80% utilization makes agencies more profitable—here’s why

Managing your agency’s resources isn’t just about assigning the right people to the right projects at the right time. It’s also about knowing not to fill every available slot on the calendar.

It might seem counterintuitive—the more your team works, the more you can bill, and the more clients you can serve. Right? But it’s not that straightforward.

Consistently overutilizing your team can be just as problematic as underutilizing them.

We spoke with Mariya Delano, CEO and Founder of Kalyna Marketing, Tyler Hakes, Strategy Director at Optimist, and Cameron Strittmatter, co-CEO of Failure Island, about the risks of overutilization. In this piece, we’ll explore why it’s a problem and why building in a creative margin for your team is essential.

A 100% utilization rate is counterproductive

If you’ve ever worked 70-80-hour weeks to deliver a rushed campaign for a client, you know how exhausting it is. The project gets done, but by the end, the team’s running on empty, the number of typos increases, and even simple tasks start to feel overwhelming.

That’s what 100% utilization does to your team, and if you’re remote and they have grit, you may not notice it. “100% utilization is a great way to 100% crush hope and pleasure in work,” says Cameron Strittmatter of Failure Island, an award-winning creative agency. “It frequently leads to a crippling catch-up mentality: ‘Oh yeah, would love to make some progress on creative project X just as soon as we’re past major client project Y.’”

“Running at your bandwidth means you’re not in touch with reality. Things go wrong. New demands come up. Tasks take longer than expected. Someone gets sick, or a problem pops up and throws everything off,” says Mariya Delano of Kalyna Marketing, a B2B marketing agency. “People need more time and space than you think.”

When your team is constantly at full capacity, they can’t easily handle last-minute client feedback, explore new ideas, or do the kind of creative thinking that leads to standout results and keeps clients coming back. Ironically, these are the very problems full utilization is meant to avoid.

It also affects retention. Employees experiencing burnout are nearly three times more likely to actively seek another job (45%) than those without burnout (16%), according to SHRM’s Employee Mental Health in 2024 Research Series. Mariya shares that her agency has lost clients, money, team members, and opportunities during periods when they operated at full capacity for too long. “We’ve lost results and successes because we didn’t protect that margin,” she says. 

That’s why you shouldn’t aim to fill every minute. Just like Google famously encourages employees to use 20% of their time on passion projects and leave some time open for non-client work. It’ll allow your team to think better, solve problems creatively, and avoid burnout.

To illustrate this, here’s a hypothetical example based on patterns we’ve seen across creative agencies. It compares two projects, one run with the team at full capacity and the other with a 20% buffer built in.

Project B looks like it used less of the team’s time, but in reality, it actually delivered more value and set up longer-term revenue through better client experience and higher quality of work.

How to make the most of the creative margin

Your team needs to know that this time isn’t wasted or something to feel guilty about. It’s not unproductive; it’s necessary. It’s an opportunity to read something interesting, write, explore an idea, or even just take a walk. So, you need to make it a company-wide culture and develop certain internal rituals.

For instance, one agency we spoke to runs an “Exploration Week” every few months. During that time, they do less client work and instead focus on activities that refill their creative energy, like reading, visiting museums, writing creative pieces, etc. They also have a ‘no-meetings Wednesdays’ culture to allow for deep, uninterrupted work. The result? Some of their best work has come from ideas that started during those periods. The work is so good that clients regularly refer them, bringing in even more business for the agency.

At her agency, Mariya describes something just as intentional: “I defend what I call ‘time to think.’ It’s whatever it needs to be. It’s time to think on a question, a problem, an idea, a task.”

For Cameron, they make time for creative projects. “We engage a 'no bad drafts' practice for our most out-there projects, encouraging the whole team to whip up something bananas—and then we circle up and perform staged readings of ‘em to get the concept and the conversations going. It’s a lot of fun.”

Tyler Hakes of Optimist, a full-service content marketing agency, also shares how his team uses this kind of margin: happy hours, team games, in-person retreats, and more. These are moments that give them the chance to step back from the day-to-day and reconnect with each other or with their creative energy.

What works will vary from team to team. There’s no perfect formula. But the key is making sure your team knows they’re not just allowed to use this time, they’re encouraged to. Because when people have space to recharge, they show up with more focus, better ideas, and renewed energy.

In addition to space, people also need a sense of ownership in their work to stay motivated and produce their best ideas. When team members understand how their contributions support the overarching goal, they're more likely to take initiative and do even better work.

“If you treat creative work like a cog in a process—a simple input and output system—people will treat the work as such. If you give them a seat at the table to see how their work fits into a bigger picture and the goals that they're trying to achieve, they'll take ownership and invest in doing their best work,” says Tyler.

An 80% utilization rate can be more profitable 

Creative margin isn’t just about protecting your team; it’s a smart business move.

When people have the time and space to do their best work, they deliver better results. That means happier clients, stronger relationships, and a higher chance of repeat business—all of which drive profitability.

It also helps reduce costly mistakes, missed deadlines, and team turnover. Hiring and training new people is expensive. Retaining great talent by giving them a sustainable workload is far more cost-effective.

And perhaps most importantly, when your team isn’t operating at full capacity all the time, you’re in a better position to say yes to new opportunities, whether it’s a last-minute pitch or a fresh idea that will improve the quality of your output.