“Utilization” – do you really know what it means, or what to do with the number when (or if) you have it?
Most companies consider utilization as a measure of how much time (i.e. hours) a person works in relation to the number of possible business hours that are available to actually work. They will take into consideration such things as training time, vacations, sick time, travel – all of the things that aren’t directly “billable” to a customer.
The reason they track it this way is to determine who is actually working, and who is asleep at the desk.
She’s not utilized…
The problem is, the logic is outdated – it’s a relic from a time when engineers billed on a “block time” basis; they’re approaching it the wrong way, and they’re losing money because of it.
It’s time to look at utilization in a completely different way.
If you use billable time as a method of tracking employee utilization, here are four reasons why your thoughts are costing you money: