Ready to hire a Project Manager at your agency? Congrats on your growth! But before you post the PM job, decide the level of expertise you need and can afford. Agency PM salaries can be all over the place. Good PMs are expensive… but they’re worth it.
From my experience helping hundreds of agencies worldwide, you should consider three options—entry-level Project Coordinator, mid-career Project Manager, and senior Director of PM.
Let’s look at the pros and cons of each to help you decide. [Last updated: July 2023, including PM salaries]
Quick Tips: Which do you need?
In a hurry? I’m not surprised—here are my quick tips on which skill level you should consider:
- On a super-tight budget? Hire a Project Coordinator. They’ll probably make mistakes and require a lot of oversight, but they’re cheap. Ideally, you have someone experienced who can supervise and mentor them. Otherwise, stretch to hire a early-career Project Manager.
- Got a moderate budget? Hire a Project Manager. They’re a good balance of “has experience” and “affordable salary.” But hire the best you can afford—more on PM salary ranges below.
- Need a second person? Hire a Project Manager if you need someone to take over a big chunk of your current PM’s workload. Hire a Project Coordinator if budget’s tight and your PM has bandwidth to continue leading the projects.
- Tired of getting sucked into PM yourself? Hire a Director of PM so you aren’t managing all the PMs yourself. They’re not cheap, but by the time you get to 40+ employees, this senior hire will help you make yourself “needed but not necessary.”
- Fewer than 8-12 employees? It’s probably too early to hire someone dedicated to project management (unless you’re a contractor-based agency with lots of freelancers). For now, you need generalists who handle AM, PM, and SME work.
Now, let’s take a closer look at each PM level to help you decide what’s right for your agency’s situation.
Keep in mind that it’s a continuum, and past titles may not accurately describe someone’s expertise. A junior person might have a PM title at a small agency, and a director-level PM might have a senior PM title at bigger agency.
What’s an agency Project Coordinator?
An agency Project Coordinator handles project scheduling, client communication, and basic tasking to subject matter experts (SMEs). At some agencies, their title might be Junior PM or Associate PM.
They’re detail-oriented (good) but tend to be reactive (not ideal).
Project Coordinator Salary Ranges & Experience
A project coordinator will likely have 0-2 years of experience in project management. They’re probably not quite sure that if PM is their permanent career—they may be what I call a “reluctant PM” (someone who can be a PM but who may not want it).
In the U.S. as of 2023, an agency Project Coordinator salary is likely $40,000 to $70,000 (adjusted to local cost of living and agency size).
Pros and Cons of a Project Coordinator
They’re good at following directions, but they may not be good at predicting the future. This means they may not be able to predict risks that a more senior PM would know from intuition and/or experience.
Compared to a PM, a project coordinator may struggle to realize when something’s out of scope or when an in-scope change creates other impacts on the project—for instance, something that won’t take additional labor but that will add to the project’s duration.
A project coordinator can work well under a PM’s supervision and guidance, but it’s risky to send a project coordinator out on their own. They’re likely to make mistakes, frustrate clients, and consume your time when you need to fix things.
Project Coordinator Career Advancement
In the hopes of accelerating their career, a Project Coordinator might pursue the Certified Associate in Project Management (CAPM) designation. (It might help… but in an agency setting, project management is largely a “learn by doing” kind of job.)
Over time, most Project Coordinators eventually build their skills and expertise to get promoted to become a Project Manager. Let’s look at that skill level.
What’s an agency Project Manager?
An agency Project Manager does everything a project coordinator can do—but a PM creates estimates, builds project plans, schedules timelines, negotiates with clients, manages teams, and (often) hires contractors.
Someone at the Project Manager level is going to be proactive, instead of merely reactive. Ideally, their sense of ownership extends to running their projects (as Seth Godin noted), instead of merely managing them.
PM Salary Ranges & Experience
A project manager will likely have 2-7 years of experience in project management. (They could have more, too, if they don’t want to be a director-level PM). They’re a career PM, or on their way to becoming one.
In the U.S. as of 2023, an agency Project Manager’s salary is likely $70,000 to $150,000 (adjusted to local cost of living and agency size).
A senior PM might exceed $120,000 (especially in expensive markets like New York or the Bay Area) but higher six-figure compensation typically requires a Director of PM responsibilities—more on that later.
Pros and Cons of a Project Manager
They’re more seasoned than a project coordinator. They’ve made mistakes along the way, and you get that “been there, done that” experience from a PM-level hire.
For instance, almost every web PM will launch a website while forgetting to load the Google Analytics tracking code. When you hire a mid-career PM, they’ve already made that mistake at a previous job… not at your agency with your clients.
Estimation & Negotiation
This comes in handy when a PM builds (or shares feedback on) a project estimate during the sales support process.
- Waterfall PM: If you do “waterfall” project management (where you try to plan everything up front), a PM knows the components to consider, when to enlist subject matter experts (SMEs) for custom inputs, and where to flag risk areas.
