Rethinking Utilisation
Nathan Hutchison
Helping APAC tech organisations deliver better value and experience with compassionate leadership and accountability
There's no solid agreement in the industry of what constitutes engineer utilisation, as someone who has been both an engineer and a manager of engineers, I have strong opinions on this.
If you're basing a lot of your people capacity, hiring and staff performance metrics on utilisation, but utilisation excludes things you mandate they have to do, such as team meetings, compulsory training, helping sales with queries, managing shared infrastructure and internal systems, then it's in your engineers best interest to stop doing those all immediately.
Why? Because the numbers never reflect the reality of utilisation of the team.
An all-too-common situation I've come across is an engineer spending 30 hours in client-facing work (would equal 75% of a 40 hour week) only to have had to spend an additional 20 hours in meetings, managing shared infrastructure and now show as "60% utilised" in a 50 hour week. Since we're focused on % and not the hours, that 60% becomes the point of priority and the 10 hours of overtime gets disregarded. Trying to make up that % is a constantly shifting target as well; you keep spending more and more hours to hit targets that don't make sense.
If you're not making decisions based off the utilisation, then you need to consider why you're measuring it and the behaviours you drive by measuring.
Here's some things to measure for better visibility of where the time goes.
Focus on available hours. Not every week is the same, some weeks have leave, public holidays and sick days. While these aren't utilised hours, they're also equally not unutilised, and people are legally entitled to time off. Exclude these hours from the available hours of the week; if someone takes 8 hours of leave, they have 32 hours available that week.
Focus on actual utilisation measured against available hours.?Think about what level of control an engineer has over their work. Acknowledge that non-client work is still necessary, even if you outsourced it. Standups, meetings, approved training and development, and monitoring backups are all productive utilisation to achieve the job they're required to do. If you need them to do them and they don't have a choice over it, it's not fair or reasonable to penalise them for it.
Note: Time utilised doesn't always equate to time being effective or productive
Focus on client billable and utilised time against available hours. If an engineer had 32 hours available that week and worked 26 of them in client facing work, they are ~81% billable. If we purely focus on the 40 hours that they could have worked, it's 65% billable for the week, do they need to work an additional 8 hours to make up their numbers that week?
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Note: Time spent on clients doesn't always equal value delivered. You can easily fill a week with busy work and low value task fulfillment that should be automated.
Focus on internal billable against available hours. What would you need to pay another provider to do if you didn't do it yourselves? Examples include internal monitoring, managing backups, reporting, onboarding coworkers, internal support, and configuring your network. How much time and $ is going into it? Is it better to outsource or hire someone to take control of this so that the rest of your team can focus on client billable?
Focus on internal utilisation against available hours. Used as an overarching measure of how much time is spent on internal meetings, assisting others with their work, training, research, NOC and backup monitoring etc.
Focus on unutilised time against available hours. How many hours were people working and unutilised for the available hours that week? Do you have a "payroll wrap", or "unaccounted time" code that people can put their time to that goes missing when we context switch and jump between numerous tasks and priorities?
Focus on total time against available hours: A summary of how many hours have been entered compared to what was available for them to work every week. This count would include all utilised and unutilised time across internal and client facing.
The measures above will help to break down the numbers more, rather than going with rules of thumb that you're measuring your members performance against.
Start with some of the above measures for a better picture of the effort spent and acknowledge your teams contribution. From here, assess and see how you can improve with meaningful and enjoyable work while reducing wasted effort.
You can take many actions from the information you'll find, from what you prioritise across clients and internally, people you need to hire next, pricing of your agreements, billing rates, processes, technology, systems and processes. The key to starting is looking at the right data and understanding that work is nuanced, people are complicated, and time is finite.
Great point Nathan Hutchison our old favourite Workflow Max (RIP) had an underused feature to have capacity reducing jobs to achieve exactly this