Why timesheets hurt more than they help

Calling timesheets “toxic” is probably a bit much, but we do believe they are absurd. For professionals, the concept of tracking time completely misses the point. We are creative — ideas do not follow a linear path so how can tracking hours describe anything of value.

First and foremost, our clients come to us to solve problems, not to rationalize every fraction of an hour that we labor away at a set of tasks. However, before we can fully refute timesheets (and the ghastly “billable hour”), we need to know how this disease began. Let’s go on a journey of discovery, shall we?

The History of Timesheets

Our story begins in the late nineteenth century where two theories were born. Hold on tight because this could get boring for a short bit, but we promise it’s worth it.

The first was The Labor Theory of Value which states the value of an output is the amount of labor that went into creating it. It says nothing of supply or demand. Stated another way, it implies that all products have an innate value because labor was necessary to create them. In order to poor cold water all over this one quickly, I’ll jump to the part where this was birthed by Karl Marx and became the basis for socialism - a massive social experiment that failed big time.

The second theory was Scientific Management which seeks to manage labor productivity. This is where accounting for every second is prized, with the intent to maximize efficiency by removing judgement and ambiguity. In essence, it is most useful in highly repetitive work (factories). Again, creativity is highly resistant to measurement on an hourly scale so this is not a good fit for professional services.

However, in 1919, a law firm instituted timesheets as a form of cost accounting. It was not intended for pricing yet that came over time as the misguided practice of “selling time” caught fire. This is amazing given the Labor Theory of Value had been violently debunked by this time and yet most Americans didn’t know it was so closely tied to socialism, which would have been an immediate deal-breaker for the average Joe.

So, why did timesheets and the billable hour catch on like wildfire? That’s not entirely clear, yet we believe it happened due to being “easy”, a cop-out. If one only has to come up with a “rate”, a business can quickly be off and running. Essentially, you don’t have to talk with clients to learn what they value, you’re (presumably) paid for every hour you work so risk is reduced for the professional (while added for the client), and, over time, it’s became what everyone else was doing so the herd mentality won the day (or more like “century”).

Some of the Biggest Failings

Now that we better understand how the timesheet and its evil sidekick, the billable hour, came to be, why should you resent them? Below are some of the most egregious reasons.

  1. Completely Subjective - professionals essentially bring their own clipboard and stopwatch. No one is able to check the accuracy of what was recorded. Unfortunately, this can also introduce unethical behavior over time and we’re sure everyone has a few go-to stories about this scenario.

  2. Perverse Incentives - professionals want to maximize the number of hours billed while clients want to minimize them. This misalignment takes the focus away from delivering something of value and places it in the wrong arena.

  3. Value Agnostic - if an incredible idea (worth $$$ millions) is hatched in 15 minutes, is it worth less than one that took 80 hours? As professionals grow in experience and expertise, they are often “punished” for producing results too quickly. Many will askew the clever and revolutionary for the mediocre just to collect more fees.

  4. Political Pressure - while it is not typically shared explicitly, professionals can feel pressured to under or over report hours to meet the expectations of management. These are the unwritten ground rules that can turn the best of environments toxic.

  5. Highly Inaccurate - many professionals record their time at some point in the future and as humans we’re generally terrible at remembering what we did in the past. Do you remember what you had for breakfast on Monday? Do you remember when you finished?

  6. Unintended Culture - real culture is the unspoken rules followed during the daily grind not some contrived mission statement. It is observed and organic - for better or worse. Answer this question, what happens when employees see their world through the binary lens of a billable hour versus a non-billable hour? In our experience, the important things that produce a sustainable business and future value for clients and employees are perpetually cast aside.

  7. Lagging Indicator - many firms insist that timesheets help them manage yet what does the data really say? It’s not reliable nor is it something that adds value for clients. When a problem is found, it’s almost always too late to course correct.

  8. Wastefully Inefficient - a ton of time is spent managing, reviewing, and entering time that would be better spent speaking with clients to learn what else the firm could be doing to add real value. Imagine getting 10-20% of your time back to focus on adding current and future value for the business; what would you do?

  9. Undue Anxiety - clients have no idea what the overall price will be when said and done due to inadvertently focusing a set of inputs (hours). To add insult to injury, all too often, the scoping and value decisions do not happen so neither party truly knows what is to be achieved, meaning success is difficult, if not impossible, to determine.

Some Further Reading

A revolution is brewing all over the world and timesheets are the tyrant. Here are some other thought pieces decrying the horrors of timesheets as well.