Total standard working hours in the period (excluding holidays/time off).
Hours actually charged to clients or projects.
Used to calculate realized and potential revenue.
Utilization Rate:0%
Performance Status:
Realized Revenue:–
Unrealized Revenue (Opportunity Cost):–
function calculateEur() {
var capacityInput = document.getElementById('eur_capacity');
var billableInput = document.getElementById('eur_billable');
var rateInput = document.getElementById('eur_rate');
var resultsDiv = document.getElementById('eur_results');
var capacity = parseFloat(capacityInput.value);
var billable = parseFloat(billableInput.value);
var rate = parseFloat(rateInput.value);
// Validation
if (isNaN(capacity) || capacity <= 0) {
alert("Please enter a valid Total Available Capacity greater than 0.");
return;
}
if (isNaN(billable) || billable 0;
if (hasRate) {
realizedRev = billable * rate;
var nonBillableHours = capacity – billable;
unrealizedRev = nonBillableHours * rate;
// If billable > capacity (overtime), unrealized revenue is 0
if (unrealizedRev < 0) unrealizedRev = 0;
}
// Display Results
document.getElementById('eur_result_percent').innerText = utilizationRate.toFixed(1) + "%";
// Status Badge Logic
var badgeHtml = '';
if (utilizationRate < 70) {
badgeHtml = 'Under-utilized';
} else if (utilizationRate >= 70 && utilizationRate <= 90) {
badgeHtml = 'Optimal';
} else {
badgeHtml = 'Over-utilized (Burnout Risk)';
}
document.getElementById('eur_status_badge').innerHTML = badgeHtml;
// Revenue Formatting
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
});
document.getElementById('eur_realized_rev').innerText = hasRate ? formatter.format(realizedRev) : "N/A";
document.getElementById('eur_unrealized_rev').innerText = hasRate ? formatter.format(unrealizedRev) : "N/A";
resultsDiv.style.display = "block";
}
What is Employee Utilization Rate?
Employee Utilization Rate is a critical key performance indicator (KPI) for professional services organizations, agencies, and consultancies. It measures the efficiency and productivity of your workforce by comparing the time employees spend on billable client work against their total available working hours.
Understanding this metric helps businesses identify if they are overstaffed (low utilization) or if their team is approaching burnout (excessively high utilization). It is directly tied to profitability and operational health.
The Formula
The calculation for utilization rate is straightforward:
Utilization Rate = (Total Billable Hours / Total Available Capacity) × 100
Example: If an employee works a standard 40-hour week and logs 30 hours of billable client work, their utilization rate is (30 / 40) × 100 = 75%.
Components of the Calculation
Total Available Capacity: The total number of hours an employee is available to work during a specific period. This is often calculated as standard working hours minus holidays and paid time off. Common benchmarks are 2,080 hours per year or 160 hours per month.
Billable Hours: The actual number of hours spent on tasks that can be charged to a client. This excludes internal meetings, administrative tasks, training, and business development.
Unrealized Revenue (Opportunity Cost): Calculated in the tool above, this represents the potential revenue lost during non-billable time. While some non-billable time is necessary (e.g., training), minimizing excessive administrative drag is key to profitability.
What is a "Good" Utilization Rate?
While the ideal rate varies by industry and role, general benchmarks include:
70% – 80%: This is widely considered the "sweet spot" for production-level employees. It ensures profitability while leaving enough time for administrative tasks, skill development, and breaks.
Below 70%: Often indicates under-utilization. This may suggest that the company is overstaffed or there are inefficiencies in the sales pipeline preventing enough work from coming in.
Above 90%: While this looks profitable in the short term, it is unsustainable. Consistently high utilization rates lead to employee burnout, high turnover, and a lack of time for innovation or internal improvements.
How to Improve Utilization Rates
To optimize your team's utilization, consider the following strategies:
Track Time Accurately: Ensure all employees are logging hours correctly. "Lost" hours that aren't recorded can artificially lower utilization rates.
Reduce Administrative Burden: Automate non-billable tasks where possible to free up more time for client work.
Resource Planning: Match the right skills to the right projects efficiently to avoid bench time.
Adjust Pricing Models: Sometimes, low utilization is a sign that the scope of work is being underestimated.