When you build an agency, the one thing that you need to do is you need to hire the right people to help in its growth. The only way to grow from being a start-up to a multi-millionaire company is through staffing and resourcing.
Your staff is one of the most important resources in the agency, and without their help, your organization will not be able to grow. They are the ones who will either build or destroy the reputation and image of your agency.
The control of hiring the staff remains in the hands of the agency; hence, this decision should be made correctly. When you hire someone, you need to focus on many different factors. Hiring the wrong person will create a very bad effect on the performance of the company.
Along with this, you need to stay on top of the latest changes in your field and hire people based on that change. You cannot hire someone with age-old ideas and plan to take your company forward. The person you hire should be aware of the latest trends in the competitive market and work accordingly.
Staffing is a very important management function that includes hiring, training, managing, and tracking the right people for your agency. Molding the hired people into a capable team of workers who can meet the needs of your agency is extremely important.
In this module, you will learn about the fundamentals of staffing and resourcing. You will also know how to track, manage, and hire people for your company. In addition to this, you will be made aware of the different organizational structures that you can follow for your agency.
The knowledge from this module will not only help you in hiring and managing suitable people but also let you follow a structured plan for the growth of your agency.
Job Titles and Roles Required In an Agency
Agency hierarchy is when your staff members are divided into different groups based on their responsibilities. For any standard agency, there are three main kinds of hierarchies. These hierarchies can have different names based on the kind of agency it is.
The first level of the agency consists of the executives who are your CEOs and COOs. The next level is the management level, which is the senior managers, senior strategists, etc. Underneath them is the executive level, which consists of people who carry out different tasks related to your agency.
The people at the executive level look after the complete functions of the organization. Here, they take care of the company policies, the strategies, alliances, and other managerial tasks that can only be handled by the top management.
The management level consists of team seniors, senior strategists, and such who plan out the tasks that would be carried out by the execution level staff. Mid-management works as a medium of communication between the top management and the low-management.
The last level is the execution level, which consists of SEO strategists, content writers, and other staff, which carries out the tasks given by the mid-management.
Execution Level of an Agency
As already mentioned, the people at the execution level execute the tasks needed by the top and middle management. There are quite a few roles in this level of management, and together they form the most important part of an agency.
The staff that you hire for this role would be in charge of delivering needed services as per different contracts. In an SEO agency, this role is generally given to the SEO strategist. When you are initially starting your agency, all you need from your strategies are in-depth SEO knowledge.
As your agency keeps growing, you also need to keep up with the changes. Here you will have to hire someone who not only has SEO knowledge but is also specialized in other key areas such as content marketing, tactical SEO, link building, or any other SEO area.
Account Managers and Project Managers
The job of AM/PM would be to handle the clients and carry out the necessary communications. They will be managing tasks as well as tending to the needs of the clients. Whether it is scheduling tasks, sending deliverables, taking care of client requests, or even sending emails, the AM/PM has to do it all.
You need someone who can multitask and is quite responsible. People working for this role need to be quick on their feet and should also have good communication skills. They should be able to pass on the needs of the clients to the designated people and get the work done on time.
Another very important role is sales, which help to bring in new clients into the agency. The growth of your business is measured using different parameters, one of them being the number of clients that are associated with you.
The work of the sales department is to bring new contracts through different techniques. They will also focus on networking proposals, pipeline development, outreach, and other necessary tasks that could bring in new prospects to the agency.
Without a strong sales team, you cannot grow your client base.
One of the most overlooked departments is the marketing department, which is a very necessary part of an agency. Marketing can help you build the brand, demand generation, and extend your reach.
You can initially start this yourself and then hire someone dedicatedly for this position when your agency expands. Marketing involves different activities such as website marketing, social media marketing, content marketing, advertisement marketing, and many others.
Marketing and sales revolve around each other. Both of these departments work in sync to contribute to the development of your business. Hence, with the proper marketing techniques, you will be able to generate more sales.
Another very important department of any agency is the finance department. Any transaction that occurs in your agency should be recorded. Without a proper financial record, you will not be able to keep track of the money that is going out and coming in.
