Why we banned timesheets at our consultancy

To timesheet or not to timesheet – that seems to be a very common question.

While timesheeting is more common than not in the professional services, increasingly I am hearing people say that there has to be a better way, that they would love to focus more on value rather than time, but just don’t know if it’s possible, feasible, or even where to start.

So I asked someone in the know to share their story of working in a consulting practice that doesn’t use timesheets – why did that do it, and how does it work?

Today my guest poster is Darren Jurevicius, Managing Director of Resonate Consultants

Why we banned timesheets at our consultancy

In just six years Resonate Consultants has grown from humble beginnings to this year turning over $4m, featuring in the Financial Review Fast 100, growing to employing 35 professionals and working on some of the biggest engineering projects in the country.

In that time none of the team has ever filled out a formal timesheet.

In the beginning

Let’s wind the clock back. Prior to setting up Resonate, the management team had all worked at various engineering consultancies where clocking your time every day, from junior to CEO, was de rigueur.

So, here’s how it goes in consultancy land. A client comes to you and requests a fee proposal. Consultancy X, based on their charge out rates, works out the number of hours to charge based on an agreed scope of work, with a healthy profit margin also in there. When timesheets are handed in, hours are often massaged to fit within the project budget and they often don’t represent the true time that was spent by the consultants. Furthermore, timesheets may also be tweaked to balance the tension between conflicting KPI’s such as personal utilisation targets and project profitability…need I say more.

Timesheets can change behaviour…

Filling out timesheets is boring, an ineffective use of time, and is ultimately soul destroying, particularly when trying to get those KPIs looking good.

If you’re very experienced and good at what you do, you can do a task quickly and effectively, while an inexperienced person might take double or triple the time. Logically, if you’re being paid by the hour it is actually an incentive to do your job slower.

Here’s what Resonate did

Part of our vision as a business is to ‘resonate with staff and clients’, which in our thinking means to provide value to our clients with intent to develop long-term partner relationships and allow our staff to focus on what they do best. Filling out formal timesheets did not fit within our vision for Resonate, and a value based pricing model was generally the preferred approach.

Value based pricing puts more emphasis on developing our fee proposal according to the perceived or estimated value of our consulting service to the client rather than according to our time cost. This can have a significant ‘up’ side in terms of project profitability, however it also means that we can spend the time needed to provide the right outcome for our clients, even if we do not recoup all the time cost on some occasions.

The key take-away is freedom to be able to deliver value to our clients.

No timesheets also means that there are reduced administrative and management time and costs, which is cut by slashing submitting, processing, approving, correcting and transferring correct times. This also means we’re now focused on providing value the most efficient way we can rather than tracking how long something takes. We’re outcomes focused, and therefore hopefully delivering more value and better client service as a result.

But just because we’re efficient doesn’t mean we charge less fees…if our clients feel they are getting value from our service, then this is the key indicator for us.

Project specific timesheets are sometimes inevitable; however we try to invoice on a work in progress or completed milestone basis rather than time where we can.

But how do you make the change?

Here are my top 5 tips for how you make the move away from timesheets:

1.     Work on company culture

At Resonate we have highly skilled staff who are clear on the outcomes they need to achieve and what they’re being measured on – namely client feedback (more on this below), internal collaboration and financial contribution. Making sure everyone is aligned in thinking and are clear on expectations from the get-go makes it easier to switch. Furthermore, openly sharing to do lists and deadlines across the team helps build a culture of transparency and an understanding of shared work load.

2.     Coach your junior staff

With junior staff we work closely with them to help them understand how long jobs take so it becomes innate.

3.     Develop a culture of constant improvement

We have an improvement culture, so we’re all coming up with solutions on how we can work more effectively, efficiently and ultimately more profitably. This can include looking at ways to collaborate more efficiently, identifying the latest cloud based apps to improve our business administration and collaboration, or developing our own automated reporting systems and software tools to speed up our delivery.

4.     Track metrics

Just don’t use ‘time spent on projects’ as one of them! The numbers we’re tracking are aligned to our business values. For example, Net Promoter Score (NPS) is a key way we track client satisfaction – if we’re over 65 then, as the Directors, we’re satisfied we’re hitting our goals. In addition to the usual business metrics, we also look at monthly average revenue per full time equivalent consultant, proposals and project throughput, as well as proposal win rate, amongst others. Significant insight can be gained from looking at the trends in all the metrics to understand where you’ve been, where you’re at and how the future looks.

5.     Embrace tech timesavers

We use a number of tech timesavers including Xero and Podio dashboards for financial and project tracking, Slack for keeping communication channels open, and Officevibe for weekly tracking of our employee engagement. These all serve to track and measure while not wasting time.

So, as I see it, not only are we shifting our focus to spend more time on client satisfaction by reducing time spent on timesheet admin and interrogating, we’re also differentiating ourselves in the marketplace and positioning ourselves as employers of choice for upcoming talent. We’re still doing similar work to our contemporaries, we’ve just shifted our mindsets.

We see it as a win-win. Why don’t you give it a try too?

Got a question for Darren about how they make their value based pricing model work? Head on over to the post on my LinkedIn page to join the conversation.


About Darren

Headshot of Darren Jurevicius

Darren is the Managing Director of Resonate Consultants and has more than 20 years’ experience working in the consulting industry. He has managed small and large teams at various consulting firms including at a large publicly listed global company. He has an interest in organisational culture and working with people to achieve great outcomes.