5 Ways to Improve Consultant Utilization Rates

Want to increase consultant profitability? Start by improving utilization rates. Utilization rates measure how much of a consultant's available time is spent on billable work. Boosting this metric - even slightly - can drive significant revenue growth. This guide covers five actionable strategies:

• Set Clear Utilization Goals: Tailor targets by role and seniority to balance productivity and well-being.
• Use Resource Management Tools: Automate scheduling, track capacity, and match skills to projects.
• Match the Right People to Projects: Align consultants' skills with project needs to always have the right consultant on the right project.
• Improve Time Tracking: Make sure your time tracking practices are clear to everyone. Remove extra friction.
• Build Multi-Skilled Teams: Cross-train staff to reduce downtime and increase flexibility. Encourage people to upskill in areas that are in demand.

Quick Stat: Just a 10% boost in utilization can add $150,000 in annual revenue per consultant (at $150/hour). Dive into the steps to make it happen.

1. Set Clear Utilization Goals

To tackle the challenges mentioned earlier, start by defining clear, data-driven utilization targets. These targets are essential for improving consultant productivity while ensuring workloads remain manageable.

We’re going to be a bit opinionated here and say that a good utilization target for any consultant is 100%, when working on one project at a time. We think that the best way for consultants to learn consulting work is by engaging in client projects.

Naturally, there are some internal meetings, occasional upskilling, sales work, possible recruitment activities and so on, so often it’s hard to reach a 100% utilization, but that should be the expectation.

Role-Specific Targets

We feel like setting explicit utilization targets might sometimes be harmful for your organization. Every person’s schedule looks different, and it might be another junior consultant is logging 100% utilization each week, whereas another might need to do some upskilling, and is at 90%. Overtime, utilization rates might look like this on average. However, it’s good to have a general understanding of how the calculations work.

Consultant Level	Target Range	Key Activities
Junior Consultants	80-90%	Project delivery
Senior Consultants	75-90%	Client relationships, project oversight
Practice Leaders	50-70%	Leadership, business development

To determine your company’s utilization targets, start by calculating break-even rates.

For example, if your company has 100 consultants, each with an average annual salary of $100,000, and overhead costs of $12 million per year, you need to determine how many billable hours are required to cover these costs.

Adjusting for Time Off

A typical full-time consultant works 2,000 hours per year (based on 40 hours per week for 50 weeks). However, with an extra week of paid time off (PTO) and accounting for 10 national holidays, the actual available working hours are reduced. Actual available working hours: 47 weeks × 40 hours = 1,880 hours per consultant

Cost Breakdown

The total cost to run the business includes:

• Salaries: $100,000 × 100 consultants = $10 million
• Overhead costs: $12 million
• Total costs: $22 million per year

Break-even Utilization Rate

If the company bills clients $200 per hour, the maximum possible revenue (if every hour was billable) is:

• 1,880 hours × 100 consultants × $200 = $37.6 million

To break even, the company must generate at least $22 million in revenue. That means consultants need to bill 59% of their available hours just to cover costs.

Setting a Profitable Utilization Target

For profitability, companies typically add 15-25% on top of the break-even utilization rate. This means a reasonable utilization target should be between 74% and 84%.

This will give you tools to calculate your own company’s target utilization.

Measurement Methods

Accurate tracking is key to hitting these targets. Automated systems make this process easier and more efficient. It’s a good practice to have project budgets, allocations, and time tracking data in one system for efficiency’s sake. Focus on these three metrics:

• Billable Utilization: Hours billed directly to clients.
• Client Utilization: Hours worked on client work (all not necessary billable)
• Productive Utilization: Includes both client utilization and strategic internal tasks.
• Realization Rate: The actual collected billable hours.

