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Professional Services- Employee Utilization benchmarks

Gathering data on employee utilization (percentage of billable hours) benchmarks. Can you please share?

Answers

Topic Expert
Keith Perry
Title: Consulting CFO and Business Operations A..
Company: Growth Accelerator
(Consulting CFO and Business Operations Advisor, Growth Accelerator) |

*Depends* in really big letters. Once the organization is scaled, you've probably got a good deal flow going (if not, normalize for that). Admin time, training time, management time, development time...

Pushing past 85% for a fully billable person is probably unmanageable. I've generally used that as my target (both to get to and to budget non-billable time).

You should be able to run your model and understand what your minimum / break even. Tying comp to billable can help with that, and motivate billable focus. If you're running below 60%, you've probably either got ungainly admin or have overhired.

That's all in a vacuum.

Patrick Fleck
Title: CFO
Company: AnswerLab, LLC
(CFO, AnswerLab, LLC) |

You also need to keep a sharp eye on the ratio of non-billable to billable people, both on a total company basis and exclusively within your consulting group. People can get very creative in their justifications for creating managerial and other supporting overhead positions. Why? Because they get tired of doing client work. It's human nature, so you have to set standards for controlling it.

Len Green
Title: Performance Improvement Consultant and E..
Company: Haygarth Consulting LLC
LinkedIn Profile
(Performance Improvement Consultant and ERP Strategist, Haygarth Consulting LLC) |

Allied to utilization is realization: a billable person's actual average billing rate compared to their standard rate. This indicates to what extent margins are affected by billing discounts. You can also look at this across different consultant categories, customers etc.

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