Trade bodies agree fair remuneration guidelines

Guidelines aim to help agencies and clients draw up clear, unambiguous contracts.

A remuneration system that is clear, fair and easily understood by agencies and clients has come closer following a new agreement between the industry's trade bodies.

As a result, guidelines are being issued to help clients to get value for money and agencies get a proper rate.

At the same time, it is hoped the guidelines will lead to more flexible contracts, which are capable of surviving if key parties quit their jobs or if a client's needs change.

They are the result of a joint initiative by the IPA, ISBA, the Marketing Communications Consultants Association and the Public Relations Consultants Association.

David Pattison, the IPA's president, said: "There is no 'one size fits all' in agency remuneration and that reflects the reality in the market.

We have always believed that a 20 per cent profit margin is the right level. The benefit of this guide is that it gives both parties lots of ways to strike a deal that enables the good agency to make sufficient profit in order to invest in people and businesses and thus sustain top-class delivery for clients."

Debbie Morrison, ISBA's director of membership, said: "Everyone is searching for remuneration nirvana."

The guidelines stress the importance of agencies and clients not rushing into a relationship before a clear, unambiguous written agreement is in place. This would ensure agencies receive equitable remuneration and enable both parties to feel they are working towards a common goal.

In addition, any agreement should be capable of being understood by any future marketing director and be the subject of review, preferably on a six-monthly basis.

NEW CHECKLIST FOR REMUNERATION CONTRACTS 1 Simple to understand and easy to administer 2 Fair to both client and agency 3 Aligning client and agency interests and priorities 4 Finalised before agency resources are committed 5 Recorded in a ratified client/agency contract 6 Flexible enough to accommodate possible changes in the future 7 Involving senior management stewardship, with principles clearly communicated to the teams on both sides 8 Capable of standing the test of time and being understood by any future marketing director when he/she joins 9 Based on agreed and understood terms and definitions 10 Specified tracking and review dates

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