Preventing Burnout

High utilization goals must be balanced with employee well-being. If someone’s working 100% on a client project, they can’t be expected to work on other activities. The amount of client work should go down linearly with more internal work. Regular check-ins, such as weekly team utilization reviews and quarterly strategic assessments, can help identify burnout risks early. Burnout is often a multi-faceted issue, and is rarely not only about work, so a holistic approach should be taken to ensure that people feel great about working.

Actually, the most important thing to reduce burnout, is to have people work on exciting projects where they feel they’re able to contribute and learn. Burnout is often related to frustration at work.

2. Use Resource Management Tools

Modern resource management tools help optimize consultant utilization by building on clear utilization targets. Since professional services firms allocate around 75-85% of their costs to people resources, using software to manage these resources effectively can lead to better billable hours and smoother project delivery.

Key Software Features to Look For

The right tools should tackle common utilization challenges with features like these:

Feature	Benefit	Impact
Real-time Capacity Tracking	Avoids over- or under-allocation	18% boost in utilization by minimizing skill mismatches
Skills Database	Matches consultants to the right projects	Increases project delivery efficiency
Predictive Analytics	Enhances resource planning	Improves forecasting accuracy
Automated Scheduling	Cuts down admin tasks	Simplifies workflow management
Comparison of allocated hours and timesheet data	Identify unbilled work due to inefficiencies	Up to 90% unbilled work captured (by Operating client Inventive.io)

Integrating Tools with Existing Systems

For a smooth rollout, integration with current systems is essential. Here’s an example process on taking a new resource management tool into use.

1. Map Current Processes: Review workflows for project management, time tracking, and resource allocation to pinpoint integration needs.
2. Clean Core System Data: Standardize consultant profiles, skills categories, and project templates before migrating to avoid mismatches and inaccuracies.
3. Map the technical architecture: Figure out where the tool sits in your architecture. Often the resource allocation tool takes data in from CRM and HR tools, and is in sync with your ERP/time tracking system.
4. Phase the Rollout: Begin with a small group of experienced users and expand gradually.

How Operating's Platform Raises Utilization Rates

Operating's platform is a great example of how technology can improve resource management. You’re able to map match consultants to projects based on multiple different types of criteria:

• Certifications
• Industry expertise
• Seniority level
• Skill set
• Role

By combining this data with CRM project information, the platform provides a real-time view of resource availability and project needs.

Its automated dashboards track essential metrics, including:

• Capacity forecast
• Allocation accuracy (planned vs. actual hours)
• Predictive project burnup charts
• Skills utilization
• Variance in billable hours

This comprehensive system helps firms make smarter decisions and boost efficiency.

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3. Match the Right People to Projects

Once you've set utilization targets and adopted management tools, the next step is smart resource allocation. Aligning the right people with the right projects can improve your consultant’s satisfaction and directly boost billable hours, which is key to improving utilization rates.

Use Real-Time Data for Assignments

To make the most of your resources, rely on live data for assignments:

Data Point	Purpose & Impact
Current Workload	Avoid overloading team members
Skills Status	Match qualifications to project needs
Project Stage Progress	Assign resources at the right time

Match Skills to Project Demands

A structured system for skills matching ensures you assign the most suitable consultants to each project. This builds on the skills database discussed earlier, helping you get the most out of your management tools.

Maintain detailed consultant profiles that include:

• Technical certifications and their validity
• Levels of industry expertise
• Measurable project achievements
• Location and remote work flexibility
• Primary and secondary skills with ratings
• Scores for matching project complexity

You’re most likely maintaining something like this in a spreadsheet already, so it makes total sense to bring in to the same system where resource management is handled.

Plan Ahead to Minimize Downtime

Strategic pipeline planning keeps workloads steady and avoids gaps in assignments.

Effective planning strategies include:

• Rolling 12-week forecasts based on past data
• Availability heatmaps or timeline for better project scheduling
• "Hot lists" of consultants ready for immediate deployment
  • Operating provides this out of the box!

