If 10,000 hours of practice at something makes you an expert, I might be an expert on timesheets. OK, probably an exaggeration, but I’ve spent far more time in my career than I’d like to admit: thinking about timesheets, debating their value, reviewing and approving them, analyzing their aggregate data, and evaluating the tools behind them. Not to mention the time I’ve spent simply filling out my own timesheets.

Here’s what I’ve learned.

If your business is a services organization, where most of your employees are splitting their time across different activities (working for multiple clients, or on multiple projects, or playing multiple roles), then timesheets are, at best, a mildly OK measurement of what actually happened and where your labor costs are spent.

I’m not going to tell you to get rid of timesheets entirely – many of you can’t, because you are legally required to classify one or more of your employees as hourly/non-exempt. If you’re in this boat, you’ll need to collect timesheets from these hourly employees for payroll, tax reporting, benefits eligibility and so on.

What I’m primarily going to discuss here is the practice of collecting timesheets from salaried, exempt employees – those who are going to get paid the same amount regardless of whether they worked on one project or ten, or for 30 hours last week or 100.

Which begs the question, why does any company put their salaried employees through this tedious task?

They do it because they think the data is critically valuable to understanding how efficiently their business is operating. They think that the data shows how well someone is utilized against billable work, against which clients, and which projects (or even more granularly, which specific task). They think it’s providing them with an accurate labor cost, broken up by client, by function. They think it’s useful to inform projections of the cost of doing future business. At worst, they think it’s a way to inform whether an employee is valuable or not – whether they should get a promotion, or go on the chopping block.

Unfortunately, timesheets aren’t accurate for any of these measurements – primarily because they’re too subjective to tie to hard metrics.

Subjective? you might ask. Isn’t the number of hours I spent on a task a very objective and specific measurement?

It can be, and for a small percentage of people it is – the kind of person who diligently maintains their timesheet throughout the day will end up with a very accurate record of the time spent on each task. In my experience, about 5% of your employees might do this naturally. Slightly less accurate is to fill out your timesheet once at the end of the day; maybe 10-15% of your staff are inclined this way.

What about the rest of your salaried staff? If you have a team leader, or resource manager, actively soliciting (begging, cajoling, shaming – whatever) your staff to turn in their timesheets, you’ll be lucky to get about 50-60% of people to fill them out and turn them in once per week. If you’re waiting till the end of the week to remember how Monday went, you’re going to fill out the timesheet based largely on how you felt the week went – not on what actually happened.

Which leaves us with about 20% of your staff who Simply. Won’t. Fill them out.

So at best, 20% of your company’s timesheet data can be called “objectively accurate,” 60% can be called “subjectively informative,” and 20% is missing outright.

The most valuable takeaway from this kind of data is basically whether or not a portion of your staff appears to be overworked or underutilized. Which you should already know if you’re keeping your eyes open and your ear to the ground, doing regular, brief 1-on-1 check-ins (aka human conversations) with your team.

What are the inputs you really need to measure the success of your operation’s labor effort, if it isn’t timesheets? These are more important:

  • Employee satisfaction
  • Employee utilization
  • Turnover rate

You don’t need employees to fill out timesheets to collect this info. Instead of asking for a spreadsheet detailing 15-minute increments spent on each task, try surveying your team once per week with a few simple questions:

  • Did you enjoy your work this week?
  • Did you feel you had enough time to perform well against everything you needed to accomplish?
  • Do you feel like you’re ready to take on something new?

These kinds of questions help you quickly understand if someone is thriving, burning out, or underutilized. You can gather this information formally through an actual online survey, or you can gather it in a regular 1-on-1 meeting with your team members – just remember to make a consistent record of those conversations so that you can take action on them later!

If for some reason you’re beholden to reporting some type of hard labor cost broken down by client or project, but you’re struggling to get the data you want from timesheet submissions, try a different approach.

Rather than gathering timesheets, try designing an online survey such as:

  • Which of the following did you spend most of your time working on this week? (Client A, Client B, Client C…)
  • Which of the following did you spend some time working on? (Client A, Client B, Client C…)
  • Which did you only spend a little time on? (Client A, Client B, Client C…)

From that input, you can do a neat little calculation that assumes “most of your time” = 70% of their fixed labor cost for the week; “some time” = 25%; “a little time” = 5%. You can still derive numerical data from this on the back end, but you’ve created a more human and empathetic way of collecting it on the front end.

The beauty of maintaining these conversations with your employees is that this practice will uncover more nuances, and more valuable insights, to how your business is operating, than a spreadsheet ever will.

You’ll have a better understanding of what each team member is capable of taking on, making you better at resourcing new opportunities. You’ll see the red flags of burnout sooner, and be able to address it before it affects the work output, or worse, leave you scrambling to find a replacement hire. You’ll learn more about what it takes to actually get the work done – the skills, the expertise, and the pipeline of activities themselves – which will make you better at scoping new business, and better at positioning your offerings around your in-house skills.

Doesn’t that all sound… more valuable?


Author: Dena Gonzalez, COO, Area of Expertise

Photo Credit: Tim Gouw