The mid-level staff of PR firms, from which most agency income
derives, bill clients for approximately 75 percent of their time on
the job, according to a new survey by the Counselors Academy of the
Public Relations Society of America (PRSA).
In light of the survey findings (see table below), PR NEWS spoke
with agency executives about ways to manage employee billable time,
which is a crucial determinant of PR firm profitability.
While mid-level staff have the highest rates of billable time,
the PRSA survey shows that the lowest percentages of billable time are
found among support staff and among agency partners and owners. This
result is not surprising, given the administrative responsibilities of
both groups; however, competitive pressures almost certainly are
compelling higher billable hours for firm owners than in the past.
Any conclusions about the survey findings relation to the overall
agency market must be tempered by the high proportion of small firms
among the respondents: 62 percent of the 80 firms responding bill $1
million or less annually.
Firms Hit Their Targets
The survey showed close correspondence between average billing
levels and firms' billing goals. When asked about the significance of
the survey, Steve Erickson, executive director of the Counselors
Academy, said, "One of the messages here is that if you make your
goals higher, production may go up."
Al Croft, management consultant to PR firms and author of
"Managing A PR Firm for Growth and Profit," (Haworth Press, Elmira,
N.Y.) says that a realistic goal for billable time is 80-85 percent a
day per person, with the most highly competent, least costly people
billing the highest percentage of their time. These persons usually
are junior executives. Much of the administrative, managing, and new
business work is reserved for senior-level executives.
Obviously all hours cannot be billed, but Croft says that any
work for a client that prevents you from doing work for another client
should be considered billable time.
Croft sees the task of meeting billable hours targets as a
"juggling act," involving looking into the future to plan, and
changing weekly schedules to fit the needs of the business and the
people in it. He says that "nothing in the agency stands alone," and
"you can't set a single standard, you must look at all circumstances
and anticipate the ups and downs of the business."
Billing Incentives
Firms like Politis Communications, Sandy, Utah, have rewards and
benefits for employees who exceed billing rate targets, so they know
that they are appreciated. President David Politis wants from each of
his six employees an average billing time of 36 hours per week. He
says this gives them plenty of time for administrative work in
addition to client work. When they surpass their goal, they are
recognized on an individual employee basis, through bonuses, free
dinners, theater tickets, or ski passes.
Larry Kamer, a principal with San Francisco firm Kamer Singer &
Associates, also rewards employees for exceeding billing targets. But
he says that most bonuses are tied to performance and client service,
rather than billing targets.
Meetings Aid Productivity?
While staff meetings often are criticized as time wasters,
Politis sees his weekly staff meetings as vital to productivity. "The
first step in increasing shop productivity is making the employees
aware of everything that's going on," he says. He typically schedules
meetings before noon, and tries to keep them short. (Counselors,
212/995-2230; Politis, 801/569-2592; Croft, 520/284-9054; Haworth,
607/722-5857; Kamer, 415/512-6800)