How agencies can improve operational efficiency with skills-based staffing, forecasting, and automation

How Can an Agency Improve Its Operational Efficiency

High-growth professional service firms face a productivity imperative, with top performers achieving 95% more revenue per employee than the median. This blueprint details the three non-negotiable pillars: talent, operations, and technology that close this gap and drive exceptional outcomes.

What does operational efficiency really mean for an agency?

In a consulting, digital-oriented, or professional-services agency, operational efficiency is far more than simply “doing things faster” or “cutting costs.” For your business, it means three intertwined things: having the right people working on the right assignments; using time and tools with precision; and maintaining full visibility into both current performance and future demand. When these align, the result is consistent delivery, healthy margins, and a stable, motivated team.

1. The cost of mis­aligned talent and projects

When an agency assigns consultants without matching their skill sets to project requirements, or overlooks imbalances in workload, the consequences ripple through the business,

• Utilisation falls and bench time rises. Without strong skill-matching and forecasting, projects slip or require more rework, ultimately affecting profit margins. A report from McKinsey & Company highlights that top-performing firms (those in the 75th percentile for revenue per employee) deliver 95% more revenue per employee than the median, underscoring the importance of effective resource allocation and talent deployment.

• Burnout, disengagement, and churn increase. If consultants are repeatedly assigned to ill-fitting roles or are overloaded due to poor planning, their satisfaction and productivity drop. That creates a cycle of attrition and destabilising restart costs.

• Strategic blindness sets in. Without real-time insight into who is available, what skills they have, and what upcoming demand looks like, the agency becomes reactive rather than proactive. A Deloitte survey found that nearly half of organisations still focus only on financial outcomes rather than the drivers (skills, attrition, productivity) behind those numbers, reducing the quality of their forecasts and limiting decision-making agility.

2. What efficiency actually looks like in practice

For you as a decision maker, the practical indicators of operational efficiency are:

• High utilisation rates (where skilled people are productively billed, not sitting idle)

• Low bench time (people waiting for work) and balanced workloads (avoiding under- or over-assignment)

• Clear skills inventories tied to demand forecasts, so staffing decisions are driven by data, not gut feel

• Time tracking and cost visibility that distinguish billable hours from non-billable, giving clarity on delivery efficiency

• One source of truth for resources, projects, and financials, so decisions are timely and well-informed

• Forward-looking, proactive, and clear reporting for leadership, board, and shareholders

This means your teams aren’t simply busy, they’re optimally busy, doing work that matches their strengths and your strategic goals. It also means you can plan ahead instead of scrambling when a new project suddenly appears or an unexpected leave arises.

3. Why it matters specifically for agency environments

Agencies live and die by margin, by delivery quality, and by the satisfaction of both clients and consultants. Unlike many businesses, you often deal with project-based work, varying scopes, tight deadlines, and skill-varying resources. In that context:

• Small inefficiencies compound quickly; a mismatch by just one week or one person can knock the billable hours for a project and erode margin. Also, this might have spillover effects on other projects, having an even bigger negative impact on profitability at the portfolio level.

• Consultant retention is critical; if people feel under-utilised or mis-allocated, it affects morale and leads to turnover, which is not just destabilising but deeply detrimental to the agency’s long-term success.

• Competition is high, clients expect agility, quality, and predictable delivery. If you’re still working off spreadsheets or manual processes, you risk falling behind firms that are more operationally mature. The McKinsey insight mentioned earlier confirms that a small number of “standout” firms drive the majority of productivity gains in their markets.

Why is skills-based staffing the foundation of operational efficiency?

In agency operations, assigning people based purely on availability is a reactive approach. It may get work started, but it rarely delivers optimal results. Skills-based staffing means aligning each consultant’s unique capabilities with the project's needs, rather than simply filling seats. When you build your agency around skills alignment, you improve delivery quality, reduce rework risk, and maximise each consultant's billable contribution.

