Utilisation and capacity at agencies

I’m constantly asked about utilisation and capacity at agencies as part of consultancy projects, so I decided to start off my blog by addressing this issue.

Does the agency have enough capacity to take on the job? This question isn’t really raised during the pitch. In times of increasing competition, it’s a top priority to just secure the job, then deal with it.

But if you want to be well prepared and plan ahead, a crucial question needs to be asked: Is the agency being fully utilised, how many hours have already been scheduled? What does it mean for a staff member or agency to be fully utilised (incidentally: the staff member’s perception and reality are often two different stories)? How does the agency compare to others? It’s easy to get carried away here.

But how do I calculate these key figures so important in the planning stages?

Let’s start by assessing current utilisation – this can be easily determined using timesheet data: The ratio of customer-related to agency-related time. But anyone expecting to find 100% utilisation of staff members, most of whom presumably work in a customer-oriented manner (e.g. graphic designers), is mistaken. Customer-oriented time of nearly 100% over longer periods of time can only be based on incorrect entries, because a working day usually also involves organisational activities and meetings. To provide an industry benchmark here: Productivity values (customer-related times) of 60% to 75% are realistic for staff whose work predominantly revolves around customers.

The agency’s utilisation is incidentally also an excellent indicator of how the agency and new business are progressing.

But how can you find out how many hours the agency has already scheduled? The hours put into budgets for assigned jobs very quickly come into play here. Based on this, you have a crucial overview of the man-hours (and days) set. Job scheduling may be another planning factor.

This information provides the best basis for deciding whether new jobs are feasible with the existing staff, or whether freelancers need to be called in.

Capacity and utilisation at agencies is a very broad issue, and I have only scratched the surface of it today. In future, I will be discussing this and other topics here in more detail.