Are you misspending a valuable asset?

Hey, everybody. Drew McLellan here from Agency Management Institute this week coming to you from Ithaca, New York. We talk a lot about billable time and how we record time, how we track time, does that time actually translate to an invoice, what do we do with all the time we write off? But we spend far less time thinking about the non-billable time. When Danyel and I come into an agency and do an assessment, in many cases, when we look at the average amount of billable time being spent in that agency, it's under 50%. Now remember, four out of five employees you have should be Uber billable, meaning they're billing at 75% or higher of their time. So if your agency as a whole is under 50% then we know we have a problem. So the question is, where is all of that non-billable time going.

Number one you must track all time. That non-billable time you pay the exact same amount per hour to the that employee when they're doing something billable for a client or they're not doing something billable for a client. So you want to –you want to make sure that you value every hour of your team's time at the same level, regardless of how it appears it's being spent. So number one, we have to track all of it.

Number two, we need to start digging into those timesheets to see where that time is being spent, maybe spent exactly where you want it to be. It may be spent on grooming younger employees. It may be spent on professional development, kind of sharpening their own saw. Might be spent on new business or agency marketing, but it can also be spent on wasted meetings. It could be spent on things that you actually had no idea the employee was working on. They think they've gotten a directive on something, and that's not what you wanted them to do at all. Or it could be misappropriated time where actually should be billed to a client, but is being miscoded on the timesheets. You can't know the answer to any of those questions, and you can't redirect that time without actually spending time in timesheets, taking a look at reports, and figuring out how that time is being spent.

In most cases, when agencies pay attention to non-bailable time, a couple of things happen. Number one, they eliminate some things that are happening in the agency that aren't really of a high value to the agency. Again, might be wasted meetings, people in meetings that don't need to be there, whatever it may be. They actually identify some billable time and tasks that are being misrecorded. They are paying more attention to how much time, even, even noble acts like we're working on agency marketing. Do we need to spend $300,000 of time on agency marketing? Maybe not. And they also have a better sense of who has bandwidth so that we can move work around from people's plates. You might have somebody who's billable at 80% and somebody who's billable at 50%, and you could shift some things when you actually pay more attention to where that non-bailable time is going. So super important, do that this week, and I will talk to you next week.

Thanks.