When it comes to hot topics in the agency landscape, time tracking invariably takes center stage. After all, for many, it’s the expressway to profitability. However, this article won’t delve into the importance of time tracking—an area thoroughly explored in numerous online articles and one with which you’re well-acquainted if you’re part of an agency. Instead, let’s concentrate on ways to mobilize your team around time tracking. This practice provides crucial insights into project profitability and workload management—the lifeblood of a thriving agency.

Whose Time Is It Anyway? The Accountability of Time Tracking

Determining who is accountable for time tracking—whether it’s billable, non-billable, or both—is essential. Is it the job of the project manager, the team leader, or the head of the department? Surprise! It’s none of these. The responsibility of time tracking falls on those who are utilizing the time. While others can encourage and facilitate, it’s not their responsibility. So, why is there often a gap between knowing and doing?

Deciphering the Dilemma: Resistance to Time Tracking

There is a significant psychological aversion to time tracking; it alters people’s behavior. Nobody appreciates feeling monitored. A year-long study from April 2021 to April 2022 found that, on average, only 23% of iPhone users allowed app tracking, signaling a discomfort with constant surveillance. This underscores the feeling of scrutiny related to time tracking can lead to stress, further exacerbating resistance.

Additionally, workflow disruptions are another key deterrent to time tracking. For creatives like designers, developers, or producers, interrupting their process to record the time spent on tasks can prove challenging and disruptive to their creative flow.

Given these valid concerns, how can we alleviate the resistance and engage the team with time tracking?

A Business Orientation: Fostering Understanding

Open communication is crucial but often too abstract. In my experience, a surefire way to rally your team around time tracking is to enlighten them on the operational nuances of the business. For instance, consider a scenario where a developer is resisting time tracking. This situation presents a teachable moment where you can illustrate how their contribution directly influences the agency’s revenue goals.

Let’s say Erin the developer is resisting time tracking due to the constant context switching. What can you do?

Acknowledge the concern, of course. But use this opportunity as a teaching moment. Consider this simple example:

Erin: I don’t see why we need to track time; we know what the project costs.

You: Erin, you’re aware that we’re receiving a payment of $50,000 for this project, right? Considering our blended rate stands at $100, that gives us roughly 500 hours.

Erin: Yes, I understand we have 500 hours to complete this project. That seems like more than enough time. What’s the point of tracking it?

You: It’s important to remember that our target gross profit margin for projects like this one is 60%. This means we’re aiming to take home $30,000. After subtracting that from the total payment, we’re left with $20,000 allocated for labor. If you divide that amount by our blended rate…

Erin: “Wait, that only leaves us with 200 hours for the project! I had assumed we had a lot more time!”

You: “Exactly! If we manage to meet our profit target, we’ll be significantly closer to hitting our annual revenue goal of X. This is directly tied to our other business objectives and company bonuses. Although your job is development, your role in tracking your time is crucial in helping us monitor our actual hours and ensure we remain profitable. Can I count on your support to help the agency meet our revenue goals?”

Erin: “Absolutely, you can count on me!”

Erin now feels a part of something and knows that her contribution extends beyond coding. Her ability to track time and maintain efficiency contributes to the profitability of the project and, ultimately, the financial stability of the company.

This is why I say, “The less we know, the smaller we think; but the more we know, the greater the impact we can have.”

Pitfalls of Training: Addressing the Shortcomings

Even with an understanding of the business implications, some practical issues persist. From tracking software to how internal time and billable hours are managed, the implementation of time tracking can get messy.

Firstly, it’s essential to have an easy-to-use time tracking tool that, if possible, can automate time entries. This feature will allow your team to move 34% faster and reduce context switching.

Secondly, a simple and effective tool makes training and buy-in all the more desirable. Training, however, should be coupled with well-established procedures and policies around time tracking.

Consider the following:

Where is internal time tracked?

Does the client service team need to split out their time per task, or is there a dedicated bucket for that time?

When do timesheets need to be completed?

Will project managers check in periodically? If so, when?

Who do team members go to with time tracking questions?

If your team doesn’t know the answer to these questions, time tracking won’t fully benefit your agency.

Tracking Impact: Time Tracking and Its Effect on Profitability and Workload Management

Having clarified the rationale behind team buy-in for time tracking and the necessity for training, it’s vital to measure the impact of these efforts on your agency’s productivity rates, profits, and even employee workload capacity. Remember, the fruits of your labor may not be immediately evident, but over time, you will see the gains.

For instance, you’ll be able to analyze the agency’s productivity rates. Look at how the projects have been managed since time tracking buy-in increased. Have you seen a rise in on-time deliveries or has utilization decreased? It’s been reported that 41% of employees are distracted by emails, Slack, and other notifications. There may be opportunities to improve the use of time, productivity, and by extension, workload capacity.

Next, take a look at your profits. Are your margins improving? Do you find it easier to hit your fiscal year revenue goals? Studies show that businesses that address time leak issues by implementing agency-wide time tracking stand to gain a 61% boost in revenue.

When everyone is on board with time tracking, you gain additional insight into how time is used, enabling you to identify inefficiencies and address them.

In summary, overcoming resistance to time tracking can significantly enhance profitability and improve workload management. However, it’s crucial to remember that each team member holds the key to this change. In helping your team see the bigger picture—that their individual efforts significantly impact the agency’s success—you can foster buy-in and reduce resistance.

Adopting a simple-to-use, and even automated system, coupled with effective training, will not only keep your agency running smoothly but also enhance the potential to hit and surpass your profitability goals. The more data you have at your fingertips, the greater the impact you can make. Remember, “The less we know, the smaller we think; but the more we know, the greater the impact we can have.”