The formula
utilisation = productive hours ÷ total capacity
What it means
Capacity is simple: people times hours times weeks worked. What almost nobody works out is how much of those hours ends up as productive work, because meetings, training, admin and sick leave are taken for granted and never subtracted from any plan. Doing it shows the gap between what a team can do on paper and what it does.
How to work it out by hand
- Multiply people by weekly hours and by weeks worked
- Add up the yearly hours of meetings, admin, training and absence
- Subtract them from capacity: those are the productive hours
- Divide by capacity for the utilisation
What is worth knowing
A hundred per cent utilisation is not a target, it is an alarm. A team with no slack absorbs no surprises, trains nobody and improves nothing, so the first problem that turns up eats the whole plan. Consultancies typically run between 70 and 85%, and above that the margin disappears. It is also worth looking at the per-person weekly figure: «thirty-three productive hours out of forty» lands much better than a percentage.