How Australian creatives compare globally.
We’re regularly asked for global stats about the creative industry. Most often it’s business owners seeking assurance by comparing their business to another. Or employees wanting to compare their salary to peers. Regardless of reason, it’s human nature to benchmark ourselves against others.
Recently the annual WOW Benchpress UK survey was published. It’s based on 2000+ respondents across 44 countries and interestingly, the findings closely align with our knowledge of the Australian creative industry.
Here’s just a few of our takeaways:
The global creative industry is a plethora of micro businesses.
46% of respondents are from businesses with less than 4 employees.
Another 31% have 5-9 employees.
That makes 77% of creative businesses employing less than 9 employees.
When the Australian Government talks SMEs, they’re talking about medium businesses with less than 250 employees and small businesses with 10-49 employees.
That’s a reminder how different the creative industry is to other industry sectors.
It’s also a reminder to creative business owners to banish words like small, boutique and exclusive – they’re not differentiators and won’t help clients choose between you and another design supplier (who also runs a small, boutique and exclusive agency).
Pricing – hourly rates
Our mantra is cost by the hour, bill by value.
We all need to understand our hourly cost rate to calculate the cost of a project. The cost rate of each team members will depend on their salary package.
This survey cites an average hourly rate charged of £86 per hour*.
I would much prefer they speak median. Median ranks the data from largest to smallest to identify the middle so that there are an equal number of data values larger and smaller. A true middle figure.
Average totals the data then divides by the number of rankings – averaging out the data. The problem being one errant really low hourly rate (say $25 per hour) will totally skew the figures. As will one very high rate.
That said, the average tiered hourly charge out rates quoted are:
*Because of the cost of living in the UK, we’re comfortable quoting these figures pound for dollar. They align closely with our knowledge of Australian creatives charge out rates
Where does the day go?
The final takeaway is about productivity (or as they like to call it utilisation). The average director bills just 40% of their time. The rest of the time they wear many hats: from account service to sales and marketing; from administration duties to team management. Owning a creative business is about managing others, it’s not about the doing.
In our experience, successful creative businesses have founders who either suck up the management tasks and embrace the next stage of their career or they recognise leadership is not for them and hire others who do enjoy those tasks. It’s about understanding your strengths and weaknesses.
The less successful creative businesses are those run by designers who resent the business and long to return to the tools. That’s not good for the owner because they’re unhappy. It’s not good for the studio because vibes are contagious and it’s probably not that enjoyable for the client either.
These benchmarks are valuable for comparison. They are in UK pounds, but we think, given the higher cost of living in the UK, the pound can be confidently equated to the AUD dollar. The figures quoted align with our experience and knowledge of the Australian design industry.
You can download the complete report here.
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These articles also talk about the Australian design industry:
- Research into what clients want from designers
- Can creatives specialise in Australia?
- A different way to new business
- Results from a client survey
About Carol Mackay
After 30+ years running a graphic design firm, I pivoted from client-focused projects to consult to the design industry. Now with the Design Business Council I use my experience, and research, as a design mentor and coach. I help designers build robust, sustainable businesses, and help businesses integrate, and profit from, design.
The core of the DBC is the building a design community – over 85% of designers work in businesses with less than 5 employees, many less than 3. That means designers don’t have the same support network of other professionals. The DBC’s solution is supplement paid gigs with research, mentoring breakfast meet-ups, informative UNseminars and practical workshops in Melbourne, Perth and Sydney.