When organizations talk about “doing more with less,” they’re usually talking about resource utilization. It’s one of the simplest, and most powerful, metrics in project and portfolio management. At its core, resource utilization measures how effectively you’re using the time, skills, and capacity you already have.

Done right, it keeps projects on track, prevents burnout, and ensures investments pay off. Done poorly, it creates bottlenecks, overruns, and frustrated teams.

What Is Resource Utilization?

Resource utilization is typically expressed as a percentage:

Utilization (%) = (Planned Time on Work ÷ Total Available Time) × 100

For example, if a developer is available for 40 hours in a week and spends 32 hours on project work, their utilization is 80%.

It’s not just about keeping people busy. It’s about making sure the right people are working on the right things… without tipping into burnout.

Why Knowing Resource Utilization Matters

Organizations that pay attention to utilization see improvements across the board:

• Productivity & delivery Teams focused on the right work deliver faster. The Project Management Institute (PMI) found that 50% of projects miss their deadlines largely due to poor resource allocation.
• Cost efficiency Idle or misapplied capacity eats into margins. McKinsey reports that 90% of executives consider capacity building a top priority, yet only two-thirds manage to do it effectively.
• Employee engagement Overloading talent is a fast track to burnout. On the flip side, balanced workloads improve morale and retention.
• Strategic execution Gartner suggests that a healthy utilization rate falls between 70–80%. That sweet spot balances productivity with sustainability.

Best Practices to Optimize Resource Utilization

1. Start with visibility You can’t manage what you can’t see. Build transparency into who’s working on what, and where capacity is available.

2. Invest in the right tools Spreadsheets aren’t enough when you’re running dozens (or hundreds) of initiatives. Modern resource management platforms provide real-time insights, forecasting, and scenario modeling.

3. Balance utilization, don’t maximize it Utilization isn’t a race to 100%. Consistently running people at or near capacity leaves no room for innovation, upskilling, or unexpected changes.

4. Build flexibility into planning Projects shift, strategies evolve, and people take vacations. Regularly revisit utilization data and adjust to keep things realistic and sustainable.

The Importance of Resource Utilization

1. Enhanced Productivity By monitoring and optimizing resource utilization, organizations can ensure that their resources are being used to their full potential, leading to increased output.
2. Cost Efficiency Effective utilization helps in reducing idle time and underuse of resources, leading to cost savings.
3. Improved Project Delivery Proper resource allocation ensures that projects are completed on time and within budget.
4. Employee Satisfaction Balanced workloads prevent burnout and enhance employee morale.

Optimizing Resource Utilization

The practice of utilizing your resources efficiently and effectively doesn’t stop with just allocation. Continuous improvement is needed to get the most out of it.

1. Implement Strategic Workforce Planning Align resource allocation with organizational goals and project requirements.
2. Utilize Resource Management Tools Adopt software solutions that provide real-time insights into resource availability and workload.
3. Regularly Monitor and Adjust Continuously assess resource utilization and make necessary adjustments to optimize performance.
4. Invest in Employee Development Ensure that employees have the necessary skills and training to perform their tasks efficiently.

Optimizing resource utilization is not merely a tactical necessity but a strategic imperative. By effectively managing how resources are allocated and utilized, organizations can achieve greater efficiency, cost savings, and overall success.

 

Original Blog Published in 2018

Project managers have a lot of responsibilities. It’s their job to ensure projects succeed on time and within budget. It’s a job that requires managing a lot of moving parts, with PMs making project decisions in advance and on the fly.

It’s this shapeshifting nature of projects that means, even with the best team and all the resources and time in the world, projects can still fail or not live up to expectations if resources aren’t utilized properly.

Resource utilization can be a formula for success. In this article we’ll be looking at the benefits of resource utilization and how you can make sure you’re getting the most out of all the resources available to you.

What is resource utilization?

Resource utilization is the measure of how much of your available resources you are currently using. It can help you to plan how to utilize your resources more effectively to ensure that your organization is being as productive as possible.

