Hi, I am performing an economic impacts analysis of a construction project with substantial expenditures for professional services--e.g., environmental planning, engineering/design, legal services. I am comparing the results of my model run (with each category of spending by industry inputted as an Industry Change, tied to the year of expenditure) with an estimate of actual FTEs based on invoicing data for billed hours by consultants, engineers, etc. from the professional services firms. Unfortunately, my model results are much higher than the observed FTEs, which I calculated by dividing the number of billed hours by consultants by ~1900 (i.e., 2080 working hours in a year, minus PTO, sick leave, and holidays). By "much higher," I mean, like, double! It is possible that this project has simply been less impactful from a jobs-creation perspective than the I/O model would indicate. But I can't help but think that I'm missing something here, given the magnitude of the difference. So far I have two possible explanations that I am hoping someone can help me think through: 1. For professional services firms, billed hours are not equivalent to working hours--that is, consulting firms have a "utilization" percentage, or proportion of billable hours relative to total hours worked (2080 for a salaried employee). So I really should be using a lower conversion factor than ~1900 to determine actual observed FTEs. 2. Billable employees make up only part of the workforce of a professional services firm--that is, for every 10 billable consultants, there are 2-3 administrative employees, marketing staff, etc. Are either 1. or 2. captured by the multipliers/SAM for these industries? If not, is the potential magnitude of either adjustment sufficient to explain the discrepancy in my results? Thanks in advance for anyone's thoughts!
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