The work of the finance department is to manage the daily transactions made by the agency. Whether it was budgeting, forecasting, bookkeeping, or any other financial activity, the department would handle everything.
When the agency is small, the records can be kept by you. However, you do have to hire more and more people as the agency keeps growing.
SEO Agency Organization Chart
The first level of the agency is the executive level or top management. Generally, in an SEO agency, you can have a CEO, CFO, and COO. CEO is the Chief Executive Officer, CFO is the Chief Financial Officer, and COO is the Chief Operating Officer. The functions of each of these positions are different, and not all agencies have three of these positions together.
The next level consists of the Director of SEO, Director of Links, and the Director of Content. As is evident from the names, the roles and responsibilities of these positions are specific to different departments.
Under the director, the level is the Senior SEO Strategist, Senior Content Strategies, and the Senior Links Strategist. Working under these for their specific departments are the SEO strategist, content strategist, and links strategist. The last level of the hierarchy consists of analysts from different departments.
Depending on the kind of SEO agency you want to build, there will be changes in the position names and the roles of the staff. Here I have provided you with a general idea of what an SEO agency looks like and which are the positions that you need to focus on for its smooth operation and growth.
When it comes to my agency, I add one more layer to my organization, which is the support level. Here I bring in offshore staff for the required departments. The senior management level below the director level is also cut out from my structure.
How to Build the Organization Structure?
When you start an organization, you cannot hire people to handle different departments. The thing about a start-up is that you need to handle everything on your own. Starting from service delivery to finance, you need to know all the departments.
If you are starting the agency with a few other people, then that is all the help you will get. In the beginning, your agency will not have the required funds to hire different people suitable for the job.
As your agency keeps expanding, you need to establish different departments. It would be hard for you to manage the work alone. You will need people for service execution, management, sales, marketing, finance, and other responsibilities.
That is when the salary factor comes into view. Here you can establish a monthly payment structure for your staff instead of an annual package. What happens with the monthly package is that the management becomes easier, and you will be able to change people if you are not satisfied with your staff performance.
When to Start Hiring?
If you are unsure of when to start hiring, then the right answer to this would be the moment when you feel overwhelmed with the workload. You do not have to hire people until and unless the workload increases, and you are unable to take care of it alone.
Remember, hiring someone means you are investing in your company. If you can make that kind of investment, then you can start the hiring process.
What Position to Hire For First?
There is no hard and fast rule as to which position you need to fill first. The choice for this would be different for every agency. The hiring process depends on your requirement. Simply, you should hire someone for the job that you hate doing yourself.
To be on the safe side, you can hire people for the managerial position since they take over most of the tasks that are needed to run an agency. If you are not comfortable doing SEO related work, then you can hire an analyst.
When you divide the responsibilities between different people, then you can focus on more important tasks that need your attention specifically.
What Should You Pay Initially?
The payment for the first hire should be on the lower side but should also be able to justify the experience and knowledge level of the person. You will not get good quality staff if you try to keep a very low payment structure.
The payment would differ for every organization and would solely depend on your capacity. Keep in mind that you may have to train people to fit into the role that you want them to play in your agency.
Where Should You Hire From – Local, Offshore, or Outsource?
You can choose different talents in different positions. Do not offshore talent for a full role and just give them specific tasks that you need to be finished within a deadline. If you need people for communication-related tasks, then you should hire local people.
Any communication position should be filled with people who know the local language and are based in your office location. Do not attempt to hire offshore talent for communications. You can outsource people for bookkeeping and finance if you wish.
What To Look For In The People You Hire?
This depends on the person that you are hiring and the kind of organizational culture that you want to build. While some people like to keep the environment strictly work-related, some people want their employees to have a fun and engaging work experience.
Make sure that the person that you hire has similar personality traits as you. This will help in better communication between you and your staff. Also, keep into account the experience and knowledge of the people before you hire them.
Where Can You Find The Right People?
(Source : Google Images)
Technology has broadened the channels from where you can hire people. There are many social media channels, such as LinkedIn, and job hiring sites such as Upwork and other networking events. You will find hires everywhere since people are always looking for jobs.
