Utilization rates. If you’re in the architecture and engineering (A&E) industry, you’ve heard this term tossed around in every project meeting and financial review. It’s one of those crucial metrics that directly impacts your firm’s bottom line—but it’s also one of the most misunderstood.

Get it right, and you’re maximizing productivity, keeping your team happy, and improving profit margins. Get it wrong, and you’re dealing with low utilization rates, increased overhead costs, and overworked staff who are stretched too thin.

So how do you track utilization rates effectively? And more importantly, how do you improve them without burning out your team or sacrificing client satisfaction? Let’s break it down—and show you how Deltek Vantagepoint can help.

What is a Utilization Rate?

Simply put, utilization rate measures how much of your team’s available hours are spent on billable tasks. It’s expressed as a percentage and serves as a key metric for understanding how well your resources are being utilized.

In an ideal world, you’d want every hour to be billable, but we all know that’s not realistic. There are always administrative tasks, training, and internal meetings that take up time. The goal is to strike the right balance between billable work and non-billable hours without compromising operational efficiency.

How Do You Calculate Utilization Rate?

The utilization rate formula is pretty straightforward:

For example, if an employee has 40 available hours in a week, and 32 of those are spent on billable tasks, their utilization rate is 80%.

Tracking this metric regularly helps firms monitor utilization rates and optimize resource allocation. But here’s the catch—accuracy is key. Without reliable data, it’s easy to overestimate or underestimate your team’s utilization.

What is a Good Utilization Rate?

It depends—there’s no one-size-fits-all answer. In the architecture and engineering (A&E) industry, the sweet spot for a good utilization rate usually falls between 75% and 85% for billable employees. Hitting this range means your team is spending most of their available hours on revenue-generating work while still having enough time for essential internal tasks like training, business development, and project planning.

However, utilization rates can vary based on roles and responsibilities. For example:

• Technical staff (architects, engineers, designers): A utilization rate of 75-85% is often considered ideal, ensuring they focus on client work while allowing time for professional development and internal initiatives.
• Project managers and leadership: These roles typically have lower utilization rate benchmarks, ranging from 50% to 65%, as their responsibilities include oversight, strategy, and non-billable work like client relationship management.
• Administrative and support staff: Utilization rates are naturally lower, with a focus on operational efficiency rather than billable hours worked.

Too low? A utilization rate below the recommended range may indicate underlying issues such as:

• Excessive time spent on administrative tasks or non-billable work.
• Inefficient project workflows and unclear resource allocation.
• Underutilized staff who may not have enough client work to fill their available hours.
• Potential issues with business development, leading to inconsistent project pipelines.

On the flip side, too high? If your firm’s utilization rate consistently exceeds 85-90%, it could be a red flag:

• Employees may be overloaded, leading to burnout, decreased quality, and missed deadlines.
• A lack of time for training, internal development, and strategic planning, which can impact long-term growth.
• Reduced flexibility to handle unexpected client demands or new opportunities.

Striking the right balance is crucial—not just for profitability, but also for maintaining employee well-being and client satisfaction.

Common Challenges with Utilization Rates

If improving utilization rates were easy, every firm would have it figured out. But the reality is, even the most well-run A&E firms face obstacles that make optimizing utilization rates a constant struggle. Here are some of the biggest challenges firms encounter.

Lack of Visibility into Resource Availability

Without a clear picture of resource availability, it’s tough to assign the right people to the right projects. When firms don’t have real-time insight into who’s working on what, resource allocation becomes a guessing game. This can lead to employees being underutilized or stretched too thin, causing inefficiencies and missed deadlines. The lack of visibility often results in last-minute scheduling adjustments, rushed deadlines, and frustration across project teams.

Inaccurate Time Tracking

Employees juggling multiple projects, shifting priorities, and tight deadlines often struggle to track their time accurately. Some may forget to log billable hours, while others might allocate their time incorrectly, leading to skewed utilization data. Without precise tracking, firms lose insight into how resources are actually being used, making it difficult to measure performance and allocate future workloads appropriately. Inconsistent time tracking also makes it challenging to calculate the utilization rate with confidence.

Over-Reliance on Non-Billable Work

It’s easy for internal meetings, administrative tasks, and operational duties to take up more time than expected. When too many available hours are spent on non-billable work, it directly impacts revenue potential and skews utilization rates. Firms often underestimate how much non-billable work accumulates over time, creating hidden inefficiencies that reduce overall profitability. Striking the right balance between billable and non-billable work is an ongoing challenge for A&E firms.

Capacity Planning Missteps

Without proper capacity planning, firms may find themselves either overstaffed or struggling to meet demand. Poor forecasting can result in resources sitting idle, which leads to lower utilization rates, or teams being overwhelmed with too much work, which can lead to burnout and decreased quality. Many firms struggle with anticipating future demand accurately, leading to a reactive approach rather than a proactive strategy.

