7 Tools to Measure Utilization

Some agencies put a lot of effort into understanding their team’s Utilization. Others don't even really know what it is. But no matter how big you are or what your goals may be, every agency wants to be profitable. And understanding your team’s Utilization Rate is a crucial part of that. There are a lot of tools out there to help; some of which will just put you on the right track, and others that will minimize that effort as those calculations become more complex.

And here they are: 7 tools to measure Utilization, starting with the most basic and ranked by increasing usefulness.

• The Guessing Game.

  This tactic is most commonly used by smaller agencies or independent contractors. That’s because when you have a team of let’s say five, and only one of those employees doesn’t produce billable hours, it’s easy math (4 / 5 = 75%). While PTO, holidays, sick days, etc. will throw some curveballs, you can still determine a general ballpark of your team’s utilization and find trends. Hey, it’s definitely better than nothing.

• The Spreadsheet.

  A spreadsheet has historically been an accountant’s best friend. And so using it for Utilization to better understand your company finances makes sense. As employees add their individual time on a daily or weekly basis, it gives you a simple breakdown of the estimated hours spent on billable work versus total capacity. The good news is that it’s totally flexible and you can structure it based on any Utilization formula or method you want. The bad news is that customization comes at the price of manual labor — that’s not billable. And as your team grows and calculations get more involved, it will only require more effort with the potential for less accurate data.

• The Time Tracker.

  Time tracking software is great for logging billable hours. Harvest, Toggl — most of these types of platforms offer super user-friendly functionality and automated reporting that make pulling data a lot less time-consuming. The limitation here is what kind of data you can actually pull. Utilization is likely to be one of those formulas, but you won’t have a lot of options for which type of utilization you want to calculate. For teams who want more customization capabilities, you’ll have to move on down the list.

• The Time Tracker / Spreadsheet Combo. Since a time tracker makes keeping and recording time easy, and a spreadsheet gives you the ability to customize your data however you’d like, combining the two methods is the next best thing. Many agencies have their employees utilize time tracking software to simplify the process of inputting their hours, and then export that data into their customized spreadsheet. This gives them total flexibility into the formulas and data their company uses. But it also adds that manual element back into the equation, plus some. Expect a lot of individual management and maintenance to keep your data up-to-date, which only allows more room for error.

• The Resource Planning Software.

  Instead of time tracking, you could go the route of resource planning for a more holistic view of your employee deliverables, allowing you to adjust your output based on employee, department, time frame, and more. While these calendar-like planners aren’t the best for agencies with a lot of smaller projects that change from day to day, they are good for mapping out expected Utilization for long-term assignments. For example, if Susan is allocating 4 hours a day to one project over the next 3 months, you can estimate her utilization based on these expectations. The problem is — what if she doesn’t meet them? With historical data being the missing piece here, it can leave discrepancies in the predicted versus actual billable hours.

• The Do-It-Yourself.

  If you want the customization ability, but think spreadsheets are too cumbersome to manage, then you could just create your own software. Many agencies think using their development skills and taking their Utilization management into their own hands is the way to go. But we’ll be blunt here — this is not a good idea. An attempt to reinvent the spreadsheet not only takes time initially, but also requires a lot of updates and maintenance. Building tracking software is not your core business, so why waste your billable hours on it?

• The Easy All-in-One.

  While options #1 - 6 have all offered unique benefits for agencies of different sizes and needs, they also present limitations that force you to choose what’s most important to you when it comes to understanding your Utilization. You don’t have to be a global agency to need a better solution. Metric AI is the first software of its kind that gives agencies of any size a highly-customizable, fully automated tool dedicated to managing their finances. Choose the Utilization formula you want to use, whether you want to track by employee, department, or location, how long or how often you track this data, and get real-time insights into your financial performance on any level, at any time.

And it’s totally ok to change your mind — and change it a lot. If today you want to know your Resource Utilization for one employee and tomorrow you want to know your Billable Utilization for the development team, there’s no manual updating or maintenance required. You’ll get easy-to-consume, actionable insights that help you make better business decisions for the future.

To learn more about Metric AI and how it can provide your agency with a powerful tool to calculate Utilization and much more, contact us today.