Why we tell our subcontractors how much we’re getting paid

It’s no secret that businesses can be a bit shady when it comes to pay. Stories of overworked, underpaid employees and contractors struggling to get what they’re owed are common. But while industries like tech, construction, or even healthcare often get called out, there’s one sector that’s often overlooked: marketing and branding agencies.

These agencies are often just as guilty of questionable practices when it comes to compensation. Behind the glossy campaigns and creative buzzwords, there’s a troubling reality: Subcontractors who actually do the work are often kept in the dark about how much money is changing hands.

After decades of experience at agencies big and small, we’ve taken another path and found that embracing transparency isn’t just ethical—it can help retain clients and talent. Here’s why it’s time to stop the nonsense and get real about pay.

The Subcontracting Gambit

First, a little background: Subcontractors are a dirty little secret of many creative campaigns.

To be clear, there isn’t necessarily anything wrong with using subcontractors. Small and growing agencies on a feast-and-famine cycle need contractors to do the work that would otherwise be done by full-time employees. Even large agencies sometimes have a valid need for one-off expertise that they don’t have in-house. But it’s often just about squeezing profits.

The problem occurs when contractors are deceptively marketed as employees, falsely indicating a fully staffed agency. The reality is they’re simply on a “roster,” to be called upon, should their particular skills ever be required for a project, even if that’s very infrequent.

Sometimes, one agency might bring a different agency on board and have them “white label” their services. There are even times when the subcontracted agency interacts with the client as though they were an internal part of the team. I once had to hand out fake business cards, with my name but the other agency’s details, so the client thought I was one of “them.”

Subcontractors and subcontracted agencies rarely ever know the real value of the project they are working on (i.e., what the hiring agency is getting paid by the client), and they usually have no choice but to accept whatever fee is being offered if they want the gig. Otherwise, the hirer will simply move on to someone else.

To be sure, some contractors like this system, as it gives them the flexibility to pick projects, focus on what they love, and take time off when needed. But for many, especially those starting out, it’s a nightmare. They end up underpricing themselves so they don’t get passed up, facing unpredictable income, no benefits, and constant uncertainty—all while agencies take a huge cut.

Doing Better by Embracing Transparency

Early in my career, I was interning at a small firm when we were hired by another firm to provide branding services for a large pharmaceutical company. We had no designers on staff so we hired contractors we had amicably worked with in the past.

During a meeting that included the client and subcontractors, the total fee the primary agency was receiving was brought up. This was unwelcome news to our designers, who felt their compensation was not commensurate with their workload. Their request for additional payment was denied, which led to a rather tense and uncomfortable situation. Ultimately, though we finished the project to the client’s satisfaction, our relationship with those designers never recovered.

That is the kind of situation my current business partner and I decided we must avoid when we started our own agency. We wanted to do better because we believe that being transparent doesn’t have to mean sacrificing success. To that end, we’ve established several internal guidelines that have proven highly effective.

Given that we’re still small, we do use contractors, but we do it differently. We don’t present a broader team that includes contractors on our website and clients know when we’re using contractors or a partner agency. We inform them of our relationship and the work we’ve done with those contractors in the past.

Further, all our files, including client contracts, are accessible to all contractors working on a particular project. That way they know all the work we’re doing for a client (including parts they’re not involved in), how much we’re getting paid, when we get paid, and even how we’re splitting the pay. While it sounds simple, this is a radical approach.

Building a Foundation of Trust

Being transparent about our working relationships with contractors hasn’t cost us a single project, whether it was brand positioning, architecture, or visual identity projects. In fact, we’ve received positive feedback on multiple occasions, from both clients and contractors, lauding our approach.

Being transparent helps us avoid awkward, and sometimes contentious, situations about payments and builds a more meaningful, trusting, and collegial relationship with folks we absolutely love working with. And this is setting us up for future growth—we would like to bring some of those talented contractors in-house as we scale our firm.

As the branding industry continues to evolve, we believe it’s time for a shift toward greater transparency in our working relationships. While change can be challenging, especially for established agencies with ingrained practices, the long-term benefits can far outweigh the short-term discomfort.

It’s time for the agency world to lead by example, applying the same principles of authenticity and trust that we advocate for our clients’ brands to our own business practices. As we move forward, we hope to see agencies adopt similar practices, creating a more equitable and sustainable industry for all involved. After all, in a field built on establishing communication and trust for our clients’ brands, shouldn’t we start by being honest with each other?