Understanding Your Media Labor
When you understand your labor model, you can answer the following questions:
- - Can you bring in more media clients with your current staff?
- - Do you have too much staff? Not enough staff?
- - What are your people actually working on and where are they spending their time?
- - Are your people working on the things most important to your agency?
- - Is the client bringing in the most revenue getting the appropriate staff allocated to their work?
- - Is the client who’s squeezing your margins the most also sucking up the most of your employee time?
- Are you using your media resources appropriately?
Because you are investing time and resources into each client, you want to track the rate of that investment. If some have a much lower profit margin when you consider the amount of time employees must spend to maintain them, it may suggest a need to raise rates for those clients.
Most business types need to know how employees are spending their time to set rates and determine if they are over or understaffed. As a service-based business, this is even more important for advertising agencies. The Employee Utilization report shows the percentage of a staff member’s available time spent on billable projects. For example, if an employee had 180 eligible hours in one month and spent 90 hours on billable projects, their utilization rate is 50%.
The Importance of Time Tracking
Do you track time for your employees? If not, you’re missing very important information to determine the success of your agency. For service-based industries like advertising, time tracking is critical. Without it, it’s impossible to see the full picture of your business.
Without information about employee hours, you would be unable to run a complete Client Profitability Report. And with no employee time data, running an Employee Utilization Report is impossible.
Perhaps you tried (and failed) to get your staff to do timesheets in the past. But it’s worth your while to figure out a way to make it work. Over-worked employees are subject to decreased productivity and burnout. Knowing how many hours they work tells you if you need to hire more people. The same is true for under-utilization. Avoid employee downtime by tracking hours.
It should come as no surprise that the most accurate and useful measurements of your employees are generated by integrating data points across activities, departments and even competencies. The more data points your employee profile has, the greater the insights you'll have.
How profitable is your media?
Make sure the tools you’re paying for are also able to tell you how you are using your staff.
With Agency Management Software there really isn't an excuse for incomplete profiles, lost data or cumbersome systems anymore - especially when an all-in-one system like Advantage can actually cost less than maintaining multiple software subscriptions and non-integrated programs.
Advantage Software is perfect for advertising agencies, creative and production shops, public relations and marketing firms. Hundreds of agency use Advantage for Accounting, Project Management and Media. We build our software with the right mix of browser-based and other integrations that maximize productivity, efficiency and profitability. Find out how we can help you by contacting us for a demo.