Employee Burnout and Workload Imbalance

When utilization rates are consistently high, it can signal potential burnout within the team. Employees may feel overwhelmed by excessive workloads, leading to fatigue, errors, and decreased productivity over time. On the other hand, low utilization rates can result in disengagement and a lack of motivation. Finding the right balance to keep employees engaged and productive without overloading them is a challenge that requires ongoing attention.

Inconsistent Utilization Across Teams

Different departments or project teams within a firm often experience varying utilization rates, making it difficult to get a cohesive understanding of overall efficiency. While some teams may be overloaded with client work, others may be underutilized due to a lack of projects that align with their skill set. This inconsistency can lead to operational inefficiencies and make it challenging to allocate resources effectively across the firm.

Understanding these challenges is the first step toward improving utilization rates and creating a more balanced, productive workforce.

9 Key Strategies to Improve Utilization Rates for Better Resource Management

Improving utilization rates is about making smart, strategic decisions that enhance efficiency, reduce waste, and improve project outcomes. Whether your firm struggles with resource allocation, time tracking, or balancing workloads, adopting the right strategies can help you achieve optimal resource utilization without compromising employee well-being.

Here are key strategies to help improve utilization rates and boost resource management efforts:

1. Track Utilization Rates Consistently

You can’t improve what you don’t measure. Regularly monitoring utilization rates allows you to identify trends, spot inefficiencies, and make timely adjustments before they become costly problems. Tracking utilization rates consistently helps firms:

• Identify patterns and trends in employee utilization to optimize future demand planning.
• Spot underutilized staff who may need additional billable work or professional development opportunities.
• Flag overworked employees, ensuring workloads are evenly distributed to avoid burnout.

By establishing clear utilization rate benchmarks and reviewing them frequently, you can maintain better control over project profitability and operational efficiency.

2. Optimize Resource Allocation

Effective resource allocation is at the heart of improving utilization rates. Ensuring that the right people are working on the right tasks at the right time is crucial to maximizing productivity.

Key steps to optimize resource allocation include:

• Aligning resources with project needs by assessing skill sets and availability in real time.
• Prioritizing billable work while maintaining a balance with necessary non-billable tasks such as training and internal initiatives.
• Using capacity utilization data to prevent bottlenecks and ensure that no resource is sitting idle.

Implementing a structured approach to resource allocation helps firms allocate available hours effectively, leading to better project outcomes and improved employee utilization rates.

3. Encourage Accurate Time Tracking

Accurate time tracking is fundamental to understanding and improving utilization rates. However, many firms struggle with incomplete or inaccurate time entries, which can distort data and lead to poor decision-making. Employees juggling multiple projects may forget to log their billable hours, while others may allocate their time incorrectly, resulting in unreliable reporting.

To combat this, firms should implement intuitive resource management software with time-tracking capabilities that integrates with existing project management systems, making it easier for employees to log time without adding unnecessary administrative burdens. Additionally, automating reminders and approvals can reduce human error and ensure consistency. Encouraging a culture where employees understand the value of tracking time accurately helps leadership gain clearer insights into utilization rates, making resource management and profitability improvements more data-driven and effective.

4. Balance Workloads Effectively

Utilization rates can quickly spiral in the wrong direction when workloads aren’t balanced properly. Too much work leads to burnout and decreased quality, while too little work can leave employees disengaged and unproductive.

To ensure balanced workloads:

• Regularly review workloads to ensure team members are neither over nor underutilized.
• Plan ahead to avoid last-minute resource reallocations that disrupt project timelines.
• Factor in employee well-being, considering vacation, training, and non-billable responsibilities when assigning tasks.

Balanced workloads contribute to optimal utilization rates while maintaining employee morale and productivity.

5. Leverage Technology for Smarter Resource Management

Modern resource management tools like Deltek Vantagepoint provide firms with the visibility and insights needed to track utilization rates and improve operational efficiency. Many firms still rely on outdated spreadsheets or manual tracking, which makes it difficult to monitor available hours, forecast workloads, and optimize staffing.

Technology streamlines these processes by automating resource planning, offering real-time insights into capacity utilization, and distinguishing between billable and non-billable time with ease. By integrating smart solutions, firms can eliminate guesswork, identify areas for improvement, and make proactive adjustments that enhance both project profitability and employee workload balance. With the right technology in place, organizations can reduce overhead costs, track the total number of hours worked more efficiently, and optimize resource allocation to maintain sustainable profit margins.

6. Improve Project Forecasting and Capacity Planning

Poor forecasting leads to utilization challenges, whether it’s having too many employees sitting idle or scrambling to find resources to meet project demand. Implementing effective capacity planning practices ensures firms can anticipate future demand and adjust resources accordingly.

Steps to enhance project forecasting include:

• Analyzing historical data to predict staffing needs and avoid under or overutilization.
• Collaborating with project managers to understand upcoming workload requirements.
• Setting realistic utilization targets based on current and anticipated project pipelines.

