How to Calculate Resource Utilization
What is Resource Utilization?
Measures percentage of available work time actually spent on billable or productive work. Identifies capacity gaps and scheduling inefficiency.
Step-by-Step Guide
- 1Track billable/productive hours per resource
- 2Divide by total available hours
- 3Calculate: (productive hours ÷ available hours) × 100%
- 4Benchmark against industry standards
Worked Examples
Input
1600 avail, 1400
Result
87.5%
Common Mistakes to Avoid
- ✕Targeting 100% utilization (leaving no flexibility)
- ✕Not accounting for required non-billable time
Frequently Asked Questions
What utilization rate is healthy?
Service firms target 70-85%; some waste (5-15%) is normal for training, admin, and context switching.
How do I improve utilization?
Better project scheduling, reduce context switching, build resource pools, optimize allocation.
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