Utilization Rate Calculator for Teams

You should input the following data:

Available capacity: it's the total number of hours that a resource, like a team, is available to work during a specific period. For most employees, the available capacity is around 40hrs/week, or 160hrs/month.

Total hours tracked: they represent the actual hours tracked for all projects, tasks and activities by a resource over the same period. They include both billable and non-billable hours and cover all the time spent on work-related tasks.

Total billable hours: billable hours are the time you can actually bill to a client. They correspond to work performed on client projects, that are agreed upon as billable under a contract or agreement.

To get the utilization rates:

Resource utilization: this is the percentage of available capacity that a resource has actually worked, regardless of whether the work is billable or not.

Billable utilization: this represents the percentage of available capacity that a resource has spent on billable work. Understanding its billable utilization is key for revenue generation: higher billable utilization generally means more hours billed to clients, leading to increased revenue.

Here are a few examples:

Employee utilization
John works 39h per week in a marketing agency. Last week, he worked on client projects during 32 hours, these hours are billable. His weekly capacity is 40 hours.
- Total resource utilization: (39 hours / 40 hours) * 100% = 98%
- Total billable utilization: (32 hours / 40 jours) * 100% = 80%
Team utilization
- You have a team of 4 employees, each of them has a 40 hours weekly capacity:
  - Marc worked 35 hours, including 28 billable
  - Anne worked 42 hours, including 35 billable
  - Eva worked 38 hours, including 33 billable
  - David worked 44 hours, including 25 billable
- You'll first have to sum all your team members worked and billable hours.
  - Total hours worked: 159 hours
  - Total billable hours: 121 hours
  - Total available hours: 160 hours
- Then, calculate your resource and billable utilization rates
  - Team resource utilization rate: (159 hours / 160 hours) * 100% = 99%
  - Team billable utilization rate: (121 hours / 160 hours) * 100% = 76%

What's the difference between resource and billable utilization rate?

Resource utilization and billable utilization differ in the type of work being measured. Resource utilization measures the overall percentage of a resource's available time that is spent on any work, including both billable and non-billable tasks such as internal projects or administrative tasks. However, billable utilization only focuses on the time spent on work that can be billed to client and directly generates revenue. It's an important metric for professional services providers and any teams working on projects. By measuring both you'll get a clear view of how your team's time is being used and if it's productive enough. If your billable utilization rate is low but your resource utilization rate is high, it'll mean that your team is probably spending too much time on non-billable hours and that you can improve your profitability by increasing billable hours.

What is a good utilization rate?

A good utilization rate depends on the industry and the resource's role. A common benchmark for a good utilization rate is around 70% to 85%. This ensures that resources are being used effectively without leading to overwork or burnout.

For billable utilization, a 80% rate or above is considered good. A 100% rate is usually not sustainable, since your team will need to spend some time on non-billable tasks: internal meetings, training or personal development, that are also key for a company's success. The billable utilization rate will vary even more depending on the resource's role. For example, a manager will probably have a rate around 40% to 50% since there are focused on managing projects, their team and clients. On the opposite, team members that actually work on project should aim for a higher billable rate, above 75%.

Here is breakdown by industry:

Creative agencies: 70% to 80%. Creative work can involve more non-billable brainstorming sessions and internal collaboration, lowering down the benchmark.
Consulting firms: 80% to 85%. Consultant have mostly a project-based or client-driven work, which is why the utilization rate should be above 80%.
IT and engineering agencies: 75% to 85%. This benchmark reflects the balance between project work and ongoing internal projects or professional development.

Track your employee's utilization with Bonsai

Tracking your resource and billable utilization is key to increase your company's profitability, but it can be challenging to do so without any tool. With Bonsai, you can easily track both rates and get instant reports on your team's utilization.

In the "Report" section, you'll get access to the utilization report, highlighting the total capacity, time tracked, total utilization and billable utilization, overall and by team member.

How does it work?

Step 1: Set capacity

Add your team members to Bonsai and input their daily or weekly capacity

Step 2: Track time

Let your team track their time using the integrated timers on tasks. You can also add time entries manually.

When tracking time, you'll be able to select if this time is billable or non-billable.

Step 3: See your utilization report

Navigate to the report section and visualize your utilization rates. You'll be able to filter the report by project, team member, client, currency and dates.

Step 4: Analyze your utilization rates

Identify which team members are over or under utilized and use the resource planning tool to improve your overall employee allocation.

Track your team's utilization with Bonsai following these easy steps. Try it for free for 7 days or book a demo to know more.

More resources on employee's utilization: