How much (can) a project manager be paid?
Every year, the Project Management Insitute (PMI) conducts a global survey on project manager salaries, which results in a PMI salary report It has also been published in 2020.
Unfortunately, the domestic market is not large enough according to the PMI to draw any firm conclusions based on the respondents, so Hungary is not included in this publication. (The same is true for the Austrian, Slovak, Czech, Romanian or even Croatian markets.)
Although the size of the Polish market is very different from that of the domestic market, the Polish market is perhaps the closest to us in terms of published figures. In this post we will therefore analyse these figures (based on 470 respondents) in detail and compare them with our own experience.
Important information is that the survey was conducted anonymously and the figures do not include any bonuses. For simplicity, the Polish figures have been calculated using the exchange rate of 1 Zloty = 80 HUF.
Application or mandate?
Unfortunately, the salary report does not define the term "salary", so it is not clear whether it is considered to be a salary through the status of employee or even the income earned by freelancers before tax. In our experience in this country, there are two typical ways in which sponsors and project managers can be linked:
- traditional employee status
- the temporary employment of freelance freelancers on a contract basis
According to a PMI survey of the Polish market, the average salary for project managers is 180,000 Zloty, or more than 14.5 million HUF at the previously quoted exchange rate. Of course, the picture is nuanced by the fact that this average includes project office managers (PMOs) with more than 247,000 Zloty, or almost 20 million HUF. If we look at the annual figures for project managers alone, depending on experience, this figure ranges between 136,000 and 184,000 Zloty, or roughly between 11 and 15 million HUF.
Of course, the report also covered the project management ratings, and as every year there is a significant difference between the PMP certified project managers in favour of.
Based on our own experience, the domestic figures are not very different for employees.
What about freelancers or contracts for hire?
In our experience in Hungary, freelancers most often undertake projects on a time-based basis, which can be based on a daily rate of around HUF 50,000-100,000 depending on experience and industry knowledge. Based on this, even averaging the after-tax profit, it may seem that this arrangement is the most profitable for project managers and sponsors, but there are a number of items to consider:
1. Predictability
In an employment relationship, it is of course the employer's task to optimise the workload of the employee, and for project managers the financial side of the job is predictable, but for freelancers it is not so simple. It is very typical for freelancers that months can pass between projects without any specific task and therefore without any income. So in many cases, project managers prefer longer projects that seem more "secure", and daily rates are seriously affected by the fact that they often have to work 8-10 months per year to reach their annual target revenue.
That's 8 months of 20 days a month working for an average daily wage of 80.000 HUF and 12.800.000 HUF, of which of course the various taxes are still to be paid.
2. Freedom and bonuses
For freelancers, paid leave is not meaningful if they go on holiday or are unable to work due to illness, the sponsor will not fund this. In this case, bonuses are also very rare; even for good work, the freelancer will only be paid the daily rate.
3. Use of tools
Also, due to the mandate of self-employment and the nowadays very popular KATA taxation, sponsors cannot/will not provide funds to project leaders. So freelancers do not have access to free phones, laptops or other equipment, they have to buy everything themselves.
4. Liability
There is almost always the question of who is liable for compensation for defective performance or direct damages caused by the project manager's fault. In most cases, this is passed directly on to the freelancer in the case of assignment contracts, which means that liability insurance and potential damages can be a major cost or risk in projects that often have a high budget.
5. Intermediary fees
Most project managers come to the attention of the organisation through intermediary companies. This is partly because companies do not want to contract with tens or even 50 individual contractors individually, they want centralised responsibility (in this case, intermediaries) and they also want to avoid ambiguous employment issues. As compensation for this, and for ensuring the replacement of project managers, intermediaries often set very high commission rates for intermediaries, up to 40-50% per day.
It is therefore worthwhile to choose the right scheme in the light of the above. There are, of course, well-known solutions, such as Jooble, which regularly offers hundreds of offers to those looking for employment opportunities.
For freelancers and companies looking for freelance capacity, we recommend our ProjectBuzz platform, where companies can find the right expert to lead their projects either with a monthly subscription without traditional agency fees or at a reduced 20% commission. This solution can reduce company costs by up to 80-90%, depending on the volume, without reducing freelancers' daily rates.
What do the international figures show?
The PMI survey is free for everyone on this link, but we have highlighted some interesting findings from the survey:
- The highest median annual wage is in Switzerland (132.000 USD)
- The lowest median annual wage is in Egypt (USD 14,000) and the lowest in Europe is in Turkey (USD 28,700)
- A bigger project does not necessarily mean higher wages
- Project leaders surveyed in all countries work over 40 hours a week (43-49 hours)
- Around a third of project leaders surveyed said that their expectations are not well defined
- There is a wide variation in the use of project management career paths, with 15-44% respondents saying that they do not have one in place in their company
- Most project managers (over 95%) expect a pay rise in the coming year
Designabc