Billable utilization: what good looks like for an agency

Ask three agencies their utilization and you'll get three incomparable numbers, because the formula hides three choices:

• Who counts? If HR, sales and founders sit in the denominator, the number sinks and stops meaning anything. Count billable people only — everyone else is overhead by design.
• What work counts?Internal projects are real work but not revenue. Billable hours = billable people's hours on billable projects.
• What's the denominator? Available time net of approved leave and public holidays. Gross-of-PTO utilization punishes vacations and makes August look like a crisis every year.

Written out: billable utilization = billable hours ÷ available hours (net of PTO), for billable people only. Whatever tool or spreadsheet you use, fix this definition first — every benchmark below assumes it.

• Below ~65%:the bench is eating your margin. Either sales is underfeeding delivery or roll-offs aren't being resold in time. This is the band where agencies quietly lose money while everyone is “busy”.
• 70–85%: the healthy band most professional- services benchmarks cluster around for delivery staff. There is enough slack for pre-sales support, interviews, mentoring and learning — the non-billable work that keeps the billable work coming.
• Above ~90% sustained: looks great in the spreadsheet, burns people in reality. No slack means every estimate slip becomes overtime, and your best engineers — the ones every client asks for — are the first to leave.

Two caveats. First, the right target depends on role: senior people who sell and architect should sit lower than mid-level delivery engineers. Second, a single month means little — manage the trend over a quarter, not the spike.

• Resell roll-offs before they land. The cheapest utilization gain is a person whose project ends in three weeks already having a next assignment. That requires seeing roll-offs coming — a rolling forecast, reviewed weekly with sales.
• Fix time capture before staffing.If hours aren't logged, utilization is fiction; teams routinely “discover” several points of utilization just by closing timesheet gaps.
• Manage the bench as inventory.A visible bench row turns “who's free?” from a meeting into a glance — and free weeks into internal work, learning, or a discounted starter project instead of idle time.
• Watch overallocation as hard as underallocation. The 120% engineer isn't extra revenue — it's deferred rework, slipped estimates and attrition risk with a name.
• Don't chase 100%. If the plan needs full-capacity heroics to hit margin, the problem is pricing or scoping, not utilization.

Helia HR bakes the honest definition in, so the number is comparable week to week without a spreadsheet ritual:

• Billable flags on both people and projects — overhead roles and internal work are excluded by construction, not by remembering to filter.
• Leave-aware availability: people on approved time off drop out of the denominator automatically, because the same system runs time off.
• A capacity matrix with a bench row and a 12-week forecast, so roll-offs and free capacity are visible before they become bench.
• The same assignments feed timesheets, invoicing and per-project margins — utilization, revenue and profitability stay one consistent story.