Rethinking Utilisation

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.

• Why? How many hours can someone actually work within the week? Do you have the people and cover you need to meet demand?
• Factor in that people take holidays, get sick, have leave entitlements and public holidays

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.

• Why? If someone needs to do something, and it's out of their control, then it is utilised.
• Are your people doing what they need to do within their working hours?

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?

• Why? As mentioned before, not every week is the same. It's fine to have an indicator for how much time should b spent on client work but using it with the context of the other measures listed gives a lot more context as to why/why not.
• How much of that week's available time was spent on client work?

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?

• Why? Determine if the work is required, or whether you should hire someone who can do this as their primary responsibility. Clearer priorities, less conflict and context switching, and easier to understand your lines of business, labour COGS and expenses.
• Can we streamline our systems, processes and technology to reduce the overhead of managing them?
• Do we see value and ROI in our systems, technologies and processes?

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.

• Why? Determine if the time spent internally is productive and useful, if there is a requirement for them to be there and they have no say over it, then it is utilised time.
• Are we wasting time with pointless internal meetings?
• Are engineers working on or being dragged into things they shouldn't be?
• Are we spending more time on ourselves than we should be? How can we reduce wasted internal time while maintaining a team culture?

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?

• Why? If someone worked between 9 and 5, you want to capture they were there and worked those hours, regardless of what they did. Start there and work back to see if it's due to chaos, distraction, lack of direction and clarity, motivation or a number of other factors.
• Are we losing accountability for time and visibility of the effort spent each day?
• Understand when and how time goes missing to reduce distractions and put focus and purpose into the work.

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.

• Why? Understand whether people are regularly running over or under the hours they have to work that week.
• If an engineer had 32 hours available and worked 40, why did they even put in leave?

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.