Compensation and Benefits

How many hours should ad agency employees work?

How do you track billable time in an agency, and how many hours should ad agency employees work? This is a question that comes up all the time in my work with agencies.  The expectation in terms of a work week ranges from 37.5 hours a week to 50 hours a week although most agencies will say 40 in terms of hours worked in a week.  So that gives us a range from 1950 hours a year to 2600 hours a year with most people citing the 2080 hours a year number (40 hours/week).  But given an average of 3 weeks of time off (vacation and sick) and 10 work holidays (which translates to 5 weeks off) that gets you down to 1762.50 (37.5) to 2,350 as a range with 1880 hours a year being the 40 hour work week average. So when you think about how you're going to track billable time, the rule of thumb is that no employee can be billable 100%.  So here’s the best practices expectations by job function: Project Managers/Production Managers — 80% which is 1,504 hours at the 1880 hours in a year model Sr. Account Staff who have more admin/new business responsibilities — 70% which is 1,316 at the 1,880 hours in a year model Account Executives (jr and mid range)  -- 80% which is 1,504 at the 1,880 hours in a year model Creatives (writers and art directors) -- 75% which is 1,410 at the 1,880 hours in a  year model Media — 90% which is 1,692 at the 1,880 hours in a year model   And then you have your admin folks, who if you can get 25% billable time from — that’s great. The [...]

Salary increases should be tied to profitability not longevity

Nope. An annual salary increase should be tied to profitability not the calendar. We don't recommend automatic annual salary increases. What we do wholeheartedly recommend is a salary plan that is fair and rewarding to all employees that inspires them to go above and beyond for the agency and its clients. You don't reward someone with an annual salary increase just for being on staff or holding down their position for another year. You reward them for their contributions and their added value.  Unfortunately, many employees feel entitled to a salary increase every year, and are very vocal when they don't get one. Somehow, salary has become an entitlement program. "The longer I stay, the more I should be paid." Sorry, I don't buy it. My concept of a good salary/compensation plan for advertising agencies  includes four basic elements: Profitability of the agency The responsibilities of the person's job and their contributions to the profitability Did they get better at their craft (are they adding new value) How long have they been a part of the team It boils down to rewarding the results you want. Profitability has to come first. You can't increase salaries if you aren't making a profit. The first responsibility of every employee should be to help the agency make a profit. I believe it is the agency's responsibility to keep employees even with the cost of living, and that employees should receive a piece of the profits the agency earns. The agency made the profit because of the combined efforts of the staff. Responsibilities vary with the position and with the person. It's obvious that a senior art director will make more than a graphic designer. The responsibilities are different. If [...]