Capacity planning plays a critical role in keeping utilization rates within an optimal range and ensuring resource costs align with project needs.

7. Prioritize Client Work While Managing Internal Tasks

Striking the right balance between billable and non-billable work is crucial for improving utilization rates. While internal projects and administrative tasks are necessary, they should not overshadow billable hours.

Key strategies to prioritize client work include:

• Defining clear priorities to ensure billable work takes precedence without neglecting essential internal responsibilities.
• Automating repetitive tasks, such as reporting or invoicing, to free up time for client-facing work.
• Allocating specific time blocks for non-billable work to prevent it from creeping into productive hours.

By keeping a clear focus on client work, firms can improve their utilization rates while maintaining project efficiency and profitability.

8. Establish Clear Utilization Goals and Accountability

Improving utilization rates requires clear targets and accountability at every level of the organization. Without well-defined goals, utilization rates can fluctuate unpredictably, making it difficult to maintain consistent performance. Setting realistic utilization targets for both departments and individual employees ensures that expectations are clear and measurable. These targets should align with the firm’s overall business objectives, ensuring that resource allocation supports project demand while balancing billable and non-billable work.

Regular performance reviews are essential to keeping utilization goals on track. Managers should provide feedback to employees on their utilization rates, helping them understand where adjustments can be made. Additionally, tracking progress over time allows firms to identify trends, address inefficiencies, and make strategic decisions about workload distribution.

Encouraging a culture of accountability is just as important as setting the targets themselves. When employees take ownership of their billable hours and project contributions, it fosters a more engaged and productive workforce. By establishing transparent utilization goals and regularly reviewing them, firms can improve resource management, enhance operational efficiency, and ensure that workloads remain balanced across teams.

9. Address Skill Gaps and Training Needs

Sometimes, low utilization rates can be attributed to a lack of necessary skills within the workforce. When employees aren’t equipped with the right skills, they may struggle to take on available work, leading to inefficiencies.

To address this challenge:

• Invest in training programs that align employee capabilities with project demands.
• Cross-train staff to improve flexibility and resource allocation across different teams.
• Regularly assess skill gaps to ensure the workforce is evolving alongside project needs.

Upskilling employees not only helps improve utilization rates but also enhances overall team efficiency and morale.

By tracking key metrics, balancing workloads, and leveraging technology like Deltek Vantagepoint, A&E firms can optimize resource allocation, increase profitability, and create a sustainable work environment for their employees.

Why Deltek Vantagepoint is the Ideal Solution

Deltek Vantagepoint is built specifically for professional services firms, offering the tools needed to improve utilization rates and optimize resource management. It helps firms achieve better operational efficiency by providing:

• Simplified Resource Allocation – Assign the right people to the right projects with better capacity planning and accurate forecasting.
• Comprehensive Time Tracking – Capture billable hours worked and reduce non-billable time with an intuitive, easy-to-use system.
• Real-Time Actionable Insights – Monitor utilization rates with detailed reporting to identify areas for improvement and adjust resource allocation accordingly.
• Profit Margin Optimization – Balance billable work with operational needs, helping reduce resource costs and increase profitability.
• Enhanced Project Visibility – Gain a clear, centralized view of available hours, billable tasks, and overall team productivity.

With Deltek Vantagepoint, firms can make data-driven decisions to achieve optimal resource utilization, improve project outcomes, and maintain a competitive edge in the A&E industry.

Conclusion on Utilization Rate

Improving utilization rates means incorporating consistent monitoring, effective resource allocation, and leveraging technology, A&E firms can find the right balance between billable and non-billable work.

The key is to stay proactive. Regularly reviewing utilization data, addressing skill gaps, and ensuring workloads are evenly distributed will help your firm avoid common pitfalls like burnout, inefficiencies, and underutilized staff. With a thoughtful approach and the right tools in place, your firm can maintain high utilization rates while delivering high-quality work and keeping employees engaged.

Deltek Vantagepoint provides the visibility, insights, and automation your firm needs to stay ahead of utilization challenges and operate more strategically. Ready to take control of your utilization rates? Deltek Vantagepoint can help you maximize productivity without compromising quality.

Ready to learn more? Check out our ultimate guide to resource management for A&E to explore how your firm can excel.

Key Takeaways

• Utilization rates are a crucial metric for A&E firms, helping measure how effectively resources are being used.
• A good utilization rate falls between 75% and 85% for billable employees, with variations depending on roles and responsibilities.
• Common challenges, such as inaccurate time tracking, workload imbalances, and lack of resource visibility, can hinder utilization improvements.
• To improve utilization rates, firms should focus on tracking data consistently, optimizing resource allocation, balancing workloads, and leveraging technology.
• Deltek Vantagepoint offers a comprehensive solution to monitor utilization rates, track billable hours, and allocate resources efficiently.

Frequently Asked Questions