Nail your capacity planning; run a successful agency

Image for Rebecca Cash By Rebecca Cash

Capacity planning is one of the cornerstones of effective agency management. Essentially, it means making sure you have the right amount of people – and the right people – to manage your expected workload. Here’s more about why it’s so important… and how to get it right.

A clear understanding of what work you have in, what projects you expect to land imminently, and how your pipeline is looking long term is a must to accurately manage your capacity planning. Stumbling from day to day piling more and more work on already-busy people will lead to poorly executed projects and unhappy clients. Equally, paying staff to sit around with nothing to do is clearly unprofitable.

Capacity planning will give you detailed insights into your headcount, and help you decide upfront if you need freelance support. It also creates a stable, calm and supportive environment for your teams, as they’ll realise you’re looking after their wellbeing and helping to keep their workloads on an even keel.

From a commercial perspective, you can create accurate, achievable revenue plans and carry out proactive new business planning to fill any gaps.

The cost of not considering capacity

Conversely, if you try to avoid capacity planning, you’ll soon see inefficiencies spreading like wildfire through your agency, with under recovery on projects and a lack of visibility on your pipeline.

Even if you consider yourself a caring and responsible employer, without constant planning and flexibility to manage ever-changing client requirements and workloads, you’ll soon end up with overworked staff and a high turnover.

Without a clear picture of your headcount needs, you could also end up over-hiring, which is costly. And booking freelancers in a panic and then realising you don’t need then can also result in unnecessary fees and strained relationships.

Good capacity planning in practice

There are two key strands to consider. These are:


This means understanding what chargeable time your teams have available on a daily, weekly, monthly and yearly basis. Staff aren’t chargeable 100% of their working hours, as there will be time spent on things like training, pitches, internal projects, meetings and new business.

Talk to each of your team members to get a full picture of their role and responsibilities. It’s always a good idea to involve them in setting their chargeable targets, as this gives them a good understanding of what they are accountable for.

Look back over the past year, if you have timesheet data, to see how and where time has been spent. If you don’t yet have this data, start to put it in place: get your teams to track their times for a few months, so you can base their utilisation targets on real figures, rather than estimations.

Think about your strategy for the coming year. Are you planning a new business drive, for example? If this will take your teams away from chargeable work, this all needs to go into the utilisation equation.

When you have a realistic utilisation rate for each team member, you can calculate their available hours per day, week, month and year. You can also use this data to understand capacity by skillset/team.

Read more on utilisation:


It might seem obvious, but having an accurate idea of how long something will take is key. Remember, there’s a difference between an estimate and a quote. Your quote is your agreement with your client, which may include discounts or value-based work. Your estimate is your internal outlook of how long a project will take, so you know how many hours to allocate to each team member.

Avoid the reverse engineering trap. Your client might give you a budget to work to and it’s easy to try to simply fit the hours into this. But you still need to allocate the right number of hours. Giving a designer 10 hours to do a job that will take 20 will only lead to a stressed-out designer who hasn’t been able to do the job properly. And when people feel like that, it’s when they start to look elsewhere and you lose valuable talent.

Look for gaps. Good estimating allows you to see what you’ve sold compared with time available by teams, charge code or team members. If you notice any gaps, you can look for new business. Or if it looks like time has been sold where there’s no availability, you can get temporary freelance support.

Keep on monitoring. Constantly checking in will help you understand what’s required each week and month and if anything has changed.

The role of client services

Client services plays a key role in your capacity planning. They need to really get to grips with client expectations, interrogating the brief to understand exactly what it means, and translating it effectively to teams. They can also ascertain whether deadlines are set in stone for a reason or if there is any flexibility either way.

As an agency manager, you need to make sure these teams have the confidence to have sometimes-difficult conversations about budgets, briefs and timings. Managing these correctly can help to make sure that your teams are happy… which in turn will make your clients happy. Simply saying yes to everything a client asks for isn’t the way forward.

Get your capacity planning right and it can unlock doors to growth, sustainability and profitability. Basing your recruitment and staffing decisions on accurate data keeps you in control, rather than the lack of control which reactive hiring can bring. You’ll find that your selling is more focused and targeted, as you’re finding new business for the areas of your agency which need it. And you’ll have team members with a good, balanced workload rather than the chaotic, and unsustainable, feast-or-famine approach. Essentially, good capacity planning means happy people, happy clients… and happy profits.

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