Need to create a utilization report, but don't know where to start? Learn how to build utilization reports and group charts in our guide.
In professional services businesses, resources are investments. Salaries and wages represent costs that you expect to make money on. But how do you know how if it's money well spent? And how can you tell if your staff are being productive with their time?
It's called resource utilization. When you understand how to track and monitor it with a utilization report, you're able to improve productivity and the return you get from your resources.
However, according to Hubspot, only 58 percent of agencies actually track their utilization rates. This is a glaring omission that results in higher costs and wasted talent. Knowing how to build a utilization report and doing so will not only bring more clarity into how efficiently the business spends time, but also help to predict demand.
A utilization report is a record of your employees' utilization levels. Resource utilization, in turn, is a metric that shows how well a resource is being used on a scale from 0 to 100%. Resource utilization rates are used by project managers and business leaders to identify how productive resources are, with an eye to optimizing their use for the benefit of the organization.
There are a a handful of different metrics that illustrate utilization rates, and these metrics make up a resource utilization report.
Billable utilization is the percentage of a person's capacity that is spent on billable working hours.
Non-billable utilization - as you may expect - is the percentage of a person's capacity that's spent on non-billable tasks. This can include training, administrative work, or any other non billable hours.
Total utilization is the overall percentage of how much a person is using their time productively, either on billable or non billable work.
Because utilization reports should reflect a person's, department's, or organization's billing efficiency over a set period of time, they can be of two types: individual employee utilization reports, or group utilization charts.
An employee utilization report allows managers to see resource utilization at an individual level across the entire resource pool. This helps to get down to a specific team member and track the time spent on a specific project within a chosen time frame. Employee utilization reports can visualize when team members are most productive, which projects have the longest admin tails, and whose role is in demand.
In turn, group utilization charts will help senior management gain understanding of utilization rate of departments and teams, also being able to look at the demand of specific skills. This data can be used to tell whether the overall business is spending its time productively and whether any improvements need to be made on the hiring front.
A utilization forecast is an estimate predicting the anticipated extent to which human resources will be used in the foreseeable future.
Often, a utilization forecast shows you metrics like individuals’ utilization percentage, time off, and assigned/allocated hours — including both billable and non-billable utilization.
In so doing, utilization data improves resource allocation and planning and contributes to reducing employee burnout. Here's an example of a utilization forecast in Runn:
With so many metrics and buzzwords in resource management, it can be difficult to read all the numbers in front of you. But here are some recommendations as to what they mean and how to read them.
The total utilization rate should be as close to 100% as possible. The reason being, this method factors in your team member’s time spent on both billable and non-billable time (Total Registered or Scheduled Hours / Total Available Hours)* 100).
An ideal billable utilization rate is around 70 to 80%. Non-billable work is inevitable in any workplace, and having a target utilization rate that's too high can mean delays on one project have flow on effects for others.
Lower-than-expected resource utilization (e.g., 50%) is frequently a sign that the project is overstaffed and has an excess of resources.
A higher-than-expected resource use rate (120%) may indicate that someone is overworked.
As a result, anytime your organization has a resource deficit, utilization will be at its highest, and vice versa.
In any event, if resource utilization isn't where you want it to be, you should look into it deeper. You'll be amazed at what caused the percentage to surge or plummet.
One of the main benefits of having a monthly employment utilization report is it enables project managers and other business decision makers to plan ahead with confidence. It signals in advance how much capacity team members have at any point in time, which helps to plan future projects and any other work. It's particularly useful when making decisions on the fly, such as an unexpected delay or bottleneck, because it displays real-time utilization rates for resources across the business.
Resource utilization reports also help to adopt resource management best practices, where team members are supported and empowered to be at their best. It helps to identify people who are commonly over-worked, or those with capacity that can be put to better use. This means managers can allocate resources so that workloads are sufficiently challenging to keep people productive and motivated without burning out.
Knowing resource utilization also helps to inform staffing decisions. If a particular team member or business unit is consistently over-utilized, that can signal it may be time to hire in that area. At the same time, if resources are regularly under-utilized, it may be because they're surplus to requirements.
It's also a chance to look for efficiencies by optimizing the ratio of billable utilization to non-billable utilization. Perhaps there is routine non-billable work that isn't necessary or can be made more efficient, or it may be time to hire a dedicated administrator to handle that kind of work.
With Runn's Utilization Report, you'll be able to see where every one of your team members is spending their time and how productive they are. You'll know who's available for new projects and who's about to hit their limit. That kind of insight can help you redistribute work in a way that keeps everyone engaged and motivated. To get accurate data out of your utilization report, there are two things to consider in advance.
Now it’s time to decide what values you want to use in your report. The easiest way is to simply track the hours worked by each resource in a given period of time against the total hours available. This gives you an easy percentage that indicates how much of the resource was actually utilized during that period of time.
However, agencies that deal with billable projects may need more than that and will benefit from tracking billable utilization. This means that you will have to calculate:
Regardless of how you want to track utilization, Runn cuts both ways, building a real-time report for you as the hours are scheduled or registered.
This step, however, is nearly impossible without timesheets.
For you to build a bandwidth utilization report, your team will have to register time. Putting in actual hours spent will set the report in motion. More often than not, this initiative can be perceived as the necessary evil by employees. But the resistance will drop as you explain that a utilization report does not intend to measure individual performance. Vice versa, it is used to predict resource demand and take off some work from the team's shoulder and pass it on to the new hires.
Remember that time registrations don't have to be made on a task level. Helping your teams understand and differentiate between billable and non-billable work so they can enter it properly is the best practice.
Here's an example of a detailed workforce utilization report from our demo data:
Start a free trial and go to Reports > Utilization to see Runn's People Utilization Report.
The report calculates everyone's actual utilization rate (total and billable) across all the projects your employees are assigned to. In the Detailed version, you can check utilization rates on specific projects and within different time periods. If you click on the Tentative toggle, the utilization report will also show you a scenario based on the scheduled hours on projects that haven't started yet.
In Runn, utilization you see in the future is based on the scheduled hours, while past utilization rates are calculated taking into account time registrations. This way, it's easy to see the full picture of what's been planned and done.
As long as you schedule your team's work and register time, building a resource utilization report is easy. Instead of using a clunky old template in Excel, start a free trial of Runn and begin predicting your resource demand today.
