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What is billable utilization?
Utilization rate is the metric that guides a project-based business. It is also a metric that means different things in different organizations.
Is vacation included in the denominator? Internal training? Sales support? Different answers produce vastly different figures, making comparisons across the board meaningless. Write down the definition and apply it consistently.
An organization where everyone is fully billable has neither the capacity to take on new assignments, the time for professional development, nor the flexibility for anything to take longer than planned. A healthy level is considerably lower, and the right level depends on the business model.
Either too little work has been sold, or staffing has been poorly planned, leaving people waiting for assignments that are available. These are two entirely different problems with two entirely different solutions—and the figure alone does not distinguish between them.
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