The short answer
For a UK professional services firm of around 20 people, a retainer usually fits better than a first marketing hire, because the work spans more specialisms than one salary can buy. A hire wins where one discipline done continuously is genuinely the whole job and somebody has time to manage the person doing it. Cost only settles the question at the extremes.
Key takeaways
- The statutory cost on top of a salary is between 15 and 16 per cent, not the 20 to 30 per cent quoted on agency comparison pages. Everything above that figure is a decision somebody made.
- On a £42,000 salary the fully loaded figure is £48,623 a year, or £4,052 a month. That is the crossover: below it a retainer is cheaper, above it the hire is.
- The crossover is a price, not a decision. One salary buys one specialism, a retainer buys part of several, and those are different purchases at the same number.
- The binding constraint at this size is rarely budget. It is whether a partner has time to manage a marketer who has never worked inside a regulated practice.
- The two commitments unwind very differently. A retainer ends on its notice period. An employee of two years or more carries notice plus redundancy pay, capped at £22,530.
Search this question in the UK and the first page of results is written almost entirely by marketing agencies and recruiters. That is not a conspiracy, it is simply who has a reason to publish. It does mean the in-house column tends to arrive pre-loaded: recruitment fees, software licences, management overhead, a staff turnover statistic with no source attached to it.
The statutory part of that column is public, and smaller than the pages quoting it suggest. For the 2026 to 2027 tax year an employer adds National Insurance at 15 per cent of pay above a £5,000 secondary threshold, plus a minimum pension contribution of 3 per cent of qualifying earnings. On a £42,000 salary that is £6,623, just under 16 per cent. Every pound above it is a choice, not a cost the law imposes.
So run the arithmetic first. Then stop, because the arithmetic will not decide this.
Work out what the hire actually costs
The statutory on-cost of a UK employee is between 15 and 16 per cent of salary, whatever the comparison pages say. Two lines produce almost all of it, both published by His Majesty's Revenue and Customs and by The Pensions Regulator, and neither is negotiable. Put your own advertised salary in the third column and the rest follows.
| Line | How it is set | On a £42,000 salary |
|---|---|---|
| Salary | The figure on the advert you would run | £42,000 |
| Employer National Insurance | 15% of pay above the £5,000 secondary threshold | £5,550 |
| Minimum employer pension | 3% of qualifying earnings, £6,240 to £50,270 | £1,073 |
| Annual cost | Statutory, before anyone has decided anything | £48,623 |
| Monthly equivalent | The number to hold a retainer quote against | £4,052 |
What sits above that line is real but discretionary. A recruiter's fee is negotiable, or avoidable by advertising directly, and software is whatever you choose to buy. None of it belongs in a comparison presented as though the law set it.
The crossover is a price, not a decision
A £4,052 retainer and a £42,000 hire cost the same and buy different things. One buys about 46 working weeks of one person, once the statutory 5.6 weeks of paid holiday comes out. The other buys a slice of four or five people who each do one thing well. If the year needs a website rebuild, then search, then paid media, then content a partner will actually approve, one salary covers one of those properly and the rest badly. That is not an arithmetic problem, so no arithmetic fixes it.
Cost, where one discipline done continuously is the whole job
In-house
Above roughly £4,050 a month the hire is cheaper, and cheaper again in year two once recruitment is behind you.
Cost, where the work spans four specialisms
Agency
Four salaries is not a decision a firm of this size is making. One salary spread across four jobs produces four half-finished ones.
Time to the first piece of work
Agency
A hire starts a notice period behind, and the search itself takes weeks. A retainer starts on the date you sign.
Understanding your clients and your regulator
In-house, from about month six
This is the row agencies never close, and the honest reason a hire wins over a long enough horizon.
Cost of being wrong
Agency, if the notice is short
Check the notice period in the contract before using this as a reason. A twelve month term with no break clause is not more reversible than an employee.
Before you write the job advert
Find out which job you are actually hiring for.
Tell us what has to change by next summer. Free to your firm. The agency pays us, and only if the relationship works.
