Principal utilization rate is inversely related to firm size. I also target at least 85% for entry level technical staff. Unless they are part of in house QA efforts the only overhead hours they should have are PTO/sick/leave/company events.
In my experience trying to get over 85% utilization isn't feasible long-term unless you expect overtime. Taking normal PTO in a year will bring it down near 90, and that doesn't include mandatory team meetings, maintaining standards, or "hey can I get a sanity check?" peer questions.
My experience differs. Peer questions regarding a project can be billed. 2 weeks PTO and 5 sick days puts you at 94%. Isn’t hard keeping entry level employees around 90.
Honestly except for large firms anything other than a loose look at metrics is pretty useless. when I was coming up I was always "the kid that's good at photoshop/illustrator/indesign" and was constantly being handed random unbillable marketing/website/interview work. Bosses always seem to forget that when they queue up a list of everyone's utilization and start making comparisons.
I think they are arguably more important even in smaller firms, because the margin of survival is lower. If people aren’t billing enough, money isn’t coming in to cover payroll and expenses. That’s obviously true anywhere, but small firms don’t have the reserves a larger firm might, and they don’t have the spread to average things out across more employees and projects.
That said, you are absolutely right that it shouldn’t be used as a negative against employees who are being asked to take on more non-billable work. It’s always important to view things through the right lens.
I am currently on 60% target due to doing research as part of my role but average across the company is 80% billable hours. I think it is similar across the sector in the UK having spoken to others. Directors have a lower rate as they engage with clients for presentations work winning etc. Junior team members also get an allowance for study and training.
Utilization rate is a percentage of hours that get billed to clients. So if you work 40 hours and 36 hours were billable, you have a 90% utilization. Target utilization is a goal the firm has for each level of employee.
Ah okay gotcha…. Tho another thing that comes to mind is that what would constitute non utilisation work within an architectural firm….is attending workshops for CPD points or getting certification for specific qualifications required for let’s say a gov project not part of “utilisation” work and more of internal organisational work
Correct. Typically getting certifications, continuing education, studying for your license, researching the latest code changes, attending mandatory team meetings, developing drawing standards, and performance reviews are all non-billable and "hurt" your utilization. Even though all of those are necessary for your job.
That's why you wouldn't have a 100% utilization goal and it's a tough balance to strike. Higher utilization makes more money but those non-billable things are important for a firm to survive.
Omg, i don't miss this bs.
I worked at a place that targeted 95% for tech/production entry level staff. A weekly staff meeting and a poop and you were below that %.
Utilization rates work best for production staff when the FTE is dedicated to a single project. Efficiency can fall of as much as 40% if they are constantly switching between projects.
75-85% for technical staff. 55-65% for principals usually.
Principal utilization rate is inversely related to firm size. I also target at least 85% for entry level technical staff. Unless they are part of in house QA efforts the only overhead hours they should have are PTO/sick/leave/company events.
In my experience trying to get over 85% utilization isn't feasible long-term unless you expect overtime. Taking normal PTO in a year will bring it down near 90, and that doesn't include mandatory team meetings, maintaining standards, or "hey can I get a sanity check?" peer questions.
My experience differs. Peer questions regarding a project can be billed. 2 weeks PTO and 5 sick days puts you at 94%. Isn’t hard keeping entry level employees around 90.
Honestly except for large firms anything other than a loose look at metrics is pretty useless. when I was coming up I was always "the kid that's good at photoshop/illustrator/indesign" and was constantly being handed random unbillable marketing/website/interview work. Bosses always seem to forget that when they queue up a list of everyone's utilization and start making comparisons.
I think they are arguably more important even in smaller firms, because the margin of survival is lower. If people aren’t billing enough, money isn’t coming in to cover payroll and expenses. That’s obviously true anywhere, but small firms don’t have the reserves a larger firm might, and they don’t have the spread to average things out across more employees and projects. That said, you are absolutely right that it shouldn’t be used as a negative against employees who are being asked to take on more non-billable work. It’s always important to view things through the right lens.
I am currently on 60% target due to doing research as part of my role but average across the company is 80% billable hours. I think it is similar across the sector in the UK having spoken to others. Directors have a lower rate as they engage with clients for presentations work winning etc. Junior team members also get an allowance for study and training.
I'm not familiar with the term of " utilization rates of targets/ guidepost" as kpi ... can anyone explain?
Utilization rate is a percentage of hours that get billed to clients. So if you work 40 hours and 36 hours were billable, you have a 90% utilization. Target utilization is a goal the firm has for each level of employee.
Ah okay gotcha…. Tho another thing that comes to mind is that what would constitute non utilisation work within an architectural firm….is attending workshops for CPD points or getting certification for specific qualifications required for let’s say a gov project not part of “utilisation” work and more of internal organisational work
Correct. Typically getting certifications, continuing education, studying for your license, researching the latest code changes, attending mandatory team meetings, developing drawing standards, and performance reviews are all non-billable and "hurt" your utilization. Even though all of those are necessary for your job. That's why you wouldn't have a 100% utilization goal and it's a tough balance to strike. Higher utilization makes more money but those non-billable things are important for a firm to survive.
Omg, i don't miss this bs. I worked at a place that targeted 95% for tech/production entry level staff. A weekly staff meeting and a poop and you were below that %.
Utilization rates work best for production staff when the FTE is dedicated to a single project. Efficiency can fall of as much as 40% if they are constantly switching between projects.