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Does Anyone Have Employee Utilization Rates/Benchmarks?

Six Sigma – iSixSigma Forums General Forums Implementation Does Anyone Have Employee Utilization Rates/Benchmarks?

This topic contains 6 replies, has 5 voices, and was last updated by  Madeline Kohler 2 months, 2 weeks ago.

Viewing 7 posts - 1 through 7 (of 7 total)
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  • #240206

    MarcWilliams
    Participant

    Hi Everyone,

    I am new to the forum and look forward to sharing of ideas and best practices.

    So, my question: we recently have determined the utilization rates for multiple employee levels. These were focused on repeatable tasks with a monthly baseline of 160 hours.

    We are trying to benchmark to “common” utilization rates, so I am looking support for utilization rates at multiple levels for staff, manager, Sr. Manager, on up. Does anyone have this type of information ? I’ve often heard about 70-80% for staff, manager at 50-60%, etc. But looking for support for these numbers.

    Thanks much,
    Marc

    • This topic was modified 2 months, 3 weeks ago by  MarcWilliams.
    • This topic was modified 2 months, 3 weeks ago by  Katie Barry.
    • This topic was modified 2 months, 3 weeks ago by  Katie Barry.
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    #240218

    Strayer
    Participant

    I encourage you to stop wasting time measuring it, since rigorous time-keeping is also wasteful. Instead look at what people do, ask whether or not it’s productive, and if it isn’t, whether or not it’s productive or necessary. Change the culture so that everyone considers this.

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    #240220

    MarcWilliams
    Participant

    Hi,

    While I concur, this is only a one time multi-dimensional review for Accounting and HR environments. One of the request from my client was to determine the extent of “over utilization” of teams due to manual processes. Also, for work distribution.

    So, I’m just looking for benchmarks from comparison.

    Thanks,
    Marc

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    #240221

    Chris Seider
    Participant

    One can be utilized but not productive. I’d be open to learning/hearing why this has merit.

    It’s sort of like a production line being “up/running” but only running at 10% of capacity–it’s utilized but not productive.

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    #240244

    Strayer
    Participant

    I wouldn’t call this a benchmark but I was involved in a study at our IT dept. at AlliedSignal after hearing that non-production-line employees typically only spend about 2/3 of their time doing productive work. Thanks to administrative tasks, meetings of questionable value, socializing, etc. We found it to be true. We also found that doing the study interfered. One off-shoot was a boss who’d come through the office saying he wanted to see heads down and fingers flying on the keyboards, as if that meant productivity. In many fields people are often more productive if they have thought-time. We might look like we’re wasting time. I often benefited from getting away from the desk, take a walk, chat with someone. Then I’d have an “Aha!” moment. The problem with employee utilization measurement is that except on the production line where people are essentially machines you can’t measure what matters except by results. So I stand by my initial comment. You say your client is concerned about over utilization due to manual processes and about work distribution. Apply lean thinking to identify and eliminate non-value-added tasks rather than waste time on an essentially useless metric.

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    #240303

    Marchand
    Participant

    I agree with everyone’s opinions on the “utility” of your “utilization” project (sorry, couldn’t resist the pun). However, knowing how bosses are, sometimes you have to do what’s been asked of you. I’d say that it depends on the type of industry you’re in. If you’re a call center, there’s a ton of data on utilization rates — too much, actually. A typical call center agent should be at about 80% utilization — too high and they get burned out, too low and they get bored. At least that’s the conventional wisdom.

    But what I’d really like to point out is the idea of 160 hours/month as your baseline. We’ve been through the wars on this one and Strayer touched on it, too: It is rare for a person to actually put in 160 hours a month, let alone a whole company! What with vacation days, a holiday, a day of sick leave here and there, weather-related issues, a car accident on the way to work (I’m looking at one right now from my office window and I know those people behind the collision won’t be in their offices until 10:30 AM). My boss, the Visionary Boy Genius (VBG) figured this out in his first month here when our client also wanted budget & staffing estimates based in 1,920 hours/year (160*12). No one had ever pushed back on that until VBG did, and prevailed. The logic of what he said made perfect sense to the client, who’d never thought about it or been questioned before. Otherwise, I believe you are in for a long, hard haul.

    I do recall from SS class that the “hidden factory” accounts for approximately 20-40% of a company’s revenue. Maybe you can build off of that.

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    #240304

    Madeline Kohler
    Participant

    I think it is important to understand resource utilization as part of an entire program management office solution to forecast work, and implement a tiered approach to work in order to prioritize, align and govern processes. It does not mean employees have to track time everyday (although many companies do this for billable hours and do it successfully) but spending some time (say a couple weeks) having employees track the takt time in their processes, how much time they are in training or in meetings (on average) to determine if capacity can meet demand can be a great exercise, and a positive one at that! When someone is hired that does not equal 100% capacity or productivity, so we used a % graded scale based on how long it took each role to become proficient from date of hire; i.e.) actuarial analyst 12 months, certified financial planner 18 months, etc,. Understanding how much work can be completed and what processes can be improved to meet your product or service KPIs with a “not who but what” attitude can great for morale! I’ve attached a really basic template for a small department of 23 with a general capacity % methodology as you’ll see. Not sure if it will help, but we’ve done this with small departments up through 150 and 1000+.
    @kohlerm2

    Attachments:
    1. HEAT-MAP.xlsx
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