Nail Communications, a Providence, R.I.-based shop that counts New Balance and Stonyfield Farm as clients, decided this summer to take the radical step of doing away with time sheets. The independent shop joins Anomaly, which boldly made this move when it opened its doors a dozen years ago, as well as Nashville, Tenn.-based Bohan Advertising. Next year, Alaska-based Spawn Ideas plans to do so as well.
While time sheets have been used forever to track client work, they are considered a major time suck. Agency managers have tried everything—from incentivizing employees with beer fridges that spring open only after time sheets are turned in to embedded software like that of KBS, which is supposed to simplify the process. And yet time sheets often are still either turned in late or are incomplete.
For small shops, the benefits of fewer employees and a smaller client pool make it easier to manage work flow, which in turn gives these agencies the bandwidth to run their business without time sheets. The benefit in doing so is that value will be placed on the work, not the time it took to put the work together. "There is a great freedom and a feeling that the effort is more about the right solution versus the best solution given the time we have," noted Spawn CEO Karen King.
Another benefit for some shops is that eliminating the burden of filling out time sheets can lead to an increase in productivity because "if you're paid by the hour, you have an incentive to go slowly," explained Nail Communications' managing partner Jeremy Crisp. For some shops it even leads to greater profits. The first year after Bohan went time sheet-free, CEO Shari Day said the agency had its most profitable year to date.
Most agencies, however, continue to hold on to time sheets because they believe they're essential to conducting client business.
"When you have more clients and various services, you're going to want to be able to track those services in a little more detail, and the only way we can do that on the cost side is by tracking time," argued KBS CFO Chris Mozolewski. "It's more factual, and it supports the overall business model."
While the practice seems to work well for smaller shops, there also are some downsides. Some clients aren't as keen to operate so freely. In fact, Day said the agency has had to walk away from a new business pitch on more than one occasion because of it.
"I can certainly see how an agency would love to tell a recruit, not only do we have free breakfast and Ping-Pong tables, but we don't have to do time sheets like those big agencies. That's a very seductive message," said Stuart Sproule, president, Landor North America. "But I think it's a recipe for disaster. I don't see how it's sustainable from a business standpoint."
This is clearly the case for the major players, and there are even holdouts at larger indie shops. "There's too much insight to gain from tracking time to not track time," explained Riana Bocchino, The Martin Agency's senior project manager. "In our industry, we launch, measure, then optimize our work. Why wouldn't we do the same with our most valuable assets?"
This story first appeared in the September 26, 2016 issue of Adweek magazine.