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Deloitte and Booz Allen both do. If you understand how we make money as a business, it makes sense. Companies can’t pay you money they don’t have, and utilization tracks the revenue you personally are bringing in via your billable hours.
No, I agree that what it is measuring is revenue per employee which is fine, but if I just take longer on my tasks then I hit my utilization target, but we don’t get more tasks done. There isn’t a perfect way to go about it, but to me right now in a slow season, it seems beneficial to not be efficient
Chief
Generally, but not always you’re billing hourly, and not a fixed rate. Unless you’re a budding partner, don’t complain about the game. Just learn it and use it to your advantage.
Come work at McK - utilization doesn’t matter until you’re an AP. Completely agree it is an arbitrary metric at a junior level
Chief
How can you possibly argue that utilization is arbitrary? Let’s do some mental gymnastics and say it is, how else would you rank employees?
Rising Star
To at to EYP 1, there’s luck of the draw on projects. Get put on a project where they cap your billable to 8 hours a day and your utilization is done for; whereas if you get a project that lets you bill actual you can go over 100%. You might even be working the same # of hours on both projects.
My bonus is based on utilization, but my annual reviews definitely aren’t. Our ratings are based on client and internal feedback, as well as progress towards your professional development goals.
If your area doesn’t have enough work for everyone to hit utilization goals, then the truth is your team has over staffed your contract. They should be maximizing revenue by using as few staff resources as needed to get the work done. If you all have excess capacity, then the truth is one of you needs to change projects. In a weird (and not fair way), your lower utilization shows the company you’re not making enough money for them (are under utilized) - whether this is your fault or your manger’s for overstaffing the engagement. What sucks is you can theoretically suffer for a staffing issue on the engagement. But from the revenue perspective, it doesn’t matter why the resource was underutilized just that it was.
Just making this argument for logic’s sake so you get why that’s the metric used. But you’ll be fine don’t worry - I’m sure things will get busy again soon and you’ll hit your utilization. Probably you’ll be swamped w work in a few months and over utilized. If you’re really worried, start networking internally to be added to a new projects. For now, enjoy the light load. It will likely change soon
Chief
Make sure you really understand how utilization is used in ratings decisions. In my experience it’s generally used in two ways. First, as a rough gauge of competence since people with poor performance have trouble getting and staying staffed. Second as a way to identify truly exceptional performance. If someone had hi utilization AND non-billable contributions it’s a signal of a very engaged and impactful person. They don’t get good ratings just on utilization, but it’s an element for story.
In 95% of cases once you hit your target it stops being a meaningful element in a performance story.
This is one of the main reasons why I left consulting. Impact doesn’t matter as much at the end of the day, because you’re just being measured by billable hours to quantify your value
Utilization is a big KPI for all employees at all consulting firms. We don’t produce anything, we only have our IP and our staff… us being utilized as staff is literally the only way these partnerships bill!