Billable Hour Goals: What Ratio of Time Should Be Spent on Clients?

Daniel McCue

Dec 23, 2024, 7:57 AM

Our team is discussing revising our billable hour goals for 2025.

Could you share what your targets are for billable hours for your individual contributors (or subject matter experts) and for supervisors or managers? TIA

Forwarded thread from another channel:

Joshua Squires

Dec 23, 2024, 8:00 AM

Most agencies I've worked in use the 80-20 rule for ICs. 80% of hours towards client deliverables. 20% towards learning, upskilling, etc.

For managers/supervisors, it depends on things like the cost gap between them and ICs, how many ICs you have, agency expectations for them to teach/train ICs and/or contribute to internal projects. 80-20 could work, but often I've seen it range from 70-30 to 60-40.

Daniel McCue

Dec 23, 2024, 8:54 AM

Josh, this squares with my experience and what I’ve advised my team to target.

My agency head is considering 1,800-hour target (86%) which seems unrealistic and may create some perverse incentives.

We charge a blended rate.

Wanted to check in with this group and take the temperature. Thanks!

Josh

Dec 23, 2024, 2:08 PM

here's some reasons to push back against 1800 limit from a similar industry

Noah

Dec 25, 2024, 8:40 AM

We have a 1410 hour target for all our employees. And we do this because we want our employees to love their jobs and do great work. I love it.

This is 47 weeks x 30 billable hours / week.

Nico Brooks

Dec 27, 2024, 3:03 PM

I really like what Josh shared. Burnout and resulting employee turnover may be the most important contributing factor for quality of service delivered to clients. It is certainly in the top 3. As a client, I would much rather get 32 hours from a happy, long term employee than "35 hours" from a disgruntled, short term employee.

We average around 70% (28 hours), but we also do profit-sharing and the profit-sharing is a lot better when we are close to 80% - the great game of business ????

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