Capacity planning for agencies and dev shops: a practical guide

If you sell people's time — agency, dev shop, outsourcing, consultancy — capacity planning answers three questions, every week:

• Who is free, and when?Not “roughly next month” — which week, and at what percentage.
• Who is overbooked? The 120%-allocated engineer is your next missed deadline and your next resignation letter.
• Can we take the deal?When sales asks “can we staff 3 React devs from the 1st?”, the answer should take seconds, not a meeting.

Most 5–50-person teams answer these from a spreadsheet that one delivery manager maintains by hand. It works until the week that person is on vacation — which is, reliably, the week a client asks for two more people.

Utilization numbers lie when they mix people and work that should never be counted. The PSA-standard model uses two independent flags:

• Billable people vs overhead people. HR, sales, admin, and most founders are overhead — essential, but their hours are not sellable. If they sit in the denominator, your utilization looks worse than it is and nobody trusts the number.
• Billable projects vs internal work.Your own website rebuild or an internal tool is real work, but it is not revenue. A person's billable hours are the hours billable people spend on billable projects — nothing else.

One more correction most spreadsheets skip: people on approved leave should leave the denominator for those days. Utilization net of PTO is the number worth managing to; gross-of-PTO utilization punishes teams for taking vacations.

Timesheets record the past in hours; planning works better in percentages. “Olena is 60% on Project A and 40% on Project B” survives a short week, a public holiday, and a sick day — “Olena does 24 hours on A” does not. Percentages also make overallocation instantly visible: the moment someone's assignments sum past 100%, you have a decision to make, not a surprise to discover in next month's retro.

The practical setup: one row per person, one column per week, each cell = total allocated percentage, color-coded. Under ~80% is bench capacity you can sell; 80–100% is healthy; over 100% is a fire.

“Bench” — people allocated under 100% — is where agency margin is won and lost. A visible bench row lets you do three useful things: staff new deals from real availability instead of guesswork, schedule internal work and learning into genuinely free weeks, and spot the roll-off before it happens (an engineer whose project ends in three weeks should already be in a sales conversation today).

Treat it as inventory management. Hiding the bench doesn't shrink it — it just delays the moment you find out about it.

Annual capacity plans in services businesses are fiction — clients extend, cancel, and change scope quarterly. A rolling 12-week forecast is long enough to see roll-offs and hiring needs coming, and short enough to stay true. Review it weekly in the same 15 minutes you review pipeline: capacity and sales are two sides of one decision.

• Billable utilization (billable people, billable projects, net of PTO) — most healthy agencies live in the 70–85% band. 100% is not the goal; it means zero slack for sales support, interviews, and mentoring.
• Bench size in people-weeks, 12 weeks out — your sellable inventory.
• Overallocated people this week — should be zero; each one is a delivery risk with a name.
• Roll-offs in the next 4 weeks — every roll-off without a next assignment is future bench.

Helia HR is an HR system with delivery operations built in — made for exactly this workflow:

• A live capacity matrix — people × weeks, inline percentage editing, color-coded load, with a dedicated bench row and a 12-week utilization forecast.
• Billable flags on both people and projects, so utilization is computed the honest way — and people on approved leave drop out of the denominator automatically, because the same system runs your time off.
• A client-facing per-project capacity report (print-to-PDF, no rates shown) when a customer asks who is on their team next month.
• The same assignments feed timesheets and client invoicing — plan, track, and bill from one place instead of three tools and a spreadsheet.