I’ve received this question from several civil engineering professionals recently. If you’re not familiar with the terms “percent billable” or “utilization rate,” they are typically relevant to consulting engineers or other professional services fields, and they indicate how much of your time is spent on work that is billed to a client project.
For example, in one week, if you spend 30 hours working on a client project, and 10 hours working on a proposal for a project you are trying to win, your percent billable is 30/40, or 75 percent. Some firms refer to this number as a realization rate.
If you are trying to determine what your utilization rate should be, I recommend that you take the following steps. I will qualify these steps by saying that there are many variables that can dictate desired utilization rates, including company size, type of project, client type, years of experience, roles and responsibilities, etc.
In most cases, this should be the one and only step you have to take to figure out this all-important number. Assuming your manager has never spoken to you about this metric before, approach him or her and explain that you want to ensure your work is productive and that you are contributing to the bottom line of the firm. To that end, you’d like some guidance on what utilization rate you should be aiming for on a weekly basis. Most companies have billable goals for employees based on experience level or title. Others handle it based on specific responsibilities for individuals. Some, believe it or not, don’t have billable goals at all. Hopefully, your manager will provide you that rate, and then you can focus on achieving it. If they can’t give you a number because they don’t have a goal for you, proceed to step two.
2. Ask a Colleague Who Works for a Similar Firm
If your manager (and company overall) doesn’t have a billable goal for you, you’ll need to look elsewhere. I recommend asking a colleague of a similar experience level in a firm that offers services similar to your firm’s. This will at least give you a rough idea of where you should be at this point in your career.
3. Assume a Higher Rate the Younger You Are
If you can’t find hard data on what your utilization rate should be, make assumptions based on online research or conversations you’ve had on the topic. The younger you are, the higher your utilization rate should be since you are working more on design and technical project work, whereas, during your growth, your responsibilities may expand to management and business development. For a young consulting engineer out of school, your utilization rate should be in the nineties consistently.
No matter how you arrive at a desired utilization rate, make sure that you measure yours on a weekly or monthly basis, and if you’re not hitting your goal, make adjustments. This is an important metric that your company will be considering in your annual performance reviews.
Anthony Fasano, P.E., M.ASCE, is the founder of the Engineering Management Institute (previously known as the Engineering Career Coach), which has helped thousands of engineers develop their business and leadership skills. He hosts the Civil Engineering Podcast and he is the author of a bestselling book for engineers, Engineer Your Own Success. You can download a free video series on his website that will give you the tools needed to immediately improve your networking and communication skills by clicking here.
He has also recently started the Engineering Management Accelerator to help engineers become more effective managers: www.EngineerToManager.com.