Effective utilization of resources can be helpful for both employees and employers. Not only does it ensure that employees have enough work to make their role viable and profitable, on the other side of the spectrum it can also prevent overworking and burnout – providing a more balanced work life overall.

Resource allocation vs. resource utilization

These processes might sound similar, but they have some slight and important differences:

Resource allocation sees a project manager choosing suitable staff for a project and then managing them as the project is completed, reassigning them, or altering their workload if necessary.

Resource utilization, however, is the process of strategically measuring how effective resources are. A resource utilization example is checking if a certain employee is being maximized in between projects. While allocation organizes your project, it’s utilization that makes your project successful.

Both processes are key to achieving project success, however resource utilization is often undervalued. Creating a robust framework for assessing the conditions of existing resources might seem complicated, but with the right tools it can be easy. Once you’ve decided on the budget and resources available, and the metrics you want to use to measure efficiency, you can implement resource management into your projects.

Calculating a resource utilization formula

When it comes to calculating a resource utilization formula, the most common formula for project managers is full-time equivalent (FTE). This is used to calculate how optimally a resource is being used in terms of available workable hours.

To calculate this, divide the allocated hours a resource will work during a project by the total number of workable hours available in the project. Multiply the result by 100 to create a percentage, and the product will indicate the effectiveness of the resource. For example, if a worker has been allocated to a project for 45 work hours, and that project has a total of 60 workable hours, then that resource has a utilization of 75% as per the FTE resource utilization formula. 

It’s best to aim for a rate of around 80% – anything above this risks employee burn out, and anything less will not utilize resourcefully. Creating a resource utilization analysis report can show you all the resources you have available and how they’re currently performing. There’s no perfect formula to guarantee success since every project is different – this is something which can be difficult to manage in a DIY project management tool like Microsoft Excel.

In the past PMs relied on Excel to calculate resource utilization rate, but Excel doesn’t have the capacity for data projections and scenario analysis that more advanced tools do. Resource utilization requires high-quality tools to give project managers the agility and insights they need.

What are the benefits of resource utilization?

Resource utilization, ultimately, helps you make the most of your available resources:

• Proper utilization of resources is important for maintaining productivity, because it prevents staff from underperforming or being overburdened by workloads and burning out
• Projects can be managed with better visibility, reducing the risk of oversights
• Maximum utilization of resources gives you a better ROI
• It ensures that specific resources aren’t being over- or under-utilized
• It allows PMs to be agile and reschedule resources as quickly as possible to avoid problems surfacing or becoming worse

Resource utilization tips

With an intelligent resource management platform, project managers have dedicated tools to approach and master resource utilization:

• Leverage visibility – projects may be run separately, but they affect each other. Instead of viewing projects as separate entities, create a resource utilization plan that allows you to view all resources. This way, you’ll be able to assess capacity and performance more effectively.
• Beware of scope creep – projects will inevitably demand extra time and resources, and it’s a project manager’s job to keep them from going over time or budget. Resource management software can put all active projects front and center, utilizing resources equally amongst them to put things in perspective.
• Compare booked hours with actual hours – it’s rare that a project ever runs according to plan, so make sure to examine the hours booked in preparation for the project and actual hours worked in real time. This will give you a chance to see if the project plan needs adjusting before anything goes wrong.
• Always be prepared – visualize and run scenarios that will help you prepare for a change of circumstances. If your budget changes or if you lose a resource, you’ll be able to adapt more quickly.

Effective utilization with Tempus Resource

To deliver successful projects on time and on a budget, project managers need intelligent resource management software. Tempus Resource gives project managers the ability to see individual resource availability and reallocate resources quickly if needed.

What-if scenarios allow risk-free project visualizations – it’s possible to see what will happen to a project if its budget or timescale changes. These visualizations enable risk-free decisions. Heat maps and cool maps offer easy visibility of resource performance, so project managers can quickly see if resources are being over or under-utilized.

Project managers need a tool that works as hard as they do. Tempus Resource can give you the resource insights you need to guarantee project success.

Tempus Resource helps you create resource models with intelligent data forecasts, reduce risk, and increase ROI. To find out more about resource management, get in contact with us today.