Hourly Model for Billing
Along with the hiring process, there is another aspect that you need to focus on, which is the pricing model. The pricing model that you choose for your agency will create a huge impact. You will be able to make out your incomes and expenditures in the form of profits, salary, and such.
It can be really hard to find the pricing model which suits your agency’s needs. You can follow monthly as well as hourly billing. Though monthly billing is what most agencies follow, I vouch for the hourly model.
The best thing about the hourly model is you can make out what you are paying your staff per hour. This will help you determine what you should be billing. SEO agencies should go for tracking and billing hourly due to the nature of their services.
You can manage your resources better if you pay people for the time that they are working. Fixing a flat monthly rate may not work for you since it becomes hard to determine whether the work done is worth the money you are paying.
When you pay hourly, you get full utilization of the rate and also gain internal profits. Another major thing is that paying hourly means you get paid for all the work that you do.
For many SEO and advertising agencies getting a flat rate from clients can mean extra services that the client thinks is included in the package. Charging hourly for any project gives you the chance to fulfill the needs of the client and also get paid for whatever work that you do.
Why Should You Opt For Hourly Billing?
There are various benefits of opting for hourly billing. First and foremost, this method of billing creates a clear relationship with the prospect. When you approach a prospect with a project and decide on the payment, they will very well know what they are paying for.
In an hourly model, the prospect is paying for your time since both performance, and value-based payment becomes very subjective. It becomes very hard for the prospect to assess your payments when you opt for these subjective parameters.
The model is very simple and straightforward and eradicates any payment related to confusion between you and the client. All you need to do is agree on a time based on the kind of project that you are doing.
Secondly, you can quantify your work and keep track of the results. Through hourly payment, you will be able to ensure that you get faster results. You can calculate the hours that you can put in a month and charge according to that.
Before you start any project, make sure that you clear out the expectations with your prospect. Form a project plan and ensure that you follow through with the plan. This creates more value for you as compared to monthly billing.
Scaling Your Agency
You can effectively scale your agency through hourly billing. This helps you make a calculated structure for your hiring process, expenditure, margins, etc. There are certain key performance indicators that you can calculate using hourly billing.
Revenue per Seat
There may be numerous staff in your organization, and keeping track of each staff’s revenue generation can be a tiresome task. When you follow the hourly pricing method, this becomes very easy. You can see how much revenue each of your staff is generating every hour.
With this, it becomes easy to calculate the performance of the staff. You can differentiate the ones that are actually working as opposed to the ones whose performances are not up to the mark. This helps you understand the worth of the employee for the agency.
The utilization rate is one of the most important KPI that every agency should focus on. You can calculate this rate by hours billed divided by the hours that are available for billing. This means that you can find how much each person is available for work.
It helps you to make many important management decisions. You can determine whether you need more people in your organization. You must ensure whether your employees are overworked or not.
If they are over-utilized, then you need to bring in new people to help them out. In the same way, if your employees are underutilized, then you need to ensure that they are used to the extent of their full potential.
This KPI is what we derive from calculating the utilization rate and for when you need to point out the overworked employees. For them, you need to find new employees who can share the workload. However, you do need to calculate the number of people that you need to hire to keep the workload balanced.
How to Calculate Hourly Rate?
You can find this using a tool, but here is just an overview of what parameters you need to take into account to calculate your hourly rate. Firstly, you have to gather all your expenses, which include your rent, tools used, and any other monthly payments.
You will then record the total billable hours. For this, you will have to consider your vacation days, sick days, weekends, holidays, and daily hours. Generally, daily working hours are considered to be 6 per day. Some people may also go for a maximum of 8 hours, depending on their work structure.
Another expense, such as the tax rates and your margin, is also taken into account for this calculation. You can include your profit in this margin. Once done, you calculate the different parameters and find out your hourly rate.
If your billable rate is not up to your expectation, then you can make adjustments to it. You can make these changes based on your work experience and the performance that you have benchmarked for yourself. The rate that you ask for should be worth the work that you do.