One of the biggest operational efficiency challenges is what I’ll call the “availability trap.” Teams assign staff because they’re free, not because they’re the best person for the job. This often results in delivery mismatches, scope creep, lower quality, and increased cost. 

Expert Commentary - Jason Koehn, Partner, SpringForce Consulting

 “Most firms don’t lose efficiency because people are lazy; they lose it because they believe their top talent can stretch endlessly. That overconfidence, paired with weak resourcing discipline, is where delivery pain starts. Efficiency isn’t about doing more with less; it’s about deploying the right people on the right scope. Skills-based staffing backed by smart forecasting and automation gives leaders the visibility to stop firefighting and start optimizing profitably.”

There are findings that show when you move away from staffing based just on “who’s free” and toward “who has the right skills now and for the future,” you shift from reactive firefighting to proactive planning. One of them states that 63% of business leaders report work increasingly crosses functional boundaries and that organisations shifting to skills-based staffing are 52% more likely to deploy talent effectively. Further, Deloitte found that 63% of companies say focusing on skills rather than fixed job descriptions offers greater agility in deploying people to the work that matters. This is a critical foundation of operational efficiency.

How agencies can build a skills-based staffing capability

1. Create a skills inventory: catalog all consultants’ technical, functional, and soft skills, review their current assignments, unassigned capacity, and skill gaps.

2. Map skills to demand: review upcoming projects, identify required skill-sets, compare against the inventory, and flag mismatches early.

3. Use data for assignments: rather than assigning by availability alone, score suitability based on skills, project requirements, prior experience, and consultant preferences.

4. Track performance and feedback: link staffing decisions to delivery outcomes and update your skills database accordingly. This creates a feedback loop for continuous improvement.

5. Support development: when skill gaps are identified, invest in upskilling or reskilling to keep your pool dynamic and future-ready.

By making these steps systematic, you reduce the risk of misallocation, improve project outcomes, and build a workforce that’s responsive to change rather than just reactive.

How can forecasting capacity and balancing workloads improve efficiency?

Operational efficiency doesn’t just depend on who is working; it depends on when and how much they’re working. Forecasting capacity helps agencies plan ahead, ensuring consultants are neither underutilized nor overwhelmed. When you can see what’s coming, you can allocate resources strategically, reduce bottlenecks, and maintain profitability without compromising well-being.

Understanding capacity forecasting

Capacity forecasting is the process of predicting future workload and resource demand based on current project data, sales pipeline, and historical performance. For a COO, it’s a forward-looking lens that prevents both last-minute staffing chaos and idle benches.

Based on our experience and discussions with clients across diverse industries, high-performing organizations are 2.5 times more likely to use data-driven forecasting in operational decision-making than their peers, which is indeed a potential approach. These organizations consistently outperform others in revenue growth and delivery predictability because they plan capacity based on real-time data rather than intuition.

Similarly, McKinsey & Company highlights that companies using predictive analytics for capacity and workforce planning experience up to nearly 20% higher productivity and 30% lower turnover than those relying on traditional methods. (6)

The importance of balanced workloads

When workloads are unbalanced, either too heavy or too light, both efficiency and morale take a hit. Overworked consultants produce lower-quality outcomes, while underutilized ones add to overhead without delivering returns.

We have also been notified that organizations maintaining balanced workloads across teams saw a 27% improvement in employee satisfaction and a 19% increase in project delivery speed.

Balanced workloads are not just a people-management goal; they are a profitability lever. They ensure teams operate within optimal utilization levels (typically between 75%–85%), maintaining consistent project delivery without burnout.

How agencies can forecast and balance effectively

1. Leverage historical time-tracking data: identify utilization patterns and recurring bottlenecks.

2. Set clear utilization thresholds: define your ideal percentage range based on team size, project types, and seasonality.

3. Incorporate scenario planning: run “what-if” forecasts to anticipate project overlaps, hiring needs, or potential capacity shortages.

