Full Sail Partners Blog

4 Ways to Improve Employee Utilization

improve employee utilizationIn the recent AE Clarity Report issued by Deltek, the average employee utilization rate was reported as 59.8%. Firms are often confronted with how they can improve employee utilization to create a positive impact on the firm’s bottom line, all while keeping employee morale in mind. To improve employee utilization in both the short term and long term, focus on these four key areas:

  1. Realistic Utilization Target: Firms that set realistic employee utilization targets tend to have higher morale as the goals for target utilization are viewed as attainable by their staff. These realistic targets allow for staff to focus on other, non-production (yet still important) initiatives for the firm, such as business development, staff development, and team building. Firms that allow employees time to focus on these areas will greatly increase employee productivity in the long run through increased employee and team efficiencies, as well as reduced staff turnover.
  2. Proper Resource Allocation: With proper resource allocation, firms can realize a dramatic impact on employee utilization. Appropriate resources should be aligned prior to project initiation based on level and expertise for each task. With proper resources aligned with the tasks, tasks can be performed in a timely manner with the appropriate labor costs incurred against the budget. Proper resource allocation will also help keep your employee realization in alignment with employee utilization, resulting in hours worked actually being billed.
  3. Managing Client Expectations: Balancing resources allows employees to meet client expectations. Through managing the initial tasks and client expectations, firms are able to quickly identify tasks that were not part of the original scope of work. By identifying these tasks up front and notifying the client quickly, you can better manage client expectations and properly keep resources aligned. As a result, you will maintain a good client relationship with realistic expectations, while keeping your employee realization in alignment with your employee utilization.
  4. Real-time Visibility: With any metric such as employee utilization, real-time visibility is critical to properly setting expectations for both the employee and the firm, not to mention serving as a real-time way to measure and track results against the goal. ERPs, such as Deltek Vision, offer you this capability to maintain, measure, and track such key metrics as employee utilization instantly as soon as time is entered into a daily timesheet. This real-time visibility gives your firm insight and the opportunity to influence the final results to ensure resources are properly aligned, client expectations are managed, and employee utilizations maintained.

To improve employee utilization, firms must also keep in mind other areas that require attention. The 2013 Deltek AE Clarity Report identified that improving productivity and streamlining processes result in higher profits for professional services firms. Employee utilization is only part of the equation. Interested in learning more?

See how your firm can benefit from improving your project management processes by viewing our webinar: Get the Work Done! Tackling Project Management to Improve the Bottom Line