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What Is a Good Utilization Rate

Harvest helps teams and freelancers achieve optimal utilization rates by tracking billable and non-billable hours accurately, improving resource efficiency.

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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 Rates Across Industries

A good utilization rate varies significantly across industries, serving as a critical performance indicator for resource efficiency. In professional services like consulting or law, a utilization rate of 80-85% is often considered optimal, balancing profitability with employee well-being. In contrast, manufacturing industries aim for a capacity utilization rate of 85% to maximize production efficiency while maintaining quality standards. Understanding these benchmarks helps businesses evaluate their resource effectiveness in context.

Utilization rate is defined as the percentage of an employee’s total working hours spent on billable work. This metric is crucial in industries where time directly translates to revenue. For instance, in the IT sector, a 75% utilization rate might be suitable due to the need for innovation and development time. Variations in these benchmarks highlight the importance of industry-specific strategies when assessing utilization.

Calculating Employee Utilization Rates

Calculating employee utilization rate involves dividing the total billable hours by the total available working hours and multiplying by 100 to get a percentage. For example, if an employee works 160 hours in a month and 120 of those are billable, the utilization rate would be 75%. This calculation is straightforward with Harvest, which allows teams to track billable vs. non-billable hours accurately, ensuring precise utilization rates.

Harvest simplifies this process with its one-click timers and detailed reports, enabling users to quickly identify how time is allocated across projects. This capability is essential for businesses striving to improve efficiency and identify areas for productivity gains. By using Harvest, companies can easily monitor and adjust their utilization rates to align with industry standards.

Factors Influencing Utilization Rates

Several factors influence utilization rates, making it essential for businesses to continuously monitor and adjust their strategies. Employee skill sets, project complexity, and organizational structure all play roles in determining effective utilization. For example, a highly skilled team may achieve a higher utilization rate due to their ability to handle complex tasks efficiently.

Harvest supports this adaptability by providing detailed insights into team utilization. With comprehensive reports on time, expenses, and budgets, managers can quickly identify underutilized resources and adjust workloads accordingly. This ensures that teams are not only meeting industry benchmarks but also maximizing their potential through informed decision-making.

Utilization Rate Tracking with Harvest

See how Harvest tracks billable and non-billable hours to optimize utilization rates, helping teams meet industry benchmarks efficiently.

Harvest dashboard displaying utilization rate tracking.

What Is a Good Utilization Rate FAQs

  • A good utilization rate for employees typically ranges from 80-85% in professional services, balancing productivity with employee well-being. In other industries, like IT, a 75% rate can be appropriate, reflecting the balance between innovation and billable work.

  • Utilization rates are calculated by dividing the total billable hours by the total available working hours, then multiplying by 100. For example, if an employee works 160 hours in a month with 120 billable, the rate is 75%.

  • Utilization rates are influenced by factors such as employee skills, project complexity, and organizational structure. Efficient time tracking tools like Harvest can help optimize these rates by providing accurate data insights.

  • Harvest aids in achieving optimal utilization rates by accurately tracking billable and non-billable hours. This helps teams identify productivity gaps and improve resource efficiency through detailed reporting.

  • In professional services, a utilization rate of 80-85% is often considered optimal. This benchmark ensures high productivity while maintaining quality and avoiding burnout.

  • Billable hours directly impact utilization rates as they reflect productivity. Non-billable hours, while necessary for tasks like training, should be minimized to maintain a high utilization rate. Harvest helps differentiate and track these hours effectively.

  • Harvest plays a crucial role by offering tools to track both billable and non-billable hours with precision. This supports accurate calculation of utilization rates, helping businesses meet their performance targets.