This is Rachel Howe’s second appearance on AccountingWEB. The FD of Lab, a digital agency, spoke to us previously about the four day work week. Howe’s agency recently implemented the policy with great success.
“Revenue forecasts for the trial period look good,” she said. “There’s no impact on revenue as far as I can see.” Her job is about more than measuring the viability of the four day week, of course. Lab is a busy agency and Howe keeps tab on numerous KPIs.
One of the key metrics is what Howe calls ‘free days’. She keeps track of the number incurred on a weekly basis. “A free day excludes holiday, sickness and training courses, and is calculated based on looking at all chargeable resources and whether they have been tasked with actual paid chargeable work for that week,” Howe said.
“There are numerous reasons as to why we may incur free days: nurturing new clients or opening up new accounts, sales support, project overruns and learning on the job are prime examples of these.”
Free days are monitored and communicated at a weekly leadership meeting to ensure Lab balances chargeable and non-chargeable work and the number is compared against a pre-set target based on the maximum number of free days Lab can give away while still hitting revenue targets with the current chargeable resources they have onboard.
“This is backed up with a high level summary by type of free day and resource, so if it’s off-track against target then we can start to dig into the reasons why. The aim of this is to then drive a subsequent change in behaviour across the business.
“For example, if a resource has booked non-chargeable time to a project, then why is this? Is it a change in scope? If so we could make a change request to the client to ensure this time is chargeable. Monitoring this metric on a weekly basis helps ensure we do not go wildly off-track by the time we hit the end of each month.
“The digital industry is a competitive space, so being able to spend time nurturing new clients and opportunities is becoming ever more key. This is a great use of free days and an agency should see good returns for this, so it’s important that free days are focused in the correct business areas and are not taken up by other internal inefficiencies.”