Forecasting Utilization and Profitability
The main aim of creating billing data is to make financial forecasting based on different parameters. You can start with the number of clients you have per month, followed by the monthly retainer fee each month (of the total clients), monthly payroll, and expenses.
Using these, you calculate the gross profit. For example, your retainer revenue for the month of August is $30,000. Your monthly payroll is $33,693, and other expenses are $2998. Here your gross profit will be negative, -$6691 to be exact. This means that you have suffered a loss of the mentioned amount in the month of August.
You can calculate the gross margin, which in this case is -22%. You can change the number of clients, total revenue, and expenses to change the gross profit and gross margin. Record the billable hours needed by the project and the hourly rate.
Including details about your monthly expenses along with the monthly payroll of all your staff will keep all the data under one roof. Calculate the utilization rates using this data so that you can know if your team members are working in the right manner.
Building a Forecasting Template
Here you will learn how to set up the template to keep track of the above-mentioned data. There are three main metrics that you need to focus on – utilization rate, billable hourly rate, and profitability. You will be calculating these metrics using the data.
Get started by creating four tabs, which are Clients, Roles, Team, and Expenses.
In the ‘Clients’ tab, insert the name of your clients, their project duration (put start month and end the month on different rows), and the retainer revenue per month.
The team roles, job title, role type, and salaries are mentioned in the ‘Roles’ tab. Add the different members of your team in the ‘Teams’ tab. You can also include any future hires along with their start dates since they will also be a part of the forecast later on.
Include the date of the different expenses that you would be making per month. For expenses that are one-time, the end date will be noted one month from the start date. Create a ‘Project Plan’ tab where you will be setting up plans or each new prospect.
These are the data you need to calculate the utilization rate. You can set up a different color for them to help you track the differences. For example, set orange for low, green for good, and red for over. If you see that a particular employee has red for longer periods, then this is the time to hire someone new.
How to Track Hours?
When you work on a project, you need to track the hours that each employee is working for. This helps you understand who is working more than they should and which employee is not putting in their complete efforts.
(Source : https://clockify.me)
Here, I have mentioned a tool Clockify which helps to track the hours of any project. You do not have to use this particular software; you can also use Google Sheets if you wish. The main aim is to track the hours of each employee for their own benefit. You can discuss the results in any weekly meeting to assess the performance of your employees.
Rebuild Your Project Plans Using Hours
You can build a sheet using which you can take into account each task and the hours that it would require to finish those tasks. This is quite helpful when you are building a project plan.
Not only will you be able to determine the hourly expenses, but you will also have a record of the tasks that you need to complete. You can use this data to calculate the utilization rate of the different employees and track their performance.
Create records for different project plans and track the expenses and time for each employee who is a part of the project. This will include people belonging to all levels of management. This data is extremely crucial to ensure that the project goes smoothly.
How to Build Sales Projections with Hourly Data?
The importance of tracking hourly data will be felt when you need to build sales projections. Through the proper assessment of this data, you can understand the time it will take to complete a particular project. Not only that, you can pick up specific tasks that may be needed for some other project.
You can effectively use this data for future proposals, which include the same tasks. Use this as a pitch for your next client, showing them a sample of your strategy. The client will be impressed by your planning, and this can help you get the project very easily.
The communication in such a case would be much clearer. The client will already have an idea of what you would be provided along with the rate for the tasks. You will not have to explain to them your services separately.
What Do You Send The Clients?
One thing to remember while sending your clients the proposal using hourly data is that you do not have to send them the hours billable. What you can do in this case is to calculate the monthly retainer for the proposal. This means you will tell the client your monthly fee, but this data would be built on the hourly data.
Every month you can bill for the hours that you have spent working or can also give them an average amount. This is how a retainer project works. You will have to keep track of your hours, which is internal data. You can calculate the retainer fee based on the internal data, which the client does not have to know.
Sending the clients the total number of hours you will be working for is not necessary. The only time you will send them is when they ask for the data. However, sometimes when you bill the exact hours, the amount can be more than what you actually bill the client.