Employee Billable Time

[waytsh]

Of course this is going to vary from firm to firm but I am curious what is considered to be an acceptable amount of unbillable time to have per week for an hourly employee in a consulting firm?

 

[JedClampett]

It depends on your tasks and level. If you're involved in business development, more non-billable time is acceptable and sometimes expected. Also, you need to separate out your earned vacation vs. other overhead (training, development of company standards, seminars, etc.) charges. And any overtime complicates things.
I've been at places where any overhead hours beyond vacation charges were looked at unfavorably. For my level where I am now (Senior Project Manager, limited BD activities) I am supposed to be about 92% billable. So I could charge 3 to 4 hours and meet my billable goals. But it's better if I charge 100% of my 40 hours to billable projects.

 

[waytsh]

Yes, you are right I should have given more detail. In particular I am interested in a low level drafting/detailing positions since this is the position of my only employee. I want to make sure my expectations are reasonable. Also, to clarify this would be excluding vacation, holiday, etc. which I have already accounted for.

Thanks.

 

[casseopeia]

It is unrealistic to exclude vacation, holidays and sick time. Who do you think pays for those hours? Your employer. When your value to the company is assessed, it will include non-chargible benefits and overhead. When I had my own company, I considered 80% billable to be very good for lower level, employees. No one ever got much over 92% billable and that's assuming every bit of their time in the office was charged to a client and they took no sick or personal time.

"Gorgeous hair is the best revenge." Ivana Trump

 

[JedClampett]

I'm not saying to exclude those hours. They need to be accounted for in the multipliers. And since they are, it's easier for our company to measure billing goals vs the remainder of the yearly hours (approximately 1900 hours). We have people, mostly lower level or CAD that have 96% to 98% billing goals.
And by the way, it's the company's job to keep you billable. This is especially true for drafting/detailing positions. If you're not abusing sick time, they should provide you work that can be billed to.

 

[GTstartup]

I think you are missing the point that HE is the employer and is talking about HIS employee's billable time,

 

[Ron]

If the person is fully supervised and does not have to secure his/her own work, then 90 to 95% is not unreasonable. If they are partially supervised or they are expected to generate work, then somewhere between 75% and 90% is appropriate. If the person is paid hourly, then make the billability requirement high. If the person is salaried, set the productivity scale high.

Factoring vacations, time off, etc. are for the purposes of establishing the billing rate, not the billability. All such "downtime" must be considered when setting your rates, as well as equipment overhead, insurance, etc.

 

[cvg]

never heard of a drafter doing any marketing to obtain work, however it is quite common for drafters and admin staff to help with proposals and thus will have non-billable time. Otherwise, not counting vacations, holidays and sick time and any other required safety training, staff meetings etc, billable time for a drafter should be nearly 100%

 

[Lion06]

This is an interesting thread. Are all of these %'s based on a 40 hr week?is this looked at in a weekly, monthly, or yearly basis? How do you handle it when the employee is working on both hourly jobs and iced fee jobs (I assume fixed fee jobs don't have billable hours, but I'm not high enough to know for sure)?

 

[JedClampett]

There are two ways to calculate billable hour goals. One is to subtract holidays and earned vacation from the total of billable hours in a year (2088) and base your goals on that. If that's the case, it's possible to be 100% billable.
The second way is to base your goals on the 2088 hour year. If you do that, it's not possible to be 100% billable. About 92% is as high as you can expect.
As far as lump sum jobs, they're included as billable hours. After all, it's not the employee's choice what he works on. Plus it just makes all the accounting (job and company) more straight forward.

 

[cvg]

by the way, only 2080 hours per year assuming 40 hour weeks and 52 weeks per year. adjustments include all leave with pay including sick, vacation and holidays. Also subtract off leave without pay. Other time is charged either to overhead including marketing, training, general admin or to a billable project account.

 

[AnotherEllis]

[q]
by the way, only 2080 hours per year assuming 40 hour weeks and 52 weeks per year.
[/q]



He was doing a calc based on Leap Year!

http://www.ellisconsultingengineers.com

 

[cvg]

to answer the original question, the acceptable amount of unbillable time per week - is whatever your boss thinks is acceptable...

 

[NCDesign]

waytsh

If you have the work for them to do, their billable time should approach 100%. Any substantial deviation from that should be due to lack of work or important support tasks.

An employee at that level is dependent on you to provide them their tasks and workload. I would expect that any other non-billable time would be for completion of tasks you have assigned them that are of a non-billable nature like preparing proposals, implementing CAD standards, creating a detail library, fixing a computer, etc. These are all tasks that you are assigning so you should have a feel for how they affect their overall billable percentage.

For someone at this level seminars and training is minimal. Even if you give someone 5 days for training/seminars their billable percentage would still be greater than 98% (assuming 2-weeks vacation and 7 paid holidays).

As a side note I try to keep several non-billable but productivity enhancing tasks/projects on the back burner that I can have my people work on when the work load gets light or they are stuck waiting on me for some other reason.

 

[Ron]

NCDesign....

For someone at this level seminars and training is minimal. Even if you give someone 5 days for training/seminars their billable percentage would still be greater than 98% (assuming 2-weeks vacation and 7 paid holidays).

I don't think so...works out to only 91.5% average billability, even if they are 100% billable for all the time other than what you have noted.

It's tough to keep someone in a professional capacity 100% billable.

 

[NCDesign]

Ron,
He indicated that he was already taking into account vacation and holidays into the billing rate.

40*52 = 2080 hrs
2-Weeks Vacation - 80 hrs
7 Paid Holidays - 56 hrs
1944 hrs available to bill in the year
5 days training - 40 hours
1-(40/1944) = 97.9%

I did muck up the phrasing though, it should read about 98% not greater than.

 

[glass99]

There are inevitably gaps between projects and other "quiet times". If you are accounting for them honestly, it will add up to probably 2-3 weeks/year for an average engineer/drafter. My experience is that people are loath to put non-productive time on their timesheets, so finish up billing an old project if they have nothing to do.

Design offices are not assembly lines.

 

[berkshire]

If you also figure in toilet breaks, Coffee breaks, trips to the water cooler, consultations with peers etc..
If you get 7 hours of production for 8 hours attendance you will be doing well.
B.E.

 

[AnotherEllis]

Even less with smokers. And don't forget Facebook, Angry Birds, and myriad other "production killers."

http://www.ellisconsultingengineers.com

 

[HuckleberryFinn]

Don't forget slow computers and plotter errors.