Setting hourly rates – what can we expect in 2023?

With the cost-of-living crisis continuing to bite, many companies are likely to be looking at an increase in the hourly rates they pay their contractors, consultants and marketing agencies in 2023.

The cost of living is currently rising at its fastest rate in 40 years due to soaring energy and food prices.

These costs are also being felt by marketing agencies who are facing increased energy and office costs along with pressure to increase the wages they are paying their staff.

Financial services marketing agency prices have been under pressure over the past few years due to increased competition and some clients choosing to take more work in-house or to hire individual contractors. So, it seems unlikely that many agencies will be able to swallow rising costs and keep the rates they charge clients steady whilst remaining profitable.

Contractors, consultants and freelancers are also facing their own increasing costs, both in terms of the services they use in order to do their job, but also in their personal lives.

Therefore, many financial services marketing teams will be looking at increasing costs for the work they outsource.

How much can they expect the increase to be?

This is a tricky question, and one that will vary vastly dependent on the agencies and contractors they use.

A fair guess would be based on either wages growth or CPI inflation rates. Some agencies and contractors may choose to keep hourly rate increases for 2023 close to pay growth, which stood at 5.7% in the latest figures for the year to September. Others may choose to base rate increases on CPI inflation, currently standing at 10.1%.

Some agencies may choose to future-proof further still but raising rates as high as 13-15% in order to cover any potential further increases in inflation.

Marketing professionals are also looking at increased costs for other services and advertising, with some publications set to raise their rate cards by up to 20% in order to meet their own increasing costs.

The question is, will financial services companies raise their marketing budget to cover these seemingly inevitable price rises, or will marketing teams have to find areas to cut back in 2023?