Creating a culture of "honest hours"
Do you feel pressured to fill every single minute of your 8 hour time sheet with chargeable time? Where is that pressure coming from? If it’s coming from within your agency, then that may be doing your agency more harm than good!
Let’s look at a typical Account Manager’s day. You get to work at 8:30am, chat to your colleagues and wait for your computer to start up. You get a coffee and spend a few minutes scanning and prioritising your emails. You do some chargeable work for a couple of hours, have a bathroom break, an internal team meeting and another coffee. Can you see a pattern happening here? By lunchtime, how much of your day do you think was truly chargeable to your client? Certainly not 100%…maybe not even 80%.
Let’s now look at a scenario in your design studio. As the main person responsible for quoting and invoicing your client, you rely heavily on your team recording their hours accurately. That is the only way you can accurately know the profitability on a project.
The best and most accurate way to capture design time is with a start/stop system. The designer clicks the timer to start work on a job, and clicks it again when they finish. The resulting time is accurate down to the minute. Some job control systems will record time in blocks of 5 minutes, 10 minutes or even 20 minutes (that I saw in one studio). In this situation, your designer is more-than-likely “estimating” the amount of time they spend on a job. Perhaps they get to the end of their day before they fill in time sheets and have to remember what they did and how long they spent. Here’s where this type of estimation, or block-timing can come unstuck:
Example of a 4-day timesheet for the Acme Widget Brochure:
Actual time spent: 5 min + 13 min + 38 min + 47 min = 1 hr 43 min
Time if recorded in 10 minute blocks: 10 min + 20 min + 40 min + 50 min = 2 hrs
Time if recorded in 15 minute blocks: 15 min + 15 min + 45 min + 1 hour = 2 hrs 15 min
There is a big difference between 1 hour 43 min and 2 hrs 15 min. If you charge $140/hr for design, that’s an inflated $70 your client has to pay!
What if your designer is working within a culture where they feel they have to make themselves appear busy, or are being pressured to record billable hours? Do you think they would try and fudge their time sheet now and then (or regularly)? Probably.
It’s critical that an agency records accurate (and all) time on every single job. To achieve that end, the agency has to develop a culture of “honest hours”. It’s illogical to expect employees to be billing 100% of their time as chargeable hours. If an employee can honestly charge 80% of their day to clients they are doing well; it’s important that agency staff know this.
It’s critical that an agency records time accurately. To achieve that, the agency has to develop a culture of “honest hours”.
Some tips to help maximise billable hours in every day:
- Cut down the number of internal meetings.
- Ensure internal meetings contain only relevant staff members.
- Cut down the number of agency staff attending client meetings.
- Make it very clear that inflating time spent on jobs is unacceptable.
- Ensure your time-capture programme uses the smallest block of time possible (e.g. 5 min), or is recording accurate time to the minute.
- Have timesheet codes for non-chargeable activities (e.g. breaks, administration, internal meetings, etc). This will encourage your team to put time to non-chargeable codes instead of loading project time.
- Create “quiet zones” (e.g. separate rooms, couches, etc) where staff can work if they need to concentrate on work without being interrupted.
- Encourage working from home if that means a team member can be more productive, without office distractions.
Your challenge is to take a good look at your agency systems and processes. Are they encouraging a culture of honest hours? If not, why not, and how can you help to change the situation? By making even small improvements you could help to save your agency literally thousands of dollars per year. You might even receive the gold star for the month!
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