Eleven Reasons to Outsource Your Event Planning to an Agency
In boardrooms everywhere, C-level executives are discussing how to handle their event planning needs. When asked why they don’t outsource, the knee-jerk reaction of management is often cost. However, most of the time without realizing it, companies battle higher costs when they handle events internally. Here are 11 reasons why companies should outsource their meeting and event planning to an agency:
People in an agency get paid less than management people in a large corporation. So if an event is going to require 50 hours from someone, you are generally better off to go with the agency rather than an internal staffer. In the long run it costs less.
People in an agency generally have a less expensive benefit package. Agency contract people have no benefit package. However, people in a corporation usually have a strong benefit package — generally 20 to 30 percent of their salaries. So if someone is making $40 an hour, the real cost of that person to a corporation is $48-52 an hour. Even if the agency person and the corporate person are both paid $40 an hour, the total compensation package for the agency person is less.
On average, the overhead required to sustain a corporate employee, including heat, lights, power, equipment, space, furniture, human resource department functions, executive functions, etc., is 30 to 50 percent of an employee’s salary expense; and profit centers are usually charged an overhead “tax” to cover these things. That tax must be paid out of what the profit center nets on jobs or sales. But when an employee is event-planning, instead of performing core functions, money to pay that overhead is not being earned. The company’s investment is not being employed for what it was intended and is not earning a return. Agencies have overhead too, but not as much, and it is built into the rates charged, not added on to the salary expense, as is done internally. In other words, if a company outsources event planning, none of its overhead investment will be wasted on non-core, non-valued-added activity.
An agency or contract person who does events everyday for a living is likely to be more efficient than a corporate employee who only does events occasionally and is, therefore, likely to spend less time on an event.
An agency person who does events for a living every day is likely to have better supplier contacts and, therefore, be able to get better supplier prices than the in-house event part-timer.
Event planning is generally a distraction from the core business activities for which a corporate person is paid. When that corporate person is planning events, and he or she is being paid to, say, manage the advertising program or the boss’s schedule, the money is going out, but the core job is not getting done. So if it is to get done, the employer has to pay someone else to do it. A manager is kidding himself or herself if he or she thinks in-housing events is a savings.
No Sales Loss.
This problem is compounded if the person tapped to do event planning happens to have a real job that is sales. There is a significant “lost sales opportunity cost,” over and above the lost operational productivity cost described in number 5 above, which can be calculated by taking that person’s average sales per hour and multiplying it by the number of hours away from sales that must be devoted to event planning. Thus lost productivity is compounded with lost sales.
Quality generally suffers when an amateur, in-house part-timer is used to plan events rather than a certified, experienced professional. When a top manager is counting on you to make him or her look good to the board or to the client or to the public, or when an important customer’s perception of your business in on the line, it is foolish to go with the insider.
The advantages of going with an insider may be proprietary knowledge of the business or may be experience with an event because that person is a longtime employee or has done the event year after year — but these advantages can be matched by retaining an event planning agency over time.
Another great reason to outsource events is that the agency serves you before all others in your corporation — unlike the in-house event planner whose time can always be commandeered by someone who outranks you, causing your event planning to be put on hold.
This may be the best reason of all: it is much easier to fire an agency than an employee. You don’t have to document performance, and you don’t have to have dismissal approved by the vice president. If the agency gets too expensive, or if it loses its enthusiasm for the work, you are not powerless to make a correction, as you often are with a tenured employee.
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