The billable hours conundrum for professional services firms
It is harder to work in a professional services firm than in corporate. Knowing that you have to do a certain number of billable hours is a lot of pressure until you actually stop thinking about it.
In fairness to our accounting and legal counterparts (who charge-out rates are significantly higher), marketing is a walk in the park. While sometimes we have to think or be creative, the pressured hour is less pressure and more co-ordinating marketing activities, as once the strategy has been written, it's just executing.
Sure you have to think about what goes into an electronic direct mail piece, but the client pays for that time to 'think'. So, there's no pressure there... just a requirement for you to come up with something that is on-brand and works for the client.
Recently, we started analysing data related to employee performance. We want our team to love working at Marketing Eye and not to feel the pressure of normal agency life, but the reality is that there has to be a certain amount of billable hours per person, and when the numbers are calculated, each employee has to bill at a bare minimum three times their salary.
Of course, that's not the case and while we don't want to put pressure on them, we know that things have to change. But employees hate change in this area and as a company we will be navigating this with care and consideration.
The push back creates discussion with the leaders of the pack determining employee moral. It's a tough position to be in but as we all know, businesses need to prosper in order to grow and create more jobs. As an employer who doesn't take the profits away from the company and constantly re-invests it, I know that this is a move we had to make to move forward and keep on building a sustainable business that everyone can profit from.
We use to just focus on how many clients a marketing manager would manage, but when the numbers are done, it highlights a huge gap as some clients require mostly digital work done by other areas of the business. So while people may manage what would seemingly be a lot of clients, their actual workload may still be light.
It's challenging times on this front and we are hoping that employees understand what we are doing and how it will ultimately lead to a higher performing office and better bonuses.
Leave a comment
Make sure you enter all the required information, indicated by an asterisk (*). HTML code is not allowed.
comment ( 1 )
Jess Hadley
21 Jul 2015Hi there
ReplyJust saw this article on billables and wondered if you had ever considered value based pricing instead. Price the work based on results (what the client pays for - they don't care how long you think for, just that your thinking gets results). Price it up front on a range of factors, bill upon stage completion. Remove time sheets from the equation and use project management, reward based on kpis aligned with various factors (different for different people - one size doesn't fit all..). There's a range of professional services firms doing this - legal accounting and yes marketing too - TimWilliams of Ignition group is a great writer on the topic. Best thing is clients love it, certainty of price trumps chThere's heaps of resources online at verasage.com - all fellows are open to connecting & sharing their thoughts with you.