How do digital services firms compensate their employees and owners, and how does that compensation relate to overall profitability and revenue growth?

We hear these questions time and time again at Bureau events and online in our Bureau Slack community. Given the talent shortage and the unique dynamics of digital shops, compensation largely comes down to a best guess. Often it’s based on data that doesn't focus exclusively on digital service companies and skews the numbers.

So what’s a digital shop to do? To establish usable data and surface insights, we partnered with Promethean Research to survey digital shops across North America and beyond. Crunching through the numbers, we found common themes across firm size, firm age, specialization, location and turnover rate. Read on for key findings. Interested in the full report? Gain access when you sign up as a Connect or Lead member.

Demystifying Salary

Let’s start with the basics: How much should people be paid? Among the key findings,

  • Average salaries are highest at large firms ($78K) and lowest at small firms ($63K). 

  • The highest U.S. salaries were seen in the Northeast at $86K, while the lowest average salaries were in the South region at $72K. 

  • The smaller the firm, the higher the concentration of designers in the mix. 

  • Remote employees were almost twice as experienced as their in-office counterparts.

  • Based on our findings, each additional year of experience is worth approximately a 4.5% increase in salary.

Non-Salary Compensation & Benefits

Overall, smaller shops can’t always compete with larger firms when it comes to salary, so they look for other ways to attract and retain talent. Studios (<10 employees) tend to shift more of their employee’s compensation to non-salary items (options, bonuses and profit-sharing plans), while medium and large firms tend to guarantee more salary compensation.

  • On average, non-salary compensation ranges from $1,171 for project managers to $11,000 for business development / sales roles that often have commission included.

  • The average number of Paid Time Off (PTO) days offered increases with firm size, from 13 PTO days per employee at studio firms to 19 days at large firms.

  • 47% of employees at large firms had unlimited PTO. 

  • For firms that provide “unlimited PTO,” the average number of days taken by employees in 2018 was 19.5.

  • Average annual Insurance benefits include health insurance ($5,212), life insurance ($808), dental/vision ($590) and retirement ($2,600).

Growth & Profitability

Similar to our prior report, owners are optimistic about the future, reporting an expected average top-line growth of 17% for 2019. To service this revenue growth, owners expect to add 22% to their company’s headcount year over year.

Digging Deeper into the Data

Curious how your company compares to others in the industry? Download the report summary.

Get the Full Report

Looking for even more insights? The full 2019 Digital Services Salary Report contains nearly 75 pages of findings including charts, tables and data on salaries by role, owner compensation, expected billable hours and more. Gain access when you sign up as a Connect or Lead member.