Why Utilization Rates are Key to the Success of Digital Agencies

If there’s one guarantee about life in the digital agency world, there won’t be many dull moments.

It’s full-on and fast-paced, which is why most of us love it, but with that speed comes the potential to take your eye off the ball when it comes to the behind-the-scenes of your own business.

Let’s face it, most digital creatives don’t get into their job to think about utilization and time-tracking. But failing to get to grips with your employee utilization rate can limit business growth, hinder staff development and lead to poor decisions based on gut feeling instead of fact. This blog looks at utilization rates, what they really mean, and how understanding your agency could be truly transformational for your business.

What Exactly are Employee Utilization Rates?

Utilization rates measure how much time staff is spending on client work (chargeable hours) versus work that isn’t directly bringing in any income.

For example, writing social media posts for a client would be chargeable work, sitting in a meeting about how the agency is planning to attract new clients isn’t.

What Rate Should an Agency Be Aiming for?

This is a bit of a ‘how long is a piece of string’ question because the answer will vary from agency to agency, and what’s right for one could be wrong for another.

According to Agency Works, the industry average utilization rate is around 65%, however, an ideal figure would be 75%. But things are rarely as simple as this and comparisons between your agency and...