Agency guide
For an agency, capacity planning is one of the key factors in smooth project delivery and profitability. And even more importantly, it also plays a pivotal role in preventing employee burnout and creating a healthy agency culture.
Peaks and troughs are an inevitable part of agency life. But if you want your agency to be profitable, balanced workloads and fully utilised teams are a must.
In this guide to agency capacity planning, we’ll share best practices to help you get your resourcing just right.
Agency capacity planning is the process of determining how much capacity you need in your agency to meet your current and projected work demand effectively.
Essentially, how many people and what skillsets you need to deliver client projects and retainers without causing overwhelm.
These are the six top challenges we see repeatedly in agencies. If you can get a handle on these, you’re putting yourself in a good position to deliver high-quality client work on time and in budget.
These are many and varied, but some of the benefits you could expect to see include:
The first thing to get to grips with is how much time you currently have available for client work.
The simplest formula would appear to be:
Capacity = Working hours x number of people
Unfortunately, agencies aren’t as simple as that!
Not every minute or even every hour of the working day will be chargeable. Tea breaks, bathroom breaks, meetings, briefings, lunch... all start to add up. Plus, there will be times when team members are working on internal work, new business and pitches. This will fluctuate and vary across different teams and individuals.
So we need to make our simple formula a little more sophisticated to see the true picture.
What is ‘utilisation’ rate? The number of hours they actually have to spend on chargeable work.
You can’t realistically apply the same utilisation rate to everyone, as workload and project type will vary massively across team members. Finding each individual’s utilisation rate will give you a strong platform for your agency capacity planning.
To get the most accurate calculation, we recommend this four-step process:
Example of utilisation calculation:
Based on this example, a designer working 37.5 hours per week with 30 hours of capacity on chargeable client work has an 80% utilisation rate.
Learn how ArmstrongB2B agency improved utilisation rates with Synergist
Once you have a realistic idea of each team member’s utilisation rate, you can calculate their average capacity per month:
Resource's capacity = Individual's workable hours x Individual's utilisation rate
When calculating workable hours, remember to take annual leave and bank holidays into account. For example:
Number of actual working days per year = 52 x 5 (= working days per year) - 8 public holidays – 20 days holiday.
Multiply by 7.5 to get your number of working hours per year.
Then, divide this by 12 for the average hours per month or 52 for the average hours per week.
Once you have your individual rates, you can add the hours together for skillsets. For example, if you have four copywriters, each with an average of 100 hours per month, you have 400 hours in total. That means you can sell this many hours, with a rate of £75ph, that’s £30,000 worth of copywriting available.
Work coming into agencies is never likely to be an exact science. But there are some things you can do which can really help with your capacity planning.
First, look at what projects you already have in and establish how much time is still needed for these.
Then look at what’s coming up in your pipeline. When is it scheduled to start and finish, who needs to work on it and for how long?
Finally, look to your new business. This is the harder one as there will be an element of guesswork. But you can make it educated guesswork. Look back over your previous months/years and see what new business has come in and if there’s been any kind of pattern which may continue. Is it a particular type of project or for a specific skillset?
From here, you can look at current and estimated capacity and make sure you have the right resources in place.
There are three main types of capacity strategy which you can use to help meet your capacity demands:
Depending on your agency’s growth plans and projects, you can use a combination of these strategies. Match capacity planning tends to be the most effective as it matches available capacity with demand. But you do need highly accurate estimating and forecasting for it to be effective. Tools like Synergist allow you to track current capacity and future resource requirements across different teams, skillsets and individuals.
Here are the four steps to take in your agency capacity planning:
Synergist software offers smart solutions to automate agency capacity management, helping you effectively forecast, manage, and report on agency resourcing.
Once you’ve performed the calculations outlined earlier, you’ll have each team member’s target chargeable hours which you can add, along with their total (contracted) hours, to their staff record in Synergist. (Remember, not all your staff will have chargeable hours, so just leave this blank for them.)
