Most of us have been in a situation where there wasn’t enough work to do. We’re also aware of the impact that having too much work can have and the risks that it brings. Managing people’s capacity and workload is a careful balancing act, one that resource utilization looks to solve.
In this guide, we’ll walk through practical steps for a project manager to make the most of their team’s resources. Plus, we’ve got some fantastic templates to help you along the way.
Let’s dive in and unlock the secrets to effective resource management!
- What is Resource Utilization?
- How to Calculate Resource Utilization
- Benefits of Effective Resource Utilization
- How to Improve Resource Utilization on Your Team
- 3 Useful Resource Utilization Templates
What is Resource Utilization?
Resource utilization is a metric that project managers and leaders use to evaluate how their resources are being used within a project. It measures the utilization rate of your resources (often your people) over time to determine whether they’re being underused, overused, or used just enough.
The utilization rate measures how much of your team member’s available time is used for billable work. This metric gives you an insight into how productive your team members are, whether you’re using resources effectively, and how you can better optimize the way you work for higher productivity and profitability.
Resource utilization often gets confused with resource allocation. They’re in a similar space, but both have unique roles. Utilization focuses on how you manage and optimize all of your resources. Allocation is the science of assigning specific resources to individual projects once you’ve decided on the best way to organize them.
How to Calculate Resource Utilization
Understanding whether your resources are under or overutilized is incredibly valuable, but how do you measure resource utilization? It might sound like it’s complicated, but there’s actually a typical resource utilization formula you can use:
Resource utilization rate = Total billable hours / total available hours
This will give you a figure that you can use to compare across different resources, team members, and projects. Multiply the end result by 100 if you want to transform the number into a percentage instead.
Let’s take a look at an example of this formula in real life.
Your software developer is employed on a 40-hour-a-week full-time contract. You ask them to complete a timesheet and find that they spend 30 hours a week on billable work. Let’s apply the formula:
Resource utilization rate = 30 / 40
This gives us a resource utilization rate of 0.75, or 75%.
With the information above, it’s clear that your team member’s time isn’t being used effectively. Look to cut down on time spent in meetings, assign admin tasks to another team member, and invest in project management tools that streamline workflows. That way, their expertise can be used to complete billable tasks instead.
Let’s take a look at another example. Your digital marketing manager is employed on a 20-hour-a-week part-time contract, but they often end up working longer hours. You discover that they’re actually spending 25 hours a week on billable activities.
Resource utilization rate = 25 / 20
This team member has a utilization rate of 1.25, or 125%. This is beyond their contracted hours and puts them at risk of burnout. It’s important to reduce the hours they’re working by assigning tasks to other team members, growing your team, or making efficiency or process savings. ⚒️
Benefits of Effective Resource Utilization
It’s almost impossible to get the balance exactly right, but the best project managers strive to manage and level resources as effectively as possible. Smart resource utilization brings plenty of benefits to the whole team. Here are some of the many reasons why it’s worth investing your time and energy into.
Increased team happiness
Most of us thrive when there’s a good, steady stream of work that feels manageable but also helps us grow and challenge ourselves. Having too much work is a route toward burnout and unhappiness while having too little can make us bored and unhappy.
Effective project managers aim to optimize resource management so their team members stay happy. They know that overutilization and going over-scheduled working times should be avoided, and they make an effort to proactively manage utilization to improve employee happiness, morale, and satisfaction. 🤩
Higher productivity levels
In almost every organization, there’ll be resources that aren’t being used to their fullest. Understanding your resource utilization rate gives you a chance to identify underutilization and make changes to raise productivity levels.
With the right tools, formulas, and plans, you can check resource utilization regularly and quickly adapt to make the best use of your project team. Distribute more work to team members whose schedules aren’t full, and look to allocate tasks away from those that are at risk of becoming unproductive from overutilization. 📈
Greater control over projects
Project management involves lots of moving parts, and understanding how your resources are being used is just one of them. An effective resource utilization plan makes capacity planning easier and gives you greater insight and control over your projects.
If you don’t know what your team members are working on or how productive they are, it’s hard to stay in control. Avoid going over your billed hours for clients, assigning team members at the last minute, and paying extra to hire additional resources by carefully managing your resource use. 👀
Better management of individual resources
Whether you’re working with a big project team or a small one, it’s hard to check in with everyone all the time to understand their capacity in real-time. Having a tool that makes resource utilization easier gives you a better way to understand every individual’s time on an ongoing basis.
With a plan, formula, or tool that gives you an overview of available resources and their effectiveness, you can make more strategic decisions on an individual level. Check-in with team members to make sure their workload is manageable, approach resource allocation in a fairer way, and understand your team’s time both in general and on a more detailed level. ✨
Adopting the practice of effective resource utilization doesn’t just make people happier; it can make you more money too. By working on productivity levels and streamlining workflows, you can also enjoy higher profitability.
