When agencies are smaller than 8-12 people, they typically don’t have a full-time project manager. This means a non-PM is doing PM.
I’ve seen a couple situations recently where clients weren’t assigning resources well.
If you’re doing project management, your job is to “ship” the work profitably. Ideally, the client is happy with the result… but client happiness must come with profitability.
When you—or your PM–assign people to do work, you ideally want the cheapest competent person doing the work. Let’s dig into that.
Competence is the baseline. If someone is cheap but incompetent at the task, you’re wasting time and money.
This covers soft skills, too—don’t expect your greenest PM to save the day when it’s time to placate an angry long-time client.
Be careful when you hire a new person—don’t put them on a mission-critical project or retainer until they’ve proven they’re competent on a lower-profile assignment.
Cheap is relative—relative to experience, reputation, geography, and industry. But ultimately, you don’t want a $75/hour person to do something that an available $25/hour person could do.
Sometimes, cheap is too cheap—like the client whose entry-level web developers were $15/hour, but who took 4 hours to do what took him 20 minutes.
Cheapest + Competent
This is the sweet spot. The right choice is going to vary by project—and even by task—but this combo is ultimately the ideal person to assign to the work.
That is, they’ll get it done but they’re not overpriced for what you’re getting.
Applying This at Your Agency
Here are my tips to improve how you assign work as an agency—whether you’re a career PM or a “reluctant PM”:
- Know what each person costs. At one of my clients, one partner does PM and the other does finances. The one doing PM doesn’t always know what people cost.
- Know when it’s worth paying more for an expensive expert. At one agency, we created a special “senior” rate for someone who charged us more than what we charged our clients. We needed him for a few hours here and there—but his advice was totally worth it.
- Have a stable of freelancers. If you have only one freelance developer and you need urgent help, you’re going to pay for it. See my article on hiring freelancers.
- Be sure you’re adding enough markup. If you aren’t charging 2-3X what you’re paying them, you’re either under-charging or over-paying… or both.
- Ask people if they have skills they aren’t currently using at your agency. The more people can do, the more they can bill. Your office manager might not be writing SQL queries, but I bet they can proofread deliverables, load content, and do basic QA testing.
Question: How do you handle assigning-out work?