‘Billable hours’ culture at services firms criticised

The culture of optimising ‘billable hours’ to secure career progression at professional services firms has led to junior employees becoming overworked, an academic study has argued.

Charging clients by the hour is common practice in the accountancy, consultancy and legal industries. But pressure to maximise the number of hours billed to clients has intensified during the recession.

The use of this type of ‘financialization’ as an employee control strategy was explored by André Spicer of Warwick Business School and Johan Alvehus from Lund University in Sweden.

They undertook a two-year case study of a Big Four accountancy firm, where employees had to record and allocate their time in six-minute segments throughout the working day.

These timesheets facilitated “a process of self-monitoring and self-management”, found the study, and perpetuated the notion that employees’ worth and career progression were linked to the billable hours “commodity”.

“This contrasts with more traditional images of professionals as being more concerned with tasks and knowledge than time,” said the report.

The academics found that some staff felt compelled to conduct non-billable tasks – such as skills development and administration – in their own time, increasing the number of hours that they spent at work.

Junior employees, particularly graduates with no other workplace experience, were conforming to this long hours’ culture and putting their work-life balance and health and well-being at risk, the academics warned.

An obsession with billable hours also meant that firms risked losing sight of long-term strategy objectives and their professional ethos, the professors claimed.

“If you look at the history of how professional services firms were run, there used to be a strong professional ethos, it was all about collegiality and partnership,” said Spicer. “But as the big firms have become more like corporations, billable hours have become more important.”

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A variation on this in IT consultancy firms is to require that a certain percentage, as well as number, of hours be billable. Someone doing self development can often find that they exceed their number of hours target but fall short on the percentage as the time spent on development has increased the total number of hours and driven down the percentage billable. The result of this is that not only do staff tend to work longer hours but they also clock out when doing non-billable work. This has worrying health and safety implications as staff may be working many more hours than their timesheet or clocking records show.<br/><br/>An added perversity I've seen is that when the sales team have cut prices to get a contract the IT workers delivering the service are restricted in how many hours they can bill. Often the restricted level is less than half what a task should take, I have seen one case where the sales person, to get a quoted cost down to what they beliefed the customer would pay, simply cut all the time estimates in half. The IT worker can then find that their billable hours suddenly get converted to non-billable to fit the quote.

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