How to boost billable utilization and attract the right talent
The top five percent of professional services organizations generate more revenue from billable hours and attract the best talent by investing in their people and technology, notes Alan Clark, PSO Sales Director UKI and Nordics at Unit4.
New research reveals that 2019 was “a year of smooth sailing” for the professional services industry, with improvement in most major metrics as part of “unprecedented” growth in the market. In addition to a review of 291 The 2020 Professional Services Maturity Benchmark report (PSMB), by Service Performance Insight (SPI), also looks at predictions and trends for 2020.
The 2019 report — which compares service execution metrics between The Best (the top five percent) and The Rest — finds that the top performers are putting their people first by investing more in benefits, training and pay, as well as embracing technology.
“Talent is a primary focus and hot topic for all service firms,” says SPI. “In an increasingly competitive talent market, top-performing firms are becoming laser-focused on their employment brand. Organizations are embracing technology to help reinvent the workplace with knowledge-sharing, team-building, transparency and collaboration at the core of their continuous learning cultures.”
Higher billable utilization
According to SPI, average billable utilization across the industry increased from 69.7 to 71.7 percent. The Best, meanwhile, achieved billable utilization of 85.4 percent compared with 70.9 percent for The Rest — a 20 percent difference. The Best also experience a shorter time lag for new hires to become productive (47.4 versus 60.2 for The Rest), as well as lower voluntary and involuntary attrition.
“Each top firm emphasized the importance of culture,” says the report. “Culture goes way beyond establishing a mission statement — it must be unique and inspiring to attract the type of consultants and clients the firm can best serve.”
“Billable utilization targets of the best firms average 85% or higher compared to 70% for average firms.”
Part of the secret to the success of these top performers, says the study, is a reliance on professional services automation (PSA) software, which means they can build and reinforce project delivery standards, which result in precision execution and high levels of quality, productivity and profitability.
“They credit their PSA software with improving resource, project management, time and expense capture and billing, leading to higher levels of billable utilization and on- time project completion.”
Learn from The Best and compare with The Rest
SPI’s report, now in its 13th year, is an objective, fact-based strategic planning and management framework for performance improvement. It is used by more than 35,000 service and project-oriented organizations to chart a course to service excellence.