4. Integrate your CRM and resource planning tools, so upcoming deals automatically influence staffing forecasts.

5. Review weekly: short, data-driven review cycles help you rebalance before problems compound.
   
   

Agencies that embed forecasting and balancing into daily operations see measurable benefits, reduced downtime, improved team satisfaction, and stronger delivery margins. As McKinsey notes, continuous capacity management transforms operations from “reactive resource filling” to predictive performance management.

How does time tracking and automation help in driving efficiency?

For a professional services firm, time is the core product. Accurate time tracking moves beyond simply measuring attendance; it is the essential mechanism for distinguishing billable (value-generating) work from non-billable (overhead) work. This granular visibility is non-negotiable for calculating true project profitability and establishing realistic future budgets.

As a foundational metric in professional services, time tracking is a core component of operational health. A Deloitte study on the consulting billable hours model highlights that utilisation, the percentage of billable work hours out of total available hours, is the key metric used in performance evaluation and productivity tracking across major professional services firms (5). Consistent, accurate input is what makes this metric a reliable tool for decision-making.

How Automation Has Become The Engine of Administrative Savings

While accurate time tracking provides the data, automation provides the efficiency gains. It removes the friction associated with manual administrative tasks, which are often the largest consumers of valuable consultant and manager time.

Automation, particularly in areas like staffing, time-sheet approval, and invoicing, reduces manual errors, accelerates cycle times, and frees up consultants to focus on billable work. According to Gartner, organizations that leverage hyperautomation technologies in combination with redesigned processes are predicted to reduce operational costs by 30% (7).

The operational impact of automation includes:

• Reduced Administrative Overhead: Routine, repetitive tasks such as data entry, compliance checks, and the generation of simple reports are handled instantly and accurately by systems, allowing project managers and consultants to reclaim time for client work.

• Improved Data Accuracy: Automation enforces consistent rules, eliminating errors often found in manual data transfer between spreadsheets or siloed tools.

• Faster Cash Conversion: Automated time-approval and invoicing processes accelerate the billing cycle, thereby improving the agency’s cash flow.

In short, automation doesn't just save time; it improves the quality and speed of your data, leading to better utilisation, higher margins, and happier, less-frustrated consultants.

What happens when agencies use one platform for resource management?

Operational efficiency is inherently linked to data visibility and the seamless flow of information. The opposite of efficiency is fragmentation, where disparate tools, CRM, accounting software, time tracking apps, and separate spreadsheets for resource management create friction, data silos, and a massive drain on managerial time.

Using integrated systems profoundly improves strategic decision-making and profitability. Forbes notes that technology integration should empower leaders by enhancing visibility, accountability, and decision-making, allowing them to focus on growth instead of administrative tasks. By bringing all elements of the resource management lifecycle onto one platform, agencies ensure that every decision is informed by accurate, real-time data, accelerating decision velocity and directly impacting the bottom line.

What can COOs do right now to build operational efficiency?

Operational efficiency is not a single project with an end date; it is a continuous journey of iterative improvement. For COOs and operations heads focused on driving sustainable margin and quality of delivery, immediate action should focus on establishing foundational processes and consolidating data.

Here is a five-step, practical checklist for immediate action:

1. Audit Current Resource and Staffing Processes:

• Action: Document the end-to-end process for staffing a new project, from the sales pipeline signal to consultant assignment.

• Focus: Identify where spreadsheets are used, where manual data transfer occurs, and where "availability-based" staffing decisions override skill-matching. This reveals immediate friction points.

• Action: Create a centralised, structured database of every consultant’s verifiable skills, proficiencies, and project experience.

• Focus: Ensure this is a live, dynamic inventory that is updated after every project and linked to performance feedback. This is the foundation for skill-based staffing.

• Action: Formally define the target utilisation rate for each consultant level or department (e.g., 80% for delivery, 60% for management).

• Focus: Establish clear thresholds for bench time (too low) and over-assignment (too high), and ensure managers have immediate visibility into these metrics for their teams.

