, that figure goes up to $776 an hour.

Agencies in New York charge the most. Average hourly billing rates for a mid-range New York agency in 2011 were:
Chief creative director: $590
Creative director: $326
Art director: $141
Assistant art director: $90

Do bigger agencies charge more in the UK?
We have no figures for ad agencies in general but digital agencies certainly do. The Econsultancy digital agency rate card survey 2011 compared charge-out rates to the size of an agency by turnover

Director/partner
£0-£1m £685
£1m-£5m £1,024
£5m+ £1,351

Junior designer/creative
£0-£1m £430
£1m-£5m £533
£5m+ £587

Do London agencies charge more?
Again, our source is the Econsultancy digital agency rate card survey 2011, which compares digital agency charge-out rates by region

Director/partner
London: £1,030
South-East £865
Non South East £777

Hopefully, all that has proved useful, or at least interesting. There’s plenty more, plus articles on setting up a studio, how to tell if you are in financial trouble, day-rates versus project fees and much more in our January issue, details below.

All graphics shown here were created for CR’s January issue by Mark McLure and Caroline Leprovost of the Guardian Digital Agency

CR in Print
The January issue of Creative Review is all about the Money – well, almost. What do you earn? Is everyone else getting more? Do you charge enough for your work? How much would it cost to set up on your own? Is there a better way of getting paid? These and many more questions are addressed in January’s CR.

But if money’s not your thing, there’s plenty more in the issue: interviews with photographer Alexander James, designer Mirko Borsche and Professor Neville Brody. Plus, Rick Poynor on Anarchy magazine, the influence of the atomic age on comic books, Paul Belford’s art direction column, Daniel Benneworth-Gray’s This Designer’s Life column and Gordon Comstock on the collected memos, letters and assorted writings of legendary adman David Ogilvy.

Please note, CR now has a limited presence on the newsstand at WH Smith high street stores (although it can still be found in WH Smith travel branches at train stations and airports). If you cannot find a copy of CR in your town, your WH Smith store or a local independent newsagent can order it for you. You can search for your nearest stockist here. Alternatively, call us on 020 7970 4878 to buy a copy direct from us. Based outside the UK? Simply call +44(0)207 970 4878 to find your nearest stockist. Better yet, subscribe to CR for a year here and save yourself almost 30% on the printed magazine.

CR for the iPad
Read in-depth features and analysis plus exclusive iPad-only content in the Creative Review iPad App. Longer, more in-depth features than we run on the blog, portfolios of great, full-screen images and hi-res video. If the blog is about news, comment and debate, the iPad is about inspiration, viewing and reading. As well as providing exclusive, iPad-only content, the app will also update with new content throughout each month.

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