Harvest
Time Tracking
Sign up free

Utilization Rate Calculator for Engineering Firms

Engineering firms can lose up to 25% in project profitability due to poor utilization tracking. Harvest offers precise time tracking to maximize efficiency.

Try Harvest Free

How much revenue is your team leaving on the table?

Most agencies run at 55-60% utilization. Even a small improvement means significant revenue. See what closing the gap looks like for your team.

Number of people who track billable time
$
Blended rate across roles (junior, senior, lead)
55%
Percentage of total hours that are billable. Industry average is 55-60%.
75%
A realistic target for service businesses is 70-80%.
Monthly revenue gap $0
Revenue at current utilization $0/mo
Revenue at target utilization $0/mo
Extra billable hours needed per person/day 0h
Annual revenue opportunity $0

Start tracking team utilization

Walk through the entire flow below. Start a timer, check your reports, and create a real invoice — all in three clicks.

Go ahead — start tracking!

One click and you're timing. Try it right here: start a timer, add an entry, edit the details. This is exactly how it feels in Harvest.

  • One-click timer from browser, desktop & mobile
  • Works inside Jira, Asana, Trello, GitHub & 50+ tools
  • Duration or start/end — your call
  • Day, week & calendar views to stay on top of it all
  • Friendly reminders so no hour gets left behind
Acme Corp
Website Redesign
Homepage layout revisions
1:24:09
Content Strategy
Blog calendar planning
1:30:00
SEO Audit
Technical audit report
0:45:00
Brand Guidelines
Color system documentation
2:15:00
Logo Concepts
Initial sketches round 1
1:00:00
Today's total 6:54:09

Understanding Utilization: The Core Metric for Engineering Firm Success

Utilization rate is a pivotal metric for engineering firms, indicating the percentage of employee time spent on billable tasks. Calculated using the formula: (Billable Hours ÷ Total Available Hours) × 100, it reflects operational efficiency and profitability. For instance, an engineer billing 32 out of 40 hours has an 80% utilization rate. This metric is not just a number; it’s a reflection of how effectively a firm leverages its workforce for revenue generation.

Understanding the difference between billable and non-billable hours is essential. Billable hours are those that can be charged to clients, including project work and client meetings, while non-billable hours cover internal meetings, training, and administrative tasks. Harvest excels in tracking both, offering flexible rates per project or person, ensuring accurate utilization assessments.

Benchmarking Your Firm: What's a "Good" Utilization Rate?

Determining a "good" utilization rate is crucial for engineering firms aiming for operational excellence. Industry benchmarks suggest that a healthy utilization rate for A&E firms ranges between 75% and 85%. Top performers can reach up to 94%, but sustaining rates above 90% may lead to burnout and reduced work quality. Conversely, rates consistently below 70% highlight underutilization and potential revenue loss.

Role-specific benchmarks also exist, with technical staff like architects and engineers ideally achieving 75-85%, while principals might target 40-60% due to their involvement in non-billable tasks like business development. Setting realistic targets aligned with firm objectives helps maintain a balanced workload and optimize productivity across roles.

Beyond the Numbers: Related Metrics for Holistic Firm Health

While utilization rate provides valuable insights, it should be analyzed alongside other metrics for a holistic view of firm health. The realization rate, which measures how much of the billed time is invoiced and collected, complements utilization in understanding revenue efficiency. Additionally, the net multiplier and total payroll multiplier indicate how labor costs translate into revenue.

Integrating these metrics with Harvest’s detailed reports allows firms to track time, expenses, and budgets comprehensively. This integrated approach not only clarifies financial health but also guides strategic decisions in resource allocation, project management, and client satisfaction.

Strategies for Optimizing Utilization and Maximizing Profitability

Improving utilization rates involves strategic actions in time tracking, resource management, and process optimization. Accurate, consistent time tracking is foundational; tools like Harvest offer one-click timers and manual entries to ensure comprehensive data collection. Regular analysis of utilization rates helps identify trends and areas needing improvement.

Firms should streamline non-billable work by automating repetitive tasks and optimizing resource allocation to balance workloads effectively. Proactive planning and forecasting, using tools like Harvest, enable firms to map projects against available hours, ensuring the right resources are on the right tasks. Building in "necessary slack" for unexpected tasks and training is also crucial for maintaining sustainable utilization levels.

Track Utilization with Harvest

See how Harvest calculates utilization rates for engineering firms, tracking billable hours to optimize team efficiency.

Screenshot of Harvest utilization rate calculator for engineering firms

Utilization Rate Calculator for Engineering Firms FAQs

  • Utilization rate in engineering firms is the percentage of work time spent on billable tasks. It's calculated as (Billable Hours ÷ Total Available Hours) × 100. This metric is critical for assessing operational efficiency and profitability.

  • The utilization rate is calculated by dividing billable hours by total available hours, then multiplying by 100. For example, if an engineer bills 32 hours in a 40-hour week, their utilization rate is 80%.

  • Engineering firms typically target utilization rates between 75% and 85%. Top performers may reach 94%, but rates above 90% can risk burnout. Sustained rates below 70% often indicate underutilization.

  • Firms can improve utilization by tracking time accurately, optimizing resource allocation, and streamlining non-billable tasks. Tools like Harvest help with effective time tracking and data analysis for better resource management.

  • Billable hours are those that can be charged to clients, such as project work, while non-billable hours include internal meetings and administrative tasks. Harvest helps track both types to understand utilization better.

  • Harvest allows you to track both billable and non-billable hours with flexible rates, providing detailed insights into your team's utilization and helping optimize project profitability.

  • In addition to utilization, track realization rate, net multiplier, and total payroll multiplier for a comprehensive view of firm health. These metrics help assess revenue efficiency and labor cost conversion.