Synergist’s scheduling dashboard lets you see how much time has been estimated on live jobs, booked on chargeable and non-chargeable work/holidays, and how much time is still remaining to be allocated. This means you can see, at a glance, how you’re performing against your targets and make sure the hours you’ve sold are in line with your capacity.
Plus, you can view by department, team or individual to see what hours you have left to sell for which skillset, identify any resourcing issues and see if there’s any increased demand for specific skills – which in turn can inform your hiring decisions.
The scheduling dashboard also shows you any ‘opportunities’ in your pipeline, enabling to assess the impact of landing new work. Here, you can view ‘estimated’ to see how these would affect your resources, or ‘weighted’ to view the most profitable opportunities.
“Synergist agency management software is the cornerstone of the business. It has given us the opportunity to look three, six, nine months down the line in terms of where we need people, where projects are dropping off and things are starting up. It helps us in every way possible.”
Darryl Kennedy, Director at Spike
Synergist smart resource scheduling software makes it easy to ensure everybody is busy on billable work - but not at overcapacity - and projects are delivered within budget.
You can quickly see resource availability and make tentative or confirmed bookings based on budgets. Plus, you can add holidays, absences, training and special events such as days out, giving you visibility when an individual is unavailable.
The ‘loading’ view helps you make sure you’re not overbooking resources.
Synergist smart Calendar Booking shows where you have immediate capacity or resource-loading issues
"With Synergist’s shared schedule, we can see when people are working or not, so we can see how that impacts capacity, revenue and costs prior to implementation.”
Synergist also gives you an instant view of how well you're utilising and recovering your team's time. The performance dashboard shows utilisation across chargeable and non-chargeable time by team, resource type or individual. You can see their chargeable hours and value vs utilisation targets.
If you do find any utilisation issues, you can drill-down into their detailed timesheets to see where people are spending time and the cost impact.
Synergist Performance Dashboard shows your team's utilisation vs targets
"We can now drill into the data using Synergist. For example, if a department's underutilised, is it because we're not bringing in the right type of work? Or we're not quoting or billing enough for the work they're doing? Understanding this is the key that can unlock the success of the business."
Kelly Walsh, Head of Operations, Gilroy
Book a demo to see how Synergist can help you plan capacity with confidence - book a demo today!
Agency capacity planning will look different for every agency. But here are some best-practice tips which will apply across the board:
Good capacity planning can help you see the bigger picture and plan your resourcing. Your data can inform your decisions on whether (and when) to bring in freelance support, long-term contractors, or even hire new recruits.
It might feel like a lot of work, but if you put in the time upfront it will pay dividends. It helps you avoid overstaffing or understaffing, manage client expectations, and deliver quality work on time and within scope.
Agency capacity planning is the process of determining how much capacity you need in your agency to meet your current and projected work demand effectively.
While agency capacity planning is about your current workload, capacity forecasting focuses on predicting future needs based on expected client demand or growth objectives.
Agency capacity planning focuses on determining the amount of capacity needed to deliver your client projects or retainers. Meanwhile, agency resource planning is a broader concept, identifying and allocating all resources you need to operate your business effectively. This means looking at resourcing internal work too, such as finance, HR, new business and client management. It’s also worth noting that ‘resource planning’ is often used in relation to specific projects, but this is ‘project resource planning’ as opposed to ‘agency resource planning.’
The clue here is in the name. Agency capacity planning means working out in advance what you need. Agency capacity management is the day-to-day process of assessing current capacity, optimising your resource allocation and making sure your utilisation targets are met.
Resource management is the continuous assignment of people and other resources to projects, taking into account availabilities, skills, qualities and costs of the elements and how they map to the projects.
Utilisation rate is the percentage of someone’s working hours that are made up of billable work. They show how much time staff are spending on chargeable client work versus work that isn’t directly bringing in any income.