Agency Metrics – Employees

By April 18, 2019Management

Successful agencies are built and shaped by the people that work there and to manage effectively you need a set of employee metrics in your agency.

Agency Employee Metrics and Effective Management

With all the moving parts that comprise an agency, it requires effective management and effective management requires measurement. This series will uncover and explain the central metrics for your agency that will help you manage more effectively. In helping my clients to achieve extraordinary results they learn how to harness the power of measurement to move their agencies from chaos to control and achieve higher levels of efficiency.

This is the third video on agency metrics, each one dealing with one of the six agency measurement domains. If you have not seen the preceding videos you can view them at cremabusiness.com.au/blog. Look out for the next video in the series.

Teams deliver outcomes

As professional service businesses, an agencies outcomes are achieved through its team. The leaders of highly successful agencies have necessarily achieved high levels of leadership mastery, particularly in relation to teamwork. These are obviously crucial qualities when it comes to scaling.

Whilst the adage ‘what is not measured cannot be managed’ certainly applies, when it comes to staff there is another adage to consider ‘what’s easy to measure isn’t necessarily what’s right to measure’.  Certain agency employee metrics, particularly those related to staff engagement, are much more difficult to obtain than most other business metrics as they cannot be reliably obtained by a simple direct measurement or inspection. Some of these are highly specialised and sophisticated and usually need the help of HR specialists. In this video I’m going to focus on the most important and most practical agency employee metrics you can use without such help. In addition we want to keep these to the minimum number practical otherwise it just becomes too hard!

I’m going to tackle agency employee metrics in two sections:

  • individual metrics
  • team or organisational metrics.

Agency Employee Metrics: Individual Metrics

  1. The easiest to obtain are the individual performance metrics as these can be measured directly. The first is productivity and that is a measure of how much value is produced per unit time. The way you measure this will vary according to the nature of the role. If we take someone working in a project environment say, where the work is clearly defined this is straightforward.
  2. Quality of work can only be measured against the established standards and then it becomes an easy measurement.
  3. Employee absence beyond leave entitlements is always a cause for concern. It can have a negative impact on team morale particularly in project driven environments where deadlines are always a factor.
  4. Achievement of goals or objectives, requires that these be defined ahead of time. Once this is done this measurement can be easily obtained. These metrics give you most of the information you need at a high level. The beauty about measuring these is that you establish a rational basis for things like pay increases and promotions. A simple set of metrics like this ensures that the value that individuals bring to your firm is objectively measured.

agency employee metrics

Staff Engagement

Staff engagement is highly correlated with profitability and growth and so it is a very important area although very difficult to measure objectively and not agency employee metrics per se. This is usually the realm of HR specialists who will usually use staff surveys to generate a valid result. Unless you have a decent size organisation, such an exercise is unlikely to be considered a worthwhile undertaking.

But there are some alternatives that are quite practical.

  1. Structured one-on-ones with team members: Along with obtaining specific data points these interactions can provide valuable informal input to management who sometimes can be quite unaware of below the surface issues.
  2. Pulse surveys and/or net promoter score surveys: These are short regular surveys that you administer internally to get a measure of the pulse and vibe in your office.
  3. Formal performance reviews:Although these have limited value as far as metrics are concerned, they are a valuable tool for exploring issues and opportunities with individuals if handled well. These should be conducted even if your agency employs only one person.
  4. Exit interviews: If handled correctly these will give feedback that is quite difficult to obtain in other circumstances.

These cannot be considered as formal agency employee metrics  in the same vein as others discussed, but that is part of the challenge of managing people. Nevertheless, these techniques remain staples within the fabric of a business that seeks a win-win outcome for the business and its employees.

Agency Employee Metrics: Team/Organisational

Within the scope of agency employee metrics, when it comes to team and organisational metrics there are many possible things you could measure. Some of these amount to business metrics and are outside the scope of this video. What we need is a set of metrics that from a team and organisational standpoint that tell us where we stand. At the end of the day you’re in a business and it’s a commercial enterprise that has it as one of its core objectives to make the best return it can for its shareholders. So that comes down to your team performance. There may well be other objectives in other domains but that would vary from agency to agency. In keeping with the principle of keeping metrics to a minimum, I recommend the following list of four metrics.

  1. Without involving third parties, getting a reading of overall employee satisfaction and happiness is very important. The team represents your capacity to generate income and if something is amiss action will be required. The bigger your agency, the harder it becomes to gauge employee satisfaction on a personal basis and so formal metrics are required.
  2. Staff turnover is a canary in the coal mine whilst there will always be some level of churn, this is something you need to be measuring on an ongoing basis, despite using employee satisfaction surveys.
  3. Team performance wise, we should concern ourselves with efficiency which is simply the ratio of actual billed hours to total billable hours. Closely allied to efficiency is productivity.
  4. The attributable gross profit per chargeable head – and a chargeable head is someone who is billing their time – this is a metric that relates primarily to your business plan and industry benchmarks and it ignores the contribution made by third-party providers. It is important because if not managed it could result in shareholder return issues and a loss of competitiveness. Please note that there are some agency models where this metric is not applicable.

Your team is your major asset and resource in an agency and so  agency employee metrics are vitally important. Your business’s outcomes are very closely tied to how you understand and manage your team and these metrics are your readout of the state of that team. Because they are harder and require more effort to acquire than many other metrics, There is a tendency for them to diminish in importance in the face of the broad range of management imperatives. If you look at highly successful agencies this is an area they have had to learn how to do well in, and so should you!

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