Some thoughts on utilisation for those that didn’t ask. What it means: What % of a person, team or business is being spent on billable work. What does billable mean? Billable work is any time spent delivering something the client should pay for. Not what they will pay for. It’s important to clarify internally what this time is. For utilisation to be useful you need to understand how much time you should have been paid for not what you actually spent. That way you can course correct the next time. A typical example is meetings. A client meeting that helps.the delivery of the service or product is billable. It might not be in the budget but those people in that room are helping the delivery and efficiency of the thing that was sold. If it’s a meeting about a client to try and sell them more stuff, that’s not billable. What else should I track? I like to track non billable, internal and new business but you can track whatever categories you want. What’s important is that the information you get is useful but also that it’s accurate and simple to collect. New business is useful as this will normally be seen as internal but actually it’s helpful to break it out. Is utilisation that useful? Yes and no. My mindset around utilisation is that you should know it before you run it because it should just represent what was booked in your resource system. It’s a historic metric so it’s useful for me when I come into a business to see if what I see in the numbers is shown in the utilisation reporting. It also shows how well setup your processes are and whether you understand how the agency makes money. What about utilisation targets? I like to suggest not calling them targets and instead call them “minimum requirement”. People often hit a target and then stop. If you have built your rate card or agency around utilisation you don’t want everyone just working to their target, you want them to do more if they can. This will mean more margin and an employee is paying for more of their own time. Utilisation targets aren’t for employees they are for management to understand what their team is doing and to course correct if needed. An employee shouldn’t be saying “I need to be x% billable this month” they should just be doing good work that is planned for them. This is because they can’t control what work is sold, how it’s sold or whether there is enough work. Anything else? Recovery is more important to me. That is, how much did we get paid for the value of the billable time we spent. This is where you can understand how well you scoped, how well you resourced and if you were efficient.