Utilization Basis Hours, Yield and Capacity

Additional Resources

The Topic of the Day: Utilization webinar is a great resource to learn about managing and measuring resource utilization with Projector. (go to 14:21)

Utilization Basis Hours

One of the key ideas of a utilization report is called Utilization Basis Hours (UBH). UBH is a fancy way of saying these are the number of hours I expect my employees to work. So if an employee has a 40 hour work-week then their UBH would be 40. Things like holidays and time off can affect this number. Once you know how many hours you expect your resources to work you can start calculating how effectively they are utilized. For example if a resource worked 20 hours for a 40 hour work week then you know they were only half used. See the Permissions and Settings section below to learn more about how your UBH is calculated.

Full Time Equivalents

Full Time Equivalents (FTE's) are a unique concept to utilization reports. FTE is a means of measuring on a person basis as opposed to an hours basis. To learn more about FTE's and how they can help your organization please see the Measuring Utilization how-to.

Yield vs. Capacity

Another key idea of utilization reports is the calculation method, Yield or Capacity. If you are running a report it is very important to understand which of the two you are using and why. Yield shows you how much you are getting out of your workforce compared to what you pay them. Capacity shows you how much you are getting out of your workforce compared to what they can do. The simplest comparison between the two is someone you reimburse hourly. An hourly person only gets paid when they work. So their yield is always 100%. Doesn't matter if they work zero hours, one hour, or a hundred hours in a week. Capacity shows how much you are getting vs. what they could be doing. If that hourly employee only works one hour, then there are 39 more hours in the week they could have worked. They are 1/40 utilized. The two methods answer very different questions.

The chart below explains these two concepts.

Calculation Method

Description

Yield Management

How much work are you getting out of your delivery organization as compared to what you are paying for? If a user worked many hours, but generated very little revenue then they have a low yield. The calculation is based upon how resources are compensated.

Salaried Workers - When used less than their UBH hours then they are underutilized and yield is < 100%. When used more than their UBH hours then they are overutilized and yield is > 100%.
Salaried Workers with Overtime - Like salaried, when used less than their UBH hours then they are underutilized and yield is < 100%. When working more than their UBH hours the yield stops at 100% because you are paying them for that work.
Hourly Workers - The yield of hourly workers is always 100% because they only work on an as-needed basis.

In this example there is a resource for each compensation type. There are then three columns that represent weeks where the workers worked less than their UBH hours, more than their UBH hours and exactly the number of hours expected. The orange rows are the yield for each worker by week.

Notice that the numbers for each column may change depending on worker type.

Capacity Management

How much work are you getting out of your delivery organization as compared to what the full potential is? If you have many employees who are available, but not working, then you are running under capacity.

Unlike with yield management, how your workers are compensated does not affect capacity. When a resource works less than their UBH hours per week they are under capacity. When working more than their UBH hours per week they are over capacity.

In this example there is a resource for each compensation type. There are then three columns that represent weeks where the workers worked less than their UBH hours, more than their UBH hours and exactly the number of hours expected. The orange rows are the capacity for each worker by week.

Notice that the numbers are exactly the same for each column regardless of compensation type.