More Than Just a High Number: 3 Factors to Achieve Healthy Utilization of Your Workforce

Everyone in the professional services industry recognizes the importance of monitoring and optimizing utilization. It is one of the most fundamental KPIs on business performance with direct impact on companies’ top and bottom line. However, the aim of optimizing it just by “squeezing the lemon harder” never leads to good long-term results. 

Rather it creates a narrative where the people start feeling that “nothing is enough” and “only utilization matters” eroding their sense of purpose, autonomy, and mastery. Professionals become easily frustrated and disengaged, soon seeking new challenges in a more people-friendly environment. Hence, your goal should not only be on getting the utilization number as high as possible but also to get utilization as healthy as possible.

Healthy utilization is a concept that encompasses the following elements:


1. It is high enough for strong business performance


2. It consists of work that motivates people


3. It can be led, monitored and optimized with three key drivers

How you manage and optimize utilization is tightly linked with the company culture. From our experience, prioritizing healthy utilization not only cultivates a people-centric environment but also supports top business performance. To assess your organizational well-being, explore the intricacies of the three key drivers of sustainable business growth. Let's delve deeper into each of these.

1. Maximize the theoretical maximum of billable utilization through lean operations

In order to have high enough billable utilization, you should first understand the “theoretical maximum” of it. Theoretical maximum of billable utilization is the total capacity of your organization minus the amount of work needed to operate your business, often called “overhead” or “non-billable work”. 

When you maximize theoretical utilization you create space for normal fluctuations without inducing stress. To minimize overhead, focus on finding ways to run your operations as efficiently and smoothly as possible. To do this, ensure you have: 

• Seamless process from sales to project delivery
• Connected and high quality operating data 
• Cross-company collaboration supported by real-time tools with no need for spreadsheets, emails, or phone calls

Low overhead makes you not only more profitable but also more price competitive when you need it. 


2. Involve everyone in optimizing utilization of billable workforce

Often utilization is considered to be management’s problem. It should not be. People are clever, they sense the dynamics and situation whether they are involved directly or not. So why not involve the people doing the work head on?

Engage consultants in optimizing utilization by providing them with an opportunity to understand the situation, the options, and the tools to manage it in their own role. In order to facilitate collaboration, provide everyone a “360-view” combining sales, staffing and forecast data in real time. 

When you unveil the data, increase transparency, and involve people in running the business, your culture changes for the better. People discuss challenges and solve problems  together. This raises people’s sense of purpose in the work while lifting the burden off of management’s shoulders. You might even be surprised to notice how many good ideas your organization has.

When you’ve optimized your structure and overhead (step 1) and you are able to get billable people highly utilized (step 2) you can calculate your total target utilization (e.g. 85% theoretical maximum x 95% billable utilization = 81%). It is crucial to monitor both numbers in real-time to understand where the problem is when utilization is not meeting target levels. Then, there is one more step to take.

3. Measure the quality of utilization with the willingness index 

Healthy utilization not only considers how high the metric is but also the quality behind the number. When utilization is of high quality, it means that people can work on things that motivate them. When you match projects with employees’ aspirations and growth desires, you create  a win-win-win situation for the company, client, and the professionals. 

To maintain high quality utilization, continuously monitor the “willingness index” of people’s assignments. The willingness index is a simple formula on how well the projects match with people’s willingness and aspirations. 

Maintaining quality is easier when you have a method for everyone to manage their skills and willingness, access to connected operational data, and a possibility for people to indicate interest in upcoming projects. Here too, transparency to relevant data is key.

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Utilization is a crucial factor in driving performance of professional services business. The challenge of managing utilization is not about understanding the mathematical equation but its impact on employee engagement and culture. How to maximize utilization and keep people highly motivated at the same time? How to achieve healthy utilization?

Managing utilization does not have to be a negative or unspoken theme within your organization. Instead of viewing it solely as a static number for managers to worry about, broaden your perspective to account for its multiple dimensions. Involve your entire company in operating the business to support people-first culture and amazing business results. Not only is it good for your people and business, your clients will get higher value with highly engaged and motivated professionals who are dedicated to solving their problems.

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