How data helps agencies manage resource

It’s one of the biggest challenges any marketing agency can face. No, it’s not AI. It’s managing resources: people. 

Talent is an agency’s greatest asset and its greatest cost. To keep the doors open, agency leaders must precisely balance the number of people they employ against the business’s revenue streams and cash flows. It’s a very tricky balance. 

So how do agency leaders achieve said balance? The answer, as usual, is with data. 

The realities of staffing a marketing agency

Agencies operate in a very fast, highly dynamic and extremely competitive industry. They often face fluctuating client demands, with some periods being exceptionally busy while others are slower. Agency leaders must ensure that they have the right talent levels to supply current needs while also being able to take on new work. 

Too few resources can result in missed deadlines and burnout, while too many resources can lead to unnecessary costs and chew through profit margins. Finding the right balance can mean the difference between a successful agency and a failing business. 

But, with the right tools and data-driven strategies, agencies can nail this balance. 

The KPIs for managing agency resources

You can’t run a successful agency on vibes. You need hard data to make informed decisions. For agencies, that means demand forecasting, utilization rates, financial data and talent performance data. 

Client demand forecasting

In order to plan for tomorrow, it helps to have an idea of how much demand you’ll experience. 

By analyzing historical data, agencies can forecast future workloads and anticipate periods of high or low demand. This includes recognizing seasonal trends, industry cycles, and client-specific patterns. For instance, if your agency gets slammed with project requests in Q3 for Black Friday promotions, you may want to have freelancers or temps on standby. 

Your client base may also experience regular industry cycles or be poised to exploit an emerging trend. 

Utilization rates

At a marketing agency, it’s all about time. Tracking how much time employees spend on each project can give managers a clear view of how long the work actually takes to complete. This information can also give managers the opportunity to add new projects (and new revenue) to the workflow. Additionally, leaders can quickly identify areas that may be overworked. 

We know. Agency people hate filling out timesheets. However, it’s one of the best ways to collect meaningful data that can be analyzed over time. 

Financial data

Tracking the time spent by your talent doesn’t mean much if you can’t connect it to business outcomes. That’s why it’s so important to include relevant financial data in your resource planning. 

When scaling your team up or down, you’ll want to consider billing rates, project profitability and the administrative costs associated with changes to the team. For long-term and big-budget projects, bringing on new full-time talent might make sense if the rest of your team is maxed out. Alternatively, fast-turnaround projects or those with small budgets might make more sense to bring on freelance help. 

Talent performance data

An agency often lives or dies by the performance of its talent – particularly for niche industries and projects. By monitoring the performance of your entire team, you can start to gain a view of your top performers. Over time, this can allow you to note your “A team” that can be assembled for the most important (and highest profit margin) projects and speculative work. 

You can also identify those who may need more training or experience and cycle them through top-performing teams to gain valuable experience. 

Data-driven resource strategies

Once you’ve collected all this data, it’s time to start deriving some strategies that will propel your agency forward. Here are a few of our favorite strategies for agencies. 

Predictive analytics

For client demand forecasting, predictive analytics uses your historical data to make inferences about future needs. The more data, the more accurate your forecasting will be. You can even start to model how emerging marketing trends may influence your team’s growth and your agency’s profitability. 

Flexible staffing models

Agencies need to remain nimble at all times. To achieve this, many agencies use a mix of full-time employees and a contingent workforce (e.g., freelancers). This sort of flexible model can allow a small agency to quickly scale up for a specific contract or allow a large agency to gain niche expertise. 

Real-time monitoring 

Like up-to-date data and modeling can help marketers achieve peak performance in real time, so can it apply to agencies managing their resources. It can be hard to achieve, but gaining real-time insights into your team’s performance can help you to pivot at a moment’s notice, helping to further differentiate your agency from the competition. 

Key consideration when taking a data-driven approach to talent

Data can be a powerful tool to help an agency maintain resource levels and profitability. However, there are some things you’ll need to keep in mind if you’re looking to adopt this approach. 

First, employee data can be extremely sensitive. Depending on the location you operate, you’ll need to be aware of the various laws governing the privacy of that data. 

Additionally, agency talent (even administrative functions) likes to be creative. And while data empowers creativity, you may experience some push-back. Consider adopting a change management process while you transition, allowing your team to voice frustration while they get accustomed to the new approach. 

Resource management tools

We’ve established that filling out timesheets isn’t the best part of agency life. It can feel tedious, but it’s essential for the business. But there are tools available that can automate certain processes while having features that can assist your team in multiple ways. 

Workday

Billing itself as “human capital management software,” Workday is a robust tool designed to help businesses track and manage their workforce. It can be especially beneficial to agencies that need to understand how their employees are allocating their working hours. It has many features, allowing agencies to scale up quickly. 

Asana

While Workday may be more focused on overall talent management, Asana is a bit more focused (and optimized for) project management. This can be beneficial to agencies since it will help them track the work moving through the shop and track hours against those projects. Asana is used by teams of all shapes and sizes, allowing for easy integrations and scalability. 

Jira

Designed mainly for software developers, Jira can also help digital agencies manage debugging issues, manage projects and track time spent. It’s great for teams who work on digital projects in agile methodologies. 

Monday

It’s more of a customer relationship manager than a timer tracker, but Monday can also help you track your team’s output across a project's lifecycle. The software also serves many business models, allowing agencies to customize it to suit their needs. 

Steering for profitability

At the end of the day, employing a data-driven approach to agency resource levels is a means of avoiding the worst possible outcome for any agency: being overstaffed and understaffed. Such a scenario can cause an agency to hemorrhage its hard-earned profits and lead even the calmest agency leaders to panic. 

By collecting employee data, performance data, client demand inputs and financial data, agency leaders can accurately forecast the road ahead.