Top 3 Labor KPI Metrics for Services Organizations

What’s Up with Labor Utilization? Utilization is a critical metric to assess just how you’re doing as an organization – and a great way to benchmark yourself against your corporate objectives and your peers. If you’re a Services organization, you definitely want to know what’s “up” with utilization.  To be more specific – how is your staff being utilized?  How “billable” are your personnel? And of the billable hours that your people are putting in – are you managing to capture enough of those hours in billing, without excessive discounting or “removal” of hours? Let’s take a look at some of the metrics Services organizations need to be aware of. Resource Utilization Pretty much all Services organizations are aware of this key metric.  Of the total hours worked by your staff, how many of those hours are being used to generate revenue, or on tasks that are considered to be critical to generating revenue?  Say Anne is working a 50 hour work week, had an 8 hour sick day and 7 hours in non-billable, or idle, time.  Anne’s total time spent on “revenue-generating” tasks was 35 hours – her resource utilization is 70%.  If your corporate objective is to keep billable staff at 75% utilized on activities contributing to revenue – Anne is below the threshold.  Perhaps time to take a closer look at the 7 hours of idle time and find opportunities to turn those hours into revenue, or at the least, into hours that contribute to generating revenue. Next, let’s look at Billable Utilization as an additional way to view billable time. Billable Utilization A close relation to Resource Utilization, Billable Utilization looks at how “billable” staff is,