• Action: Begin the process of replacing fragmented spreadsheets and siloed tools with a unified resource management platform.

• Focus: Prioritise a system that integrates capacity forecasting, skills-based staffing, and time tracking. This move is the most powerful lever for breaking down data silos and gaining real-time operational control.

• Action: Institutionalise a quarterly operational review dedicated to efficiency KPIs (utilisation, project margin, time to staff).

• Focus: Use data from the new platform to identify and address bottlenecks. Efficiency is lost not when systems fail, but when they are not reviewed and optimised regularly.

By implementing this checklist, you shift your agency’s operational model from reactive management to proactive performance management, creating a measurable, sustainable competitive advantage in the professional services landscape.

Frequently Asked Questions (FAQs)

What utilisation rate should an agency aim for?

The ideal utilisation rate varies by agency type, consultant seniority, and role, but a common target for billable consulting staff is between 75% and 85%. Rates below this often indicate excessive bench time or inefficient processes (non-billable work eating into time), while rates consistently above 90% risk burnout, high turnover, and reduced quality of delivery. The key is to find the optimal balance that ensures consultants are productive without being perpetually overloaded, a goal directly supported by strong capacity forecasting and balanced workload strategies.

How much time can automation save in operations?

Automation provides significant administrative time savings. According to Gartner, implementing hyperautomation technologies can lead to an operational cost reduction of up to 30% (7). In practical terms, this means hours spent each week by project managers and administrators on repetitive tasks like manual time-sheet chasing, data entry, and report generation can be eliminated. This time is then redirected toward higher-value activities, such as strategic planning, client relationship building, and quality assurance.

When is the right time to move to a unified resource management platform?

The right time is the moment data fragmentation begins to inhibit your strategic decision-making. If your managers are spending hours collating data from spreadsheets, CRM, and accounting software just to staff a project or predict capacity, you are already operating inefficiently. Our experience says, relying on data in silos prevents scalable efficiencies. Moving to an all-in-one platform becomes necessary when you realise your current tools are limiting your ability to forecast accurately, staff strategically, and ensure profitability across your project portfolio.

How can agencies prevent burnout while improving utilisation?

Burnout is prevented by ensuring that the work is balanced, meaningful, and aligned with skills. Improving utilisation is about making time productive, not just maximizing hours. Skills-based staffing ensures consultants are doing work that matches their expertise, which increases engagement and reduces the effort required for delivery. Furthermore, using capacity forecasting ensures workloads are balanced (never exceeding safe utilisation thresholds), which directly improves employee satisfaction and retention while simultaneously boosting project delivery speed.

Source Appendix:
1. McKinsey & Company: Will it be economic stagnation or the advent of productivity-driven abundance?
2. Deloitte: Effective planning, budgeting & forecasting 
3. McKinsey & Company: The power of one: How standout firms grow national productivity
4. Deloitte Brazil: Navigating the end of jobs. Skills replace jobs as the focal point for matching workers with work
5. Deloitte Brazil: Skills frameworks fuel skills-based organizations
6. McKinsey & Company: The critical role of strategic workforce planning in the age of AI
7. Gartner Forecasts Worldwide Hyperautomation-Enabling Software Market to Reach Nearly $600 Billion
8. Forbes: 10 Ways Tech Integration Can Boost Business Outcomes

Expert bio:
Jason Koehn - Partner, SpringForce Consulting

Jason Koehn is an insurance digital strategy and transformation leader with over 20 years of experience driving enterprise modernization across global insurance markets. He specializes in bridging business strategy with emerging technology, using data-driven insights to guide strategic direction, improve profitability, and elevate customer value.

Jason has held senior leadership roles at SpringForce Consulting, Acrisure, Synpulse, Keller Williams, and IBM leading complex transformation programs, scaling cross-functional teams, and delivering measurable growth. Known for inclusive leadership, learning agility, and customer-centric innovation, he helps insurers modernize systems, optimize operations, and navigate digital change with clarity and impact.