by Arianna Campbell, Director and Amanda Wilkie, Consultant
A firm had a problem. They were tracking certain metrics on two staff accountants but weren’t sure what the data was telling them. Here’s what they knew:
- Employee #1 and Employee #2 had the same level of experience and were turning in work of relatively equal quality.
- Employee #1 had a high number of charge hours, while Employee #2’s charge hours weren’t meeting the firm’s required minimums.
- Employee #1 took roughly three times the number of hours budgeted to complete a project, and Employee #2 was producing nearly twice as many completed engagements as Employee #1.
Let’s say your firm had to promote one of these employees. Which one would you choose? If you were looking solely at chargeable hours, it would appear that Employee #1 was the rock star, and Employee #2 needed coaching to improve their performance. But when you expand your measurements to consider efficiency, the data paints a very different picture.
The purpose of this white paper isn’t to convince you to stop tracking billable hours. While we do feel that value pricing is ideal, especially as firms shift into more advisory and consultative roles with their clients, we also realize it’s not as simple as changing your invoicing method. Metrics like billable hours and realization help firm leaders determine scheduling, manage talent and run the business.
Instead, we want to encourage you to add to the metrics you’re tracking in your firm. Billable hours and realization can be starting metrics for measuring efficiency, but it’s by no means the only metric you should be monitoring. In this white paper, we’ll share the reasons traditional metrics fall short and provide suggestions on new metrics that will help your firm become more successful.