TL;DR

• Look for the full 2024 Digital Services Salary Report to hit your inbox next week if you were able to participate.
• I’m refining a standalone service to uncover gaps and provide guidance on repeatable revenue generation systems. Grab some time on my calendar if you'd like to learn more. I'll be discounting the first few I do in exchange for feedback on the service. (I have 3 spots left for the first quarter)
• There are a ton of different job titles floating around. Standardizing your agency’s titles makes hiring easier.
• Title inflation is more common than it should be and hurts everyone involved. Avoid it.
• Salary growth has moderated across the board.

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Revgen review update

A quick update on the Revgen Review service: There was a ton of interest when I announced this two weeks ago. I have three spots left for the first quarter, but I expect them to fill by the end of next week.

If you’d like an objective, outside perspective on your agency’s revgen strategy, let’s chat. This entire service is based on my extensive research into how digital agencies grow. No hunches here folks.

I’m still doing the first few at a discounted rate of $3,200 in exchange for feedback on the service.

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Let's talk comp.

I’ve been heads-down working through the analysis for the salary report lately, and I’d like to share a few things that stood out. The first two won't make it into the final report, but this is a great place to discuss them. They both deal with job titles. The first is about the sheer number of titles covering similar roles. Second is the issue of how inflating titles can cause issues down the road. Finally, I'll take a quick look at how the industry's salary growth has moderated over the last few years.

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Job titles aren’t the place to get creative.

The first thing that stood out was the sheer number of job titles.

I received 81 different job titles for designers.

I could make a pretty good argument for needing fewer than ten titles.

It’s not just designers though. There were a ton of different titles for marketers, developers, and ops. employees too.

This creates a ton of confusion. When the average digital shop is turning over >20% of its employees each year, it’s easier to create job descriptions and hire for more standardized titles. It’s also easier to benchmark compensation ranges.

While it’s not unique to the digital agency space, it’s something that makes the tough task of staffing even more difficult.

Standardizing your shop's titles simplifies hiring; just be careful not to go too structured. Leave the overly specific titles and rigid pay bands to the big software firms.

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Title inflation is real

The second thing that stood out was the amount of title inflation. There were multiple job titles where the salary was half of what it should have been.

Senior Designers earning <$53k.

CxOs making <$78k.

Senior Directors taking home <$53k.

Those are just a few examples.

Title inflation is bad all around. I typically see it when an agency wants to retain a current employee but can’t (or won’t) give them a raise. They instead offer the employee a lofty title with a minimal compensation increase. Unfortunately, that title is typically a bit too advanced for the employee, and they struggle in the role.

This causes a number of issues:

It increases the stress on the employee who is now trying to scramble to level up faster than what’s appropriate.

It causes other employees to react negatively. Most of them know what that employee is capable of, and when management acts illogically, they take notice.

When hiring, it can artificially limit your applicant pool and make it harder to hire quality candidates.

Try to avoid inflating titles. It's a short-term fix that causes real problems down the road.

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Salary growth has moderated

The last thing I want to touch on is how significantly the salary growth has moderated.

From my surveys in 2019-2022, I saw average salary growth of 18-38% for employees at digital agencies.

From 2022-2024, the fastest growing segment was Operations, which grew 17%, but Business Development / Sales salaries shrank 1% on average.

It looks like the massive salary gains we saw for years have finally cooled to a more manageable rate.

There's a bunch more in the full report that won't fit here. Things like average raises (and expected raises), employee turnover benchmarks, some real data on remote work, a review of non-salary compensation, salary tables, and data on average owner compensation.

Keep an eye out for the full report next week!

-Nick