What Is a Good Employee Occupation Rate?
The occupation rate is a KPIs of resource planning essential. Often Confused with the billable utilization rate, it brings more comprehensiveness to track your performance.
But then, what is a good occupation rate target ? Discover its importance within your project planning and ways to optimize your workloads for optimal productivity.
What Is The Occupation Rate?
Definition
An employee's occupation rate represents their total activity over a defined period of time. The occupation rate therefore takes into account both:
- projects for clients (or billable),
- internal projects (training, process optimization, etc.),
- the time spent on management.
This indicator makes it possible to see the real workload of an employee, in order to better understand the problems of time and workload management.
Occupation rate, utilization rate: what differs?
The utilization rate (or billable utilization rate) differs from the occupation rate because it only takes into account the percentage of time spent on billable projects – excluding holidays, holidays or sick leave.
The billable utilization rate is particularly useful for reporting on an employee's productivity, and indirectly, their ability to generate profit.
Occupation Rate's Challenges in Workload Planning
If the billable utilization rate is an excellent KPI to study to optimize your profitability, it is not enough to guide your decisions Planning resource planning.
Leaning towards a realistic planning
Rely solely on the Rate of resource planning represents a risk, because it does not take into account certain hidden working hours, which the occupation rate takes into account.
Let's take the example of a collaborator named Anne.
- Sound utilization rate current on client projects is 75%.
- The remaining 25% is spent on administrative tasks – such as filling out a task tracking table, answering emails, preparing a report.
- If you don't have visibility into Anne's overall occupation rate, you may increase her billable utilization rate 100%. Thus, 125% of their time will be charged, and this 25% overload can not only lead to delays, but also to a risk of burnout.
If the optimization of the billable utilization rate of your employees is essential for your profitability, the occupation rate gives you the visibility you need to balance and optimize the workload.
An impact on employee engagement
An overload of work can lead to burnout and unhappiness for your employees. But conversely, an occupation rate that is too low can lead to bore-out. In the long term, your talents are then likely to be less involved, impacting their professional projects, your efficiency, and probably also your retention.
The risk of disengagement and disinterest of your employees in their missions is a real issue. It is likely to appear in particular in the event of a minimal occupation rate, or a poor distribution between the time spent on internal and administrative tasks and customer projects. Similarly, a mobilization focused on projects that are too similar could impact your employees.
Financial stakes
The financial issue related to the occupation rate mentioned earlier concerns your profitability.
Whether there is billable work or not, your employees' salaries are fixed.
It is your responsibility to be able to provision the billable load of your consultants. Think about optimizing your commercial low periods ! Plan to spend this time on internal projects or training to gain skills. This way, you invest this time for future projects, with greater potential.
Your profitability can also be impacted by poor management of load targets. Aim for a billable utilization rate 100% is not realistic, because in project management, administrative time is necessarily devoted to monitoring missions, reporting, or validating deliverables. Late deliveries, or simply a drop in the quality of service, have a heavy impact on trust
What Is an Optimal Occupation Rate?
While the answer may vary in the case of the billable utilization rate, when it comes to the occupation rate, there is only one right answer: it must be at 100%. No more, no less.
It can happen to have an occupation rate of less than 100%. This means that the employee is not staffed enough on customer projects, and that internally, nothing has been put in place to fill this gap. This shows a lack of anticipation and insufficient allocation of resources.
To avoid this situation and Optimize your resource planning, you need to have all the visibility you need to predict short- and long-term resource needs. The view of the next few months is decisive in helping you to arbitrate on current sales actions and internal projects.
Stafiz allows you to track both your occupation rates and the billable utilization rate.
The challenge then turns to the distribution between the total charge and the billable charge, or the billable utilization rate in relation to the occupation rate.
Here, practices differ, particularly depending on the company, their professional fields, but also the level of seniority of the profiles concerned.
Measuring the activity as a whole allows us to understand the real capacity of employees. This way, you can identify the remaining capacity. Your goal is to use it as much as possible on billable projects.
While we are trying to achieve a 100% occupation rate, it is ultimately the billable utilization rate that we want to optimize.
Earn 5% billable utilization rate is calculated directly on profitability. In terms of occupation rate, a 5% increase has no ROI, or at least, not directly. It is therefore essential to equip yourself with a resource planning capable of studying both of these KPIs.
How To Optimize Workload Through The Occupation Rate?
As mentioned, optimizing your expenses is only possible by having a view of your employees' availability, in order to know who is available when, and for what period. This way, you get the current and future charging percentage. To obtain reliable data, make sure that your planning software offers a time management module.
Time tracking with Stafiz
Your employees enter their time quickly and intuitively. The data updates the progress and forecast to facilitate your management.
The occupation rate helps to plan the billable load in advance. By having a global and accurate view of the occupation rate, it is easier to improve the billable utilization rate of your employees. For companies that sell projects, the resource planning is largely responsible for the profitability of projects.
Thus, your workload planning must be able to take into account:
- customer projects,
- the burden on internal projects,
- management time,
- training,
- commercial activity,
- administrative tasks.
Management plays a key role. It must take a step back: arbitration by seniority or role makes it possible to segment employees and establish rules and the objectives of utilization rate. This establishes a real capacity that allows foranticipating the resource planning of customer projects.
You also need to be able to measure occupancy in reality to compare actual output to what had been initially planned. These discrepancies are difficult to identify without a resource planning dedicated. While load tracking on Excel may be fine for a small team, this method is not scalable and the lack of automation will eventually limit your growth.
Occupation rate is therefore a key indicator of resource management. It complements the billable utilization rate by providing a more exhaustive visibility of the workload of employees. In this way, the billable charge can be anticipated and optimized.
These two KPIs are at the heart of the business of project sales and professional services. Your profitability is intrinsically linked to this. This is why it is in your best interest to invest in a project management tool as soon as possible who places the resource planning at the centre of planning.
Stafiz is aimed at consulting firms, agencies, IT Services or integrators and facilitates your daily project management.
