Do non-billable people really need to track their time?

Written by: Karl Sakas

An agency owner asked me: “Should my non-billable people track their time?”

My answer: Ideally—but it’s often philosophical rather than a clear-cut choice.

How so? Requiring 100% self-tracking by 100% of the team gives you the best data… but you may be able to replicate similar results—with higher team-wide morale—via your operations lead.

To be clear, 100% of your billable people should be tracking 100% of their billable time… ideally 100% of their total time, ideally daily.

But what about time tracking for non-billable people? Let’s look at factors to help you decide at your agency.

Why track time at your agency?

Time-tracking lets you track agency productivity. Since your team’s time is your “inventory,” you want to know where the time is going—especially the billable time.

(Looking for a new time tracking tool? See my article on time-tracking software for agencies.)

What about non-billable people?

Some roles are inherently non-billable—like sales, operations, and internal marketing.

They may never do billable work—but it’s still helpful to know how they’re spending their time. Why? Because you want them focused on high-value non-billable activities.

Measuring ROI on their time

Without time-tracking data, you won’t know if a non-billable person’s results are commensurate to the time they’re investing.

Without data, it’s harder to troubleshoot when things aren’t going smoothly. For instance, are you missing lead-gen targets because the marketing isn’t working… or because the marketer isn’t working?

Having the time tracking data helps you—or the employee’s direct manager—understand the ROI. Might someone lie about their time as they appear to track 100%? Yes—but you’re likely seeing other problems with them, too.

In cases where non-billable team members sometimes do billable work (e.g., an office manager who occasionally does billable QA testing for a client project), a “don’t worry about tracking, usually” policy means there’ll likely be time leakage at some point… or several points.

Automation vs. manual calculations

Having data from 100% of the team also makes it easier to run reports. Non-billable employees still impact your agency-wide billable ratio, which is a proxy for overall productivity.

Your operations lead can manually “add-back” each non-billable person’s “time worked” (each time they run the report, or manually each week or month) but this is time-consuming and tends to create measurement errors.

Eventually, it’ll “flip”—your agency is big enough that it hurts you not to have accurate current information from all team members, billable or not.

Deciding about non-billable tracking at your agency

Based on the pros and cons I’ve listed, you’ll need to decide whether “100% tracking” is worth it.

If everyone tracks 100%, you’ll have better data quality and, perhaps, billable people not resenting the non-billable people. But when non-billable people track 100%, it can also increase complication and add enforcement hassles.

In the middle?

Sales is outcome-oriented—but when someone isn’t producing the results you expect, you’ll want backwards-looking data to help you (and them) troubleshoot it. Yet if the data doesn’t exist… it’s too late to reconstruct it accurately.

There could be something in the middle—perhaps sales and internal marketing track time, and operations doesn’t. Or perhaps sales tracks weekly, while everyone else does daily.

Alternative: Collect a sample

Don’t want to do full-scale tracking for non-billable people? If someone’s struggling to produce, you can ask them to track a week or two to see where their time is going. Or you can jump to tracking results metrics only, but that’s impractical for some non-billable roles.

Owner = role model

What about you, as the owner? Can you skip time-tracking yourself?

Be careful—you’re a role model to your team. If your employees know they have to track but you don’t, you may create some otherwise avoidable morale problems.

What’s the problem? You’re acting in a way that your team may see as entitled. And “entitled boss” isn’t a great motivator to get employees to think like owners.

Question: How do you handle time tracking by non-billable people at your agency?

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