Winning a bid for a complex project is an exciting milestone, but before the celebrations are over, reality can kick in. How are you going to ensure you deliver on time, within budget and with minimal risk? That’s where project management comes in and you may be wondering, what’s the best investment for your business? As project managers vary so widely in experience, you might be thinking, how much does a project manager cost?
Key roles need filling quickly after the business development or bid team hands it over to the delivery team. Project management is a profession, not a task that you can give someone alongside another full-time job. The qualifications and training are not regulated; however, they are globally recognised with well-established professional bodies to support people working in project management.
Beyond cost, there are other important considerations to getting a good project manager onto the team. Below we’ll look at the different options to recruit someone into a project management role, costs for each and what you might think about before you hire someone.
Before you look at the cost of a project manager
Before looking at the project manager cost and crunching the numbers, take a step back. What does your project actually need? Costs vary dramatically depending on several key factors. Consider the following before making your decision:
- Team dynamics – what’s the mix of characters involved?
- Complexity – how much knowledge or experience do you need in your project office?
- Reporting structure – who are the key stakeholders they’ll be working with? Who will they report into?
- Location – where is the project based; client site, main contractors and headquarters?
- Company culture – what kind of person do you want to recruit?
- Duration – how long is the project and will you have other projects to offer them a permanent role?
Cultural fit, personality type and commercial knowledge matter enormously because if you’ve noticed, some teams run smoothly simply because there is a good balance and variety of types of people. If you’re subcontracting into a complex project, the prime contractor will have touchpoints for every part of the project, to coordinate your work with other subcontractors and the main client.
If your delivery team are all engineers or technical specialists, they’ll benefit greatly from someone else monitoring the time, costs, stakeholders and inter-dependencies.
How to fill your project manager role
There are four ways to find someone to fill the role of project manager, where each have differing costs. Yet as with every choice, there are advantages and disadvantages of each:
- Move someone internally into the role – you may already have someone capable within your organisation who would be ideal in terms of their project and company experience or someone who is training as a project manager and wants the opportunity to stay within the company with new responsibilities. However, the former may not have the capacity to support your project and the latter may lack the experience of running complex projects.
- Recruit a new staff team member – hiring someone with external skills means the project office gains the fresh perspective of someone outside your organisation, with all the professional project management training already paid for. However, recruitment can be challenging in the current economic climate, as can be finding the right fit for your company. You also need to be ready to carry the salary and benefits cost of the extra headcount.
- Engage an independent contractor – when you hire an independent project manager on a short-term contract, you’re bringing in a flexible skillset with ideas and experience that can have a significantly positive impact on the overall capability of the delivery team. You can ensure they’ll fit well with your company during the initial meeting and know that they won’t be there for long if it is not perfect. However, their costs will be higher than a staff equivalent and they may also insist on a short notice period. They are usually embedded into your organisation and limited by their capacity and resources as a result.
- Partner with a consultancy – with a project management consultancy, you will generally have access to a wider range of skillsets and, depending on the size of the company, will have strong commercial knowledge from running a business themselves. With broader and deeper project experience because of the range of sectors and projects they get involved in, they can share best practice. Their perspective can bring fresh ideas, methodologies and new systems into your business to help you increase efficiency. Depending on size, they will likely have capacity to increase their resource input or decrease it, based on what you need during the project. However, the fractional support offered may not suit your business model or the structure of the business, and costs can vary dramatically depending on the type and size of the consultancy you partner with.
| Hiring Option | Pros | Cons |
| Internal Staff | Knows the company culture; Long-term value | May lack capacity; Training costs |
| New Employee | Fresh perspective; Dedicated resource | Hiring cost; Permanent overhead |
| Independent Contractor | Flexible; Highly skilled | Higher daily rate; Shorter commitment |
| Consultancy | Broad expertise; Scalable support | Costs vary widely; May not fit all models |
How to estimate your project manager cost
If you recruit a new team member, you’ll have an initial recruitment fee of 1-1.5% of the salary for the recruiter. Then, you’ll be paying for full-time hours starting at £37,000 up to around £60,000 as an annual salary. If that were broken down to a day rate equivalent, it is £140- £239 per day or for comparison, your project manager would cost £18-30 per hour. However, that does not take into consideration any sick pay, benefits and pension contributions, or any training time that you’ll need to fund as part of their role.
Engaging an independent project manager on contract in the UK can cost between £550 per day and £900 per day; depending on the sector and for someone with a lot of experience. If you look at the hourly rate for a project manager in construction, contractor rates are normally £50-£75 per hour. When you look at the cost over a period of six months, working five days a week, it equates to between £52,000 and £78,000.
When partnering with a project management consultancy, they’ll often send you a proposal outlining their solution and the project management skills and experience needed to support the project. They may offer you a project control service including cost management and integrated planning to support the project management. Depending on the scale of the project, consultancies will often have access to complimentary services such as commercial management or strategic management such as access to a project director. The overall service may be priced as a lump sum or a monthly fee. Alternatively, the individual services may be proposed as a reimbursable cost based on hourly or daily rates. Whichever cost model you agree, and depending on the size of the consultancy, costs can vary dramatically.
From our experience, expect to pay anything in the following ranges per hour:
| Expertise | Lower | Higher |
| Project Director | £80.00 | £120.00 |
| Project Manager | £70.00 | £100.00 |
| Commercial Manager | £70.00 | £100.00 |
| Quantity Surveyor | £60.00 | £80.00 |
| Planner | £60.00 | £80.00 |
As an example, for a project requiring a mix of expertise above blended and providing a fractional service equivalent to 2 ‘full-time equivalents’ for a six-month period, these costs may range from £138,000 to £193,00.
| Hiring Option | Cost Breakdown |
| Hiring a full-time project manager | Annual salary: £37,000 – £60,000 Equivalent daily cost: £140 – £239 per day Additional costs: Pension, benefits, training, sick leave |
| Engaging an independent contractor | Hourly rate: £50 – £75 Monthly cost (assuming 20 workdays): £8,000 – £12,000 Six-month contract: £52,000 – £78,000 |
| Partnering with a consultancy | Hourly rates: £60 – £120, depending on expertise Blended service (e.g., two full-time equivalents for six months): £138,000 – £193,000 |
Making a sound investment
Project manager cost varies significantly depending on the hiring route. However, a skilled project manager or project leadership team bring so many benefits: improved efficiency, risk mitigation, better communication and stakeholder alignment. These can be the difference between project success and costly overruns. Ultimately, the right investment in project management can lead to saving time, stronger client relationships and greater profitability from the complex projects you’re involved in.
Whether you need short-term support, a long-term team member, or expert consultancy guidance, you know more than anyone else about your budget and goals.
If you’re considering your options, why not book a chat to explore what would work best for your business? Book a call or complete our contact us form.
