How to Calculate Resource Utilization for a Project

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Your most important resource when managing a project is your team. They need tools, equipment, materials and more to get the job done, of course. But without people who have the skills and experience to use those tools and materials, your project isn’t going anywhere.

Therefore, those who are tasked with managing a project and delivering it successfully must know how to keep their teams productive. One of the most important aspects of that is properly planning their work, and making sure they have the time and capacity to do what they’re asked to complete.

In other words, project managers must hone the crucial skill of resource management. Your resources are more than just the team, naturally, and every resource plays a part in a project that moves forward without obstruction. When you’re specifically talking about your team’s time, though, then you’re dealing with resource utilization.

What Is Resource Utilization?

Resource utilization is how project managers find out how much capacity their team has over a period of time, and ascertain which of their resources are under or over-utilized. It gives managers a window into how many hours their team is spending on the project. Resource utilization differs from resource allocation, and that difference is important to understand.

Resource allocation is how a project manager picks his team for the project, and manages them throughout that project. This includes any reassignments and changes to their workload as needs arise.

However, resource utilization is more strategic, in that it measures how effective your resources are. So, you organize your project with resource allocation, and then drive its success with resource utilization. Both processes work hand in hand, so it’s critical that you have a resource tool that can help you measure effectiveness.

Why Is Resource Utilization Important?

It should be clear why resource utilization is critical to running a project, but it doesn’t hurt to get deeper into the benefits of such a process. For one, utilizing your resources is key to staying productive in your project. If your team is overburdened, they’re not going to perform at their optimum level.

Resource utilization also provides visibility into your project. The more transparency and the better you monitor your project, you’ll be less likely to miss important steps, and you’ll be more likely to catch risks before they develop into problems that could sidetrack you.

All of this means that you’re going to get more bang for your buck—or in business terms, ROI. If you’re making sure your resources are not overtaxed or not being used, then you’re going to work more efficiently, which impacts your bottom line.

Finally, the process of resource utilization gives project managers the tools to work more agilely. They have the flexibility to reschedule their resources fast, which means they can avoid problems or untangle themselves from issues quickly. It keeps the project on track.

How to Calculate Resource Utilization

There are many formulas that calculate resource utilization. One of the simplest is:

Resource utilization = busy time / available time

This will give you a value that can be then changed to a percentage of how much of your team’s time is spent working.

But even this simple formula can get complicated as you begin to question the figures to use in the equation. For example, are you using actual working time from timesheets, or what you planned the working time to be prior to execution?

Two more variables are holidays and whatever paid time off your team has. Therefore, you should consider how often you need to track your team’s utilization. Depending on your project, you might want to do so more regularly.

There’s also something called full-time equivalent (FTE), which is also a means to figure out the available work hours of your team. Basically, it’s the hours worked by one full-time team member. FTE converts the hours of part-time workers into that of a full-time worker.

This helps you determine how well your resources are used. You come up with that figure by dividing the planned hours by the total workable hours in the project. Multiply that by 100, and you have a percentage to find out how effective your resource is working. You want to see about 80 percent, for less than that is under-utilized and more leads to burn out.

Resource Utilization Tips

There are some more things to think about when working on resource utilization. For one, if you’re managing a program or portfolio, resource utilization works to see all these projects on a holistic level. In other words, you can leverage the visibility of your resources to improve performance over all your projects rather than just one.

One thing to stay alert about is scope creep. As you put time and effort into managing your resources, you don’t want to neglect schedule and budgets. It’s best to have a resource management tool that gives you a centralized location by which to see all your projects, tasks and resources, so you can make more informed decisions.

Being able to adjust your team’s workload is essential to good resource utilization. Therefore, it’s crucial that you have a way to measure your actual progress with that of your plan. The only way to know if you’re proceeding according to schedule is by having a baseline, and then repeatedly comparing your current project metrics to that set number.

Another tip, which is one that goes for all project management, is the old Boy Scout’s code: be prepared. Always have a contingency plan in place for when unexpected changes occur. For that matter, have a well-thought-out risk assessment in order to anticipate potential problems, and cut them off before they negatively impact your project.

How ProjectManager.com Calculates Resource Utilization for You

Using different equations to calculate your resource utilization takes time. Wouldn’t it be great if there was a tool that automatically made those calculations, so you don’t have to? ProjectManager.com is an award-winning project management software that does just that.

We have a full suite of project management tools that are integrated to work together, sharing data and keeping you from having to jump to different programs to manage your project. One essential feature is our resource management software that allocates resources and lets you track their costs, while giving visibility to the availability of your team. You can even balance their workload, all from one tool.

Real-Time Data

Here’s how it works. Because our software is cloud-based, all your data is up to date, helping you make decisions with real-time information. You can always see who’s working on what with our team management page. There, you get a list of team members with details on their tasks, due dates and their progress.

Before you can know who’s doing what, so you can assign them tasks, you need to map out their availability. You can set this up on the team management page, which allows you to determine your team’s working days, holidays and paid time off. This can be done if your team is on site or distributed anywhere in the world, with our global holidays feature.

A screenshot of the calendar pop-up in the software, where you schedule work days, holidays and paid time off
Block out your calendar to know when teams are available to work.

Online Gantt Chart

Once you’ve blocked out your team’s availability you can allocate them resources on the online Gantt chart. From this project view you can also assign team members tasks by seeing how many hours they have to do their job. Note whether they’re over or under allocated. Even get estimates on resource costs.

A screenshot of the Gantt chart, showing resource management features
Use our online Gantt chart project view to plan your resource costs.

Robust Resource Management Features

The bread and butter of our resource utilization software is the workload page. Here, you get a color-coded chart of every team member’s workload and whether they have too many or too few tasks assigned to them. No resource utilization equations necessary. Best of all, if you want to balance their workload to add productivity and avoid burnout, just reallocate right from the workload page. Don’t worry if you’re managing many teams, you can filter the page by project, team or date.

A screenshot of the workload management page with color-coded charts
See how many tasks your team is working on and balance their workload for greater productivity.

There’s so much more that ProjectManager.com can do to add efficiencies to your project. We have timesheets that automatically update as teams work on tasks. You can track their hours. There’s also a real-time dashboard for high-level views of progress and one-click reporting to get deeper into the data. Plan, monitor and report with one tool. See how it can help you become more productive by taking this free 30-day trial today.

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