4. Improve Time Tracking

Once project assignments are optimized, the next step is ensuring every billable hour is accounted for through accurate time tracking. This process closes the loop on utilization by providing precise measurements of billable efforts.

Make Time Tracking Effortless

Modern tools have made it easier for consultants to track time effortlessly. Show planned hours next to the timesheet, so your people don’t have to jump between multiple systems. Use an app with intuitive UX, where tracking time becomes smooth sailing.

Link with Resource Allocation Tools

Accurate time tracking becomes even more powerful when integrated with core resource allocation platforms like Operating. It reduces the need to jump between different systems whether it’s about updating your skills & expertise, planning upcoming work, or skimming through possible future projects to work in.

Define Billable Activities

Consistent tracking also supports better resource allocation, creating a feedback loop that improves utilization over time. To ensure clarity, it's crucial to distinguish between billable and non-billable tasks.

Here’s how to streamline the process:

• Use pre-set categories to cover most of the activities.
• Opt for mobile-friendly, single-click timesheets for quick and easy entries.
• Set daily or weekly deadlines for time entry instead of requiring real-time logging. It’s a good practice to have team leads review hours weekly.

5. Build Multi-Skilled Teams

Alongside smart resource allocation, having teams with a mix of skills can improve utilization by allowing for flexible staffing. Accurate time tracking (as discussed in Section 4) becomes even more impactful when team members can take on a variety of tasks.

Mapping out team skills helps identify gaps and areas for improvement. A structured framework can assess capabilities across three main areas:

Skill Category	Assessment Criteria
Technical Skills	Months/years of experience
Functional Expertise	Knowledge of specific industries or domains
Soft Skills	Abilities like client communication and leadership
Certifications	Explicit certifications in technologies related to the prjoect

Set Up Training Programs

Training programs expand project eligibility, boosting billable opportunities. A T-shaped skills model, where team members have a deep specialty plus a range of complementary skills, is particularly effective. Companies should have a clear idea of which skill sets and competences are in demand, and encourage people with more bench time to upskill towards the skills that clients are asking for. This will have a huge impact on utilization in longer term.

Track Training Results

To measure the impact of multi-skilling, focus on metrics tied to utilization:

Metric	Target
Billable Hours Increase	+15%
Project Flexibility Rate	At least 3 project types per consultant
Inter-Project Bench Time	Less than 5 working days

To keep teams motivated, many top firms tie 30% of consultant bonuses to training completion instead of just utilization goals. This approach ensures that better matching (Section 3), precise tracking (Section 4), and multi-skilled teams work together for long-term improvements. However, this method might be better suited for large consultancies with the scale at hand, where resources are less scarce. In smaller consultancies, we advocate for hiring people, who enjoy working out of their comfort zone, and learning new skills directly in client projects.

Conclusion: Steps to Higher Utilization

Main Points

By combining the strategies discussed in Sections 1-5, you can achieve measurable improvements:

Strategy	Impact
Efficient Time Tracking	All billable hours captured
Resource Management Software	Fewer mismatched assignments
Skills-Based Project Matching	More efficient and less laborious staffing process
Role-Specific Targets	Easier to lead the business to the right direction
Cross-Training Programs	Reduction in bench time

Implementation Guide

Focus on quick wins first, then roll out changes in stages to build momentum.

Here’s a phased approach to get started:

1. First 14 Days: Map your current processes, log your current numbers (utilization rates, bench time etc.), and review system landscape
2. Days 15-30: Review possible tools in the market
3. Days 31-60: Set up resource management software (Section 2) to reduce mismatches and improve project allocation.
4. Days 61-: Fine-tune role-specific targets (Section 1) and scale cross-training initiatives (Section 5) to ensure long-term gains.

To keep improvements steady, focus on maintaining and refining these areas:

• Use time tracking metrics (Section 4) to monitor progress consistently.
• Expand the skills mapping framework (Section 5) to align talent with demand.
• Schedule quarterly reviews to keep on improving the process.