9 Arguments Against Timesheets and for Modern Compensation Models

I’m no Gary Vee, but a recent LinkedIn post about my aversion to timesheets garnered over half a million impressions and sparked a surprisingly spicy debate about client-agency finances.

I was curious about the volume of pushback from folks defending the hours-based billing systems that I believe may result in the death of our industry.

The moment our business says yes to comparing the value of work based on rates instead of outputs, clients and agencies risk industrywide burnout, talent drainage, poorer relationships and even poorer work product.

So for the sake of our business, let’s tackle some of the common arguments around these outdated models and a possible better way forward.

Timesheets are the only way to measure value.

Time and value are not the same.

What if one campaign got cracked quickly because the team had a “lightning bolt” moment? What if another campaign requires double the time because the team is slow to find inspiration? In the end, both clients got great ideas; should one pay less and the other pay more?

This also assumes creativity is a punch-clock scenario. What about time spent thinking on the subway, watching Netflix or having beers with friends?

Value isn’t about time; it’s about great quality in the work relative to overall price. No one walks into a restaurant and asks for the hourly rates of a line cook on a $21 bowl of pasta. They only worry about whether the Bolognese tastes delicious.

How do you manage pricing? Timesheets help us cost things out.

A lot of factors should go into agency pricing, including services, timing and deliverables. Also difficulty. Is this client familiar or new? A simple brief or a complicated one? Streamlined or multistakeholder? Finally, what are your competitors charging? Pricing is as much an art as it is a science.

How do you manage scope creep or change? What about benchmarking?

It’s easier to manage scope change, up or down, on deliverables than hours. You either gave it to a client or didn’t. It’s more quantitative than burn. And in my experience, clients prefer quantitative.

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