“Time is money”… one of those embarrassing clichés reserved for terrible films and 1980’s workplace spoofs and yet – within service industries – it’s an adage that rings painfully true. Take your typical agency; depending on location, the staff cost could be anywhere between 45% and an eye watering 75% of gross profit, while the ‘time’ of said staff normally generates close to 100% of revenue.
Despite this glaring correlation, it is not unusual to see employees at all levels of agencies who view timesheets as a dreary administrative distraction or worse, a big brother exercise, designed to keep tabs on coffee breaks.
In other industries, not understanding your biggest cost base would be unthinkable. Imagine a car manufacturer who didn’t know the cost of its engine parts? Or a distribution company that didn’t calculate the average cost of a return?
An agency without timesheets is operating blind. Timesheets allow agencies to determine how efficient their workforce is and importantly, to understand how the biggest source of customer value is driving profit within their own business.
Everyone who has ever worked in an agency will be familiar with this scenario: Demanding client shouts loudest, is over-serviced at the expense of less demanding client. Less demanding client…leaves. Without timesheets – and the data led reports they produce – account managers are ill equipped to tackle these problems and many more.
We also understand the resistance:
- “Are you saying the focus should always be on servicing clients to an exact number of hours?”
- “When will we have time for creativity if staff are 95% focused on billable work?”
- “Timesheets do not fit with the culture of our agency!”
The answer? Timesheets should be managed and communicated like any organisational change. There is always room for flexibility but better to be flexible with eyes open and to use the raw data as one component to inform decisions.
And that’s what it boils down to. Raw data. If an agency can properly implement timesheets, it can understand utilisation within the workforce, profitability within its client base and better determine future resource requirements. Effectively, it has the tools it needs to make decisions that keep it profitable.
If you’d like to understand more about how to implement timesheets effectively, please get in touch. We can support you through the process and ensure you consider the right internal communications, manage the cultural change and drive the optimal set up.