Labor Utilization
What it measures
Labor utilization is the percentage of your team’s available work hours that are booked, scheduled, or assigned to revenue-generating activity. It tells you how full the schedule is.
Labor Utilization % = Hours Booked or Scheduled ÷ Total Available Hours × 100“Available Hours” is everyone’s working hours combined. If you have five people working 40 hours each, available is 200 hours. If 170 of those are booked on jobs, utilization is 85%.
Why it matters
Utilization tells you whether your team has enough work to do. It doesn’t tell you whether they’re doing it productively (that’s a separate measure, labor efficiency).
The diagnostic signal:
- High utilization (85%+) sustained means you’re at or near capacity. Adding more sales without adding more capacity creates wait lists, not revenue.
- Low utilization (under 60%) sustained means you have a sales problem. You’re paying for capacity you’re not using.
- Volatile utilization swinging between extremes usually means a scheduling or sales-cycle problem.
Healthy sustained utilization is usually 75-85%. Above that and burnout risk creeps in, plus you have no buffer for surprises. Below that and you’re paying for capacity that’s not producing.
Want help putting this number to work in your business? That’s exactly the kind of thing we set up together in coaching.