Client Work Matters: Optimize Your Employee Utilization

Knowledge is power, so getting a clear look at your team’s utilization is the best way to gain control of your business’s profitability.?

In this week’s edition of Client Work Matters, we dive into employee utilization — how to measure it and how to use your current rates to improve profitability in the future. Calculate your employee utilization rates and use our five strategies for optimizing billable time for your team.?

Calculate Your Employee Utilization Rates

Employee utilization is generally expressed as a percentage. There are several variations of utilization figures that could be useful to you as a business owner or leader.?

Here are three of the most common employee utilization calculations:

NOTE: As you can see, you won’t be able to calculate an individual or average utilization rate without knowing how much of your employees’ time is billable. To gather those numbers, you’ll need to conduct accurate time tracking, preferably using a platform that facilitates efficiency at every stage of the client relationship.

How To Optimize Worker Utilization

Once you know your utilization rate, you can shift your team’s focus from non-billable to billable work in a number of ways. Here are five of the most effective.

1. Routinely review billable vs. non-billable time

To shift non-billable time to billable, you need to know how your team's time is allocated. Regular utilization reports can help identify opportunities to consolidate non-billable efforts. Paying close attention to resource management is crucial, especially as your team grows and works on different projects.

2. Track actual vs. estimated time

Underestimating time can lead to scope creep and incorrect billing while overestimating can result in low productivity. Track estimated vs. actual time at every stage to avoid missing or duplicating tasks and become mindful of the unnecessary loss of a few minutes here and there, which add up to valuable hours.

3. Establish clear job responsibilities

Clear assignments and explicit communication of job responsibilities support optimal utilization. Delineated roles and tasks can highlight utilization problems or the need to hire new team members when the workload is overwhelming.

4. Collect employee feedback

Data is not always enough to determine if your employees are struggling, and a shift in one team's responsibilities may create a bottleneck for another. Prevent these dilemmas by regularly connecting your team with leadership in one-on-one meetings. This helps identify problems before they affect your profits.

5. Encourage breaks and regular time off

Regular breaks have been shown to improve productivity. They can help employees complete non-billable tasks more efficiently and dedicate more time to billable client work. Tracking staff utilization before and after implementing a culture change around breaks can provide evidence of the monetary and human benefits of allowing the brain to rest.

It’s easy to see the ways time tracking can benefit your organization. Continue to explore the benefits of automated time tracking or find ways better time tracking can support your efforts when resources are tight.?