Get a recommendationWho manages them, and who signs the work off
A first marketing hire in a 20 person practice usually reports to a partner who bills by the hour. That is the pattern behind most of the disappointing first hires we hear about when a firm comes to us after one. The salary was affordable and the person was capable. What was missing was anybody with the time, or the standing, to say no to one piece of work and yes to another.
There is a second constraint a firm outside professional services does not have. Whoever produces the marketing, a partner still approves it, because the regulator holds the firm rather than the author responsible for what it claims. That loop costs the same whether the copy came from an employee or a supplier, which removes one of the arguments most often made for hiring. An in-house marketer is not faster through sign-off. They are faster at everything before it.
If this question is really about disappointment with an agency you already have, deal with that first. Our four checks you can run on public records take an afternoon and will tell you whether the problem is the supplier or the brief.
Which decision is easier to undo
A retainer ends on its notice period. An employment relationship of two years or more does not.
UK statutory notice is one week after a month, then a week for every complete year of service, to a maximum of twelve. On top of that, statutory redundancy pay becomes due after two years, calculated on a week's pay capped at £751 and a total capped at £22,530 for redundancies on or after 6 April 2026. A role that has not worked out is a cost that grows with every year you leave it, and a conversation partners tend to postpone.
The agency side has its own version, and it is not the fee. It is the accounts and the assets. A supplier holding the analytics property and the code has an exit cost that never appears in the contract, which is why what to walk away from treats ownership as a term to settle before signing.
When neither is right yet
Two conditions make this whole comparison premature, and both are common in a partnership.
The first is that the partners have not agreed what the firm is selling, to whom, and at what fee. A hire will spend six months discovering that disagreement and an agency will price around it, and either way you pay for a conversation you could have had for nothing. The second is that the work in front of you is one project rather than a continuing programme. A single website is not a job and it is not a retainer, and buying either structure for it means paying for months in which the arrangement has nothing to do.
Saying that costs us the introduction, which is the point. Our page for professional services firms sets out what we assess before recommending anyone and where we say no, and the wider guide to choosing a digital agency covers the decision that follows if the answer here is a supplier.
Frequently asked questions
What managing partners ask us about hiring versus retaining.
Is it cheaper to hire in-house or use a marketing agency?
It depends on how many disciplines the work needs. A salary of £42,000 costs a UK employer £48,623 a year once National Insurance and the minimum pension are added, or £4,052 a month. Below that a retainer is cheaper, above it the hire is, but only if one specialism is genuinely all the work requires.
What does a marketing hire really cost on top of the salary?
Between 15 and 16 per cent, at 2026 to 2027 rates. Employer National Insurance is 15 per cent of pay above a £5,000 secondary threshold, and the minimum employer pension contribution is 3 per cent of qualifying earnings. Recruitment fees and software sit on top, but those are decisions rather than statutory costs.
How big does a practice need to be before hiring marketing in-house?
Headcount is the wrong measure. The question is whether one discipline done continuously is the whole job, and whether somebody has time to manage the person doing it. A 30 person practice with a partner who will give it two hours a week is better placed than a 60 person practice with nobody spare.
Can we run an in-house hire and an agency together?
That is the common end state, and it works in one order. The hire owns the brief and the sign-off, and the agency supplies the specialisms one person cannot hold. It fails in the other order, where the agency sets direction and the employee becomes an unmanaged account handler.
We already have an agency. Should we bring the work in-house?
Test the incumbent before you price the alternative. Most of the disappointment that drives firms to consider hiring comes from a supplier nobody has reviewed against evidence, and replacing one with an inexperienced hire repeats the mistake in a form far harder to reverse.
Sources and useful reading
- Rates and thresholds for employers 2026 to 2027, His Majesty's Revenue and Customs.
- Making contributions to your pension scheme, The Pensions Regulator.
- Review of the automatic enrolment earnings trigger and qualifying earnings band for 2026/27, Department for Work and Pensions.
- Holiday entitlement, the statutory 5.6 weeks.
- Employers' liability insurance, the £5 million minimum.
- Redundancy pay, the qualifying period and the caps.
- Notice periods, the statutory minimums.
This article is commercial decision support, not legal, employment, tax or regulatory advice. The worked figures are illustrative and use published statutory rates for the 2026 to 2027 tax year.