Project and resources managers have a key responsibility to track project resources and make sure they are busy but not overburdened with work. To do so, they must measure and track resource utilization.
In this article we explore different techniques managers can use to track and report on the utilization of their resources.
And if you are looking for a resource utilization report template, check out our free utilization report template with downloads in Excel or Google Sheets format.
Table of contents
What is resource utilization?
Resource utilization is a metric that shows you how much of your available resources time you are currently using. It helps you spot if your team has too much work allocated or if they have the capacity to take on more work.
Utilization reporting is one of the five key elements involved in resource management.
Why is it important to track utilization of resources?
At its heart, resource utilization analyzes whether your people have too much work assigned (over-allocated) or too little work assigned (under-allocated).
- Over-allocated people are less productive and overburdened by work, which can lead to burning out.
- If your people are under-allocated you are not using the total capacity of your teams to deliver your projects.
How to calculate resource utilization - calculation and formula
There are many ways to work out utilization of resources, but here are the two most common and useful formulas. These will help you track the two most important resource utilization KPIs.
In the examples below we calculate utilization weekly utilization for a specific person. However, you can use the same process to calculate utilization by day, month and quarter or for teams, skill sets or even your whole organization.
Calculation #1: Overall utilization formula
An engineer on your team works 8 hours a day, 5 days a week. So we can calculate their availability for the week at 40 hours.
They are assigned 20 hours of work for the week. So their utilization is 50%.
And here is how we work this out: 20 / 40 X 100
Calculation #2: Project utilization formula
This is typically used to determine what percentage of a resource’s time is used on project work.
An engineer on your team works 8 hours a day, 5 days a week. So we can calculate their availability for the week at 40 hours.
But they spend 5 hours per week in non-project meetings, training and doing administration. So their availability for project work is 35 hours per week.
They are assigned 20 hours of work for the week. So their utilization is 57%.
And here is how we work this out: 20 / 35 X 100
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What is the ideal resource utilization percentage?
There is no ideal utilization percentage – one thing is for sure it is not 100%. Most research suggests aiming for around 70%-80% which leaves headroom for unexpected activities.
Resource utilization in project management
Tracking resource usage and utilization is an important tool in project management and it is often the case that people need to be planned onto multiple projects at the same time. So a particular challenge is to ensure people are not overloaded when all their work is taken into account.
Benefits of tracking resource utilization
Tracking and monitoring resource utilization means managers can better understand their team’s workload. This metric can help you:
- Balance workload. Knowing your people’s utilisation makes it easier to balance the workload across people and teams to smooth things out. This is sometimes called resource levelling.
- It keeps work flowing. If resources are over-utilized eventually this will impact work throughput. So ensure people are not overburdened to help keep things moving along.
- Spot skills in demand. Resource utilization reporting lets you spot skills that are in demand so you can develop a training plan to fill any shortfalls.
How to create and build a resource utilization report
If you want to build a resource utilization report, the easiest way is to use a spreadsheet template. Download our free resource utilization report template and adapt it to your needs to kick-start your utilization reporting.
Alternatively, look at using a resource management tool like Kelloo which includes out of the box resource utilization reports.
Utilization report examples
A utilization report helps you quickly spot resources that are over or underutilized and there are different styles you can use depending on your needs. Here are some examples from Kelloo.
Resource utilization heat map
A visual heat map is a great way to show resource utilization as it is easy to understand. Periods, where resources and teams are over-utilized, are shown in red and underutilized periods are shown in green. You can also change the cell fill height so it is easy to spot trends.
Resource utilization report
Or you can create pivot reports showing the utilization of your resources which you can export as a spreadsheet if you want to perform more analysis.
Resource utilization dashboard
Dashboards are a great way to show resource utilization and usage along with other key project and portfolio metrics.
Resource utilization software
Trying to calculate and track resource utilization using a spreadsheet can be time-consuming and error-prone. An alternative is to use resource management software to help with resource utilization tracking. Explore this topic further with our resource management software buyers guide and comparison of resource management software.
Tools like Kelloo let you easily track and report on resource utilization as well as plan out your work. The major advantage is that as you make changes to your plans you instantly see the latest utilization of your people.
