An agency with growing paid search demand has two ways to meet it: hire someone, or bring in an external specialist. Most of the advice on this reduces to “it depends,” which is useless. Here is the actual arithmetic and the threshold where the answer flips.

The cost comparison people get wrong

The instinct is to compare a specialist’s monthly rate against a salary. That comparison is wrong in both directions.

A hire’s real cost is not their salary. It’s salary plus employer taxes and benefits, plus tools and platform certifications, plus the recruiting cost to find them, plus the ramp period where they’re paid but not yet productive, plus the management time of whoever supervises them. In most markets that lands somewhere around 1.25 to 1.4 times base salary, before you count the risk of a bad hire.

But the external specialist comparison is also wrong, because you’re not buying their time — you are buying it only when you have work. A hire costs the same in a month when two clients paused their spend. That difference is the whole decision.

The threshold

The question that actually decides it: how many hours of genuine paid media work do you have per month, and how stable is that number?

Rough guide, based on what I see across small agencies:

  • Under ~40 hours a month: external, without much debate. A hire is idle too often, and idle senior capacity is the most expensive thing an agency can carry.
  • 40 to 80 hours, unstable: external. The volatility is the argument. If the work disappears when one client churns, you don’t want it on payroll.
  • 40 to 80 hours, stable and growing: the genuine gray zone. Often a hybrid — hire a mid-level person to run day-to-day, keep an external specialist for audits, escalations, and the platforms they don’t know.
  • Over ~80 hours a month, stable: hire. At that volume you’re paying external rates for what is functionally a full-time role, and you should own the capability.

Note the “stable” qualifier doing the work in that list. Two agencies with identical hour counts can land on opposite answers if one has three clients and the other has twelve.

What each option is actually good at

Hiring wins on: availability, accumulated context about your clients, culture, and building an institutional capability you own. Someone in your standup every day will notice things a contractor never will.

External wins on: seniority per dollar, speed to start, no ramp, exposure to accounts outside your portfolio, and the ability to stop. You can hire someone senior for one week a month at a level you could not afford full-time.

That last point is underrated. An agency that can’t justify a $110k paid search hire can very easily justify a fraction of that person’s month.

The hidden cost of hiring junior to save money

The most common mistake is hiring a junior specialist to keep the cost down, then discovering nobody at the agency is senior enough to supervise them. You now have someone learning on client accounts with no feedback loop, and the agency finds out how it went at the renewal.

If you hire junior, budget for supervision — internal or external. A junior with a senior reviewing their work monthly is a good arrangement. A junior alone on client accounts is a slow churn problem.

A reasonable sequence

For most small agencies the path that works is:

  1. Start external on a bounded scope, so you learn what the work actually requires.
  2. Watch the hours for two or three quarters, and whether they’re stable.
  3. If the volume holds above the threshold, hire — and use the external specialist to help write the job description and screen candidates, since they now know your accounts.
  4. Keep a smaller external relationship for the specialties your hire doesn’t cover.

Step three is the part people skip. Someone who has run your accounts for six months is far better positioned to define what you need than a generic job template.

If you’re in the gray zone and want to think it through against your actual numbers, here is how I work with agencies.