- Agile PM: If you do a form of “Agile” project management (where, typically, the budget and/or timeline are fixed but the scope is flexible), a PM knows how to work with SMEs to get the best results, and how to manage the clients’ expectations about the inevitably flexible outcomes.
A PM has also honed their negotiating skills—they can present and negotiate a Change Order when a client requests something that’s Out of Scope (OOS). A PM also is likely to recognize when a request is out of scope.
To some extent, a seasoned PM can function as an Account Manager, keeping clients happy and upselling them more work (even if it’s not the PM’s natural preference).
A PM’s team management skills are stronger than a project coordinator, too—they know how to reassure internal team members who are unhappy, and how to motivate their project team to get the best results.
PM Career Advancement
A project manager might pursue the Project Management Professional (PMP) designation. My experience is that the PMP is useful in large enterprise IT roles, but it’s less useful in the rough-and-tumble world of client-facing PM at agencies.
Instead, I’d rather see someone who attends (or wants to attend!) the Digital PM Summit each year, who joined (or founded!) their city’s digital PM meetup so they could be around their peers, and who got the CSM/CSPO scrum certifications on their own time.
As a promotion, PMs typically move in one of two directions. If they want to move to a broader role, they might shift to become an Operations Manager or Director of Operations (a more internal focus), or to dig deeper on PM as a Director of PM, where they’d lead a team of PMs.
Let’s take a look a closer look at the Director of PM track.
What’s an agency Director of PM?
An agency Director of PM manages a team of PMs, makes final decisions about “traffic” scheduling conflicts, and thinks about systems and hiring to make things run smoothly beyond any one project.
Depending on the agency, the head of PM might have a job title like Director of Operations, VP of Project Management, or COO. Ultimately, though, they’re the boss of the other PMs.
Director of PM Salary Ranges & Experience
A Director of Project Management will likely have at least 7-10 years of experience in project management. They’re a career PM—this is what they want to do for the foreseeable future.
In the U.S. as of 2023, a Director of PM’s salary is likely $100,000 to $180,000 (adjusted to local cost of living and agency size). Small agencies might promote someone early and pay them less than six figures.
An expensive market like New York or the Bay Area may pay more, but that’s also a matter of supply and demand—it’s tough to find a truly effective PM Director in a competitive market.
Pros and Cons of a Director of PM
A Director of PM is really good at PM—so much that as the agency owner, you may not realize they’re doing their job. (Be sure to thank them for that; they’re working hard to keep things invisible!)
Not only have they made plenty of early-career mistakes (that they won’t make again), they’re good at predicting problems before they happen, and helping their direct reports prevent fires before they start.
A director-level PM is especially good at keeping people aligned—whether through intuition, experience, or both. This makes projects and retainers run more smoothly and more profitably.
When there’s a meltdown and their team’s overwhelmed, the Director of PM can—and will—step in to fix things. (And they know not to do it too soon or too late.)
Resource Scheduling and Portfolio “Traffic”
An individual PM makes decisions at the project level—and likely across a few projects—but a director-level PM is thinking about all the engagements across the entire agency. (That portfolio-based stress is part of why they typically get a six-figure salary.)
This includes making the “final call” when two PMs need the same resource at the same time, and it also includes thinking ahead of what the agency needs in the future.
Depending on the size of the agency, the Director of PM may report to the VP of Operations or COO, or they may report directly to the CEO at a smaller organization.
System Optimization
The director-level PM is thinking about the agency as a whole—including how to select (or design and build) systems to improve efficiency and effectiveness.
This might include looking at solutions to boost billable ratio, systems to gamify timekeeping compliance, and software to streamline routine reporting to help the agency get more done in less time.
At a smaller agency, an individual PM or a couple PMs can (and often do) select new PM software—but a director-level PM is thinking about the big picture and about the future, not just the current needs.
Director-level PM Career Advancement
At this level, a super-senior PM is likely speaking at conferences, not just attending them. They’ve read all the books on PM—and have probably considered writing one of their own.
From here, they might choose to stay in PM, or pursue a broader role in operations as VP of Delivery, VP of Operations, or COO. (I occasionally see them move to CEO but that’s less common.)
As happens for any role, they might jump ship if they feel consistently under-appreciated. If that happens, you’re probably in trouble, because they were critical to your agency… even if you didn’t realize it before.
Deciding the Level of PM Your Agency Needs
When it doubt, hire the best Project Manager you can afford. They’re more than just a “work babysitter”; a great PM just might save the day.
Here are my recommended PM interview questions. Be sure to dig into what they’ve learned from past mistakes, and ensure they focus on the role of people as much as process and tasks.
Not sure after the info I shared above? Contact me and I can help you decide.
Question: What skill level (Project Coordinator, Project Manager, or Director of PM) do you need next at your agency?
