Building Your Annual Corporate Comms Budget? Know Where to Focus Resources

It’s 2H21, and if you’re not already reviewing your budget and staffing for 2022, you soon will be. And you may already be navigating budget reviews — and potentially cuts — even as the demands on the communications team stay the same. To prepare, communications leaders need a clear view of which costs and resources to prioritize. 

“Communications leaders must know how their function stacks up against that of peers and have a clear view of functional priorities, so they can get their budget proposals through and avoid cuts,” says Iliyana Hadjistoyanova, Director, Advisory, Gartner.

The top priorities — executive communications, employee communications and media relations — are quite consistent among organizations, regardless of type and size. But comms teams are responsible for a wide range of activities overall, often with limited budgets and staff. Corporate communications leaders who benchmark their budgets and staffing put themselves in a much better position to allocate spend and full-time employees (FTEs) across activities to maximize their team’s effectiveness.

Read more: Marketing Budgets Drop to Lowest Level in Recent History

Employee communications is always among the top five activities with the highest average FTE allocation. The Gartner 2020 Communications Resource Allocation Benchmarking Survey showed that the average number of FTEs dedicated to employee communications was:

• 2.4 at organizations with revenue of less than $5 billion
• 9 at those with $5 billion to $15 billion in revenue
• 18.9 at organizations with more than $15 billion in revenue

In recent years, though, there have been some tangible shifts in FTE allocations, and 2020 saw disruptions to steady trends from previous years, likely because organizations shifted their priorities to deal with the unique challenges of the pandemic. For example:

• Social media. The average number of FTEs allocated to social media rose from 1.7 FTEs in 2019 to 1.9 FTEs in 2020 — when the average number of media relations FTEs fell from 6.6 to 4.5.
• Prosocial activities. The average FTE allocation for corporate social responsibility (CSR), corporate sponsorship and community relations have all seen an overall decrease from 2017 to 2020, but FTE allocation to charitable activities has grown 46%.
• Training and development. Leader/manager communications training saw a sharp decline in FTE allocation in 2020 (to 1.1 from 2.0), probably the most tangible case in which communications leaders shifted priorities rapidly and reassigned staff to address more pressing needs like change communications and health and safety. 

Polled in 2020, many comms leaders at European and North American organizations expected to increase spending in 2021 on a range of activities related to social priorities raised by the pandemic, related economic uncertainty and social unrest. B2C organizations were more likely than B2B counterparts to anticipate significant increases in such spending, however. 

B2B organizations did not seem to feel social pressures as much as B2C and hybrid organizations. They anticipated minimal changes in these same socially oriented activities, such as community relations, except for a notable drop in corporate sponsorship and marketing and advertising.

More broadly, communications functions around the world did expect to increase their spending on activities that benefit society. Expected increases in CSR and corporate sponsorship spending possibly reflect the fact that 70% of people expect organizations to take a public position on social issues relevant to their business.

Executives are also a primary channel for messages surrounding contentious issues, which may explain the increased investment in executive communications.

Gartner research also shows that communications functions that receive part of their funding from business units have higher average budgets than functions that are exclusively funded through a corporate center. 

A similar observation can be made of communications staff size. Comms functions that receive some portion of their funding from business units have more FTEs than those that are fully funded through the corporate center.

These findings suggest that comms leaders may be able to increase their budgets and staff by pursuing business-unit funding — if that’s an option. B2C organizations are more likely than B2B, hybrid or government organizations to fund their communications functions fully through a corporate center, and government organizations are the least likely to do so. 

Organization size can also affect resourcing. Many communications leaders expect their budget and staff to increase in size as their organization’s headcount rises, but Gartner research shows this isn’t the case. 

Functions that serve larger employee populations have smaller budgets as a percentage of overall organizational revenue and fewer communications FTEs per 1,000 organizational employees. This likely suggests that organizations expect communications to achieve economies of scale.

If your comms budget is under review, knowing these budget and staffing trends — and benchmarking your organization against peers — can help you defend your budget, identify specific areas for reallocation and plan for the coming year.