Managing your resources more effectively has a direct impact on your bottom line. A good utilization rate ensures you aren’t spending longer on client projects than expected, which can impact profitability. Happier, more engaged team members also do better work—which means you can command higher rates for the best product or service. 💰
How to Improve Resource Utilization on Your Team
Effective resource allocation brings lots of benefits, but how do you make that happen inside your own project team? Here’s how to improve resource utilization and enjoy the upside within your team.
1. Understand every team member’s availability
Using your resources more effectively starts by getting to know your resources in more detail. Make sure you’re clear on your team members’ working hours and working patterns so you have the right information available as you assign resources to your projects.
Use a tool like ClickUp to store all your data and see your resource availability in real-time. Use the workload management view to get a view of your team members’ available workload, so you can make smarter decisions when it comes to assigning tasks, roles, and responsibilities. 📄
2. Use the formula to determine your team’s utilization of resources
You can’t make efficiency savings if you don’t know where you’re starting from. Before you can begin optimizing, try calculating resource utilization in your current state.
Take the formula above and use it to calculate the utilization rate for everyone on your project team. This will give you a useful metric to use as you make improvements, so you can understand the impact of your changes and whether they’re shifting your utilization rate in the right direction. 🙌
3. Assign the right resources to projects
Once you know what your utilization rate is, you can use this to inform which resources you allocate to which projects. This metric makes project planning and resource scheduling easier, as you can make strategic decisions based on workload and capacity.
Assigning the right resources isn’t only about who has time available. It’s also about skill sets, compatibility, and expertise. The best project managers know how to balance every need to build a strong project team. ✨
4. Assign hours as billable or non-billable
Understanding the difference between billable tasks and non-billable activities means you can make smarter decisions about how to use your resources. If there are too many non-billable hours, your project team doesn’t have time to work on billable projects that earn a fee.
Consider all the tasks your team members work on and assign them as either billable utilization or non-billable activities. Determine whether the balance is right or whether you need to assign non-billable tasks away to another team member to free up valuable time. ClickUp Custom Fields make it easy to categorize tasks so you can quickly see how your team members are spending their time. 📚
5. Use time tracking
You can’t understand what your team members are working on without accurate timesheets that are updated on a regular basis. Introduce a system where your team members complete weekly timesheets so you can get a realistic view of how time is spent on any given project.
ClickUp has plenty of time management templates and features that make tracking your team members’ time easy. The Services Timesheet Template by ClickUp is ideal for keeping track of service hours or billable time. There’s also a built-in time tracker that you can use from desktop, web, or mobile devices—allowing you to add time to projects wherever your team members are. 👀
6. Compare expected and actual billed hours
Even the best-managed projects can run into roadblocks and resource constraints, causing the actual total billable hours to be different from what you expected. Track resource utilization throughout the project and evaluate it at the end to see how close to your estimate you were.
Measuring your expected vs. actual billed hours gives you a greater insight into how you’re managing resources. If it’s close, you’re on the right track. If you’ve gone over, maybe it’s time to monitor utilization more closely throughout the project to avoid scope creep. If it’s below expected, there may be more you could have done to deliver work for the client. All of this is useful information to take with you into future projects. 🌻
Manage resources with a resource calendar!
7. Use tools and templates for optimal resource utilization
Knowing that you should measure your utilization rate and assign resources strategically makes sense, but you need the right resource management tools to make it happen. Invest in resource management software that streamlines the process, uses automation for repetitive tasks, and gives you more control over your resources.
ClickUp is filled with features and templates to make your resource utilization more effective. Our resource management features go beyond basic spreadsheets and databases—giving you a digital hub for all your resource needs.
See and track company assets at a glance across multiple view types like lists, boards, and timelines. Use the built-in time tracker to add entries, set estimates, and use these to make smarter time allocations. ClickUp combines time tracking, asset management, and smart dashboards to bring you a better project management experience. ✨
3 Useful Resource Utilization Templates
Starting from scratch can feel overwhelming—especially if this is your first venture into the world of strategic resource utilization. Luckily, ClickUp has a collection of resource planning templates designed to make your role easier.
1. ClickUp Resource Planning Template
The Resource Planning Template by ClickUp gives you an easy way to see and allocate resources across your project team or department. Use the Workload view to understand every team member’s capacity, then allocate resources by making changes directly in the resource plan.
2. ClickUp Project Resource Matrix Template
Enjoy an easier way to understand the total costs of your project with the Project Resource Matrix Template by ClickUp. This template uses custom fields like department, resource type, days, and rate so you can determine the cost, prepare accurate budgets, and allocate resources more effectively.
3. ClickUp Resource Management People Template
Presented here in a timeline format, this Resource Management People Template by ClickUp is a great way to oversee your team members’ time, availability, and utilization. See their capacity, project type, and what tasks they’re working on from one central place.
Improve Your Resource Utilization With ClickUp
Managing your resources effectively makes perfect sense. Not only does proper resource utilization lead to higher productivity, but it has an impact on employee happiness and your bottom line.
Use the steps above to improve resource utilization within your team or across the entire organization. Make the whole process easier and build a dedicated hub for all your project management needs with ClickUp. Sign up for a free ClickUp account today and enjoy a better way to manage your new projects. 🤩