Resource managers are responsible for ensuring that their team has the necessary resources to achieve project objectives.
Tracking the right metrics and KPIs can help resource managers identify potential resource bottlenecks, make data-driven decisions, and optimize resource utilization. Here are some common metrics and KPIs that resource managers can track.
Resource utilization
Resource Utilization measures the percentage of time a resource is working on project-related tasks. Low utilization rates may indicate underutilization, while high utilization rates can result in burnout and reduced quality.
Total hours worked on project tasks: The total number of hours the resource has worked on tasks or projects during a specific period, such as a week or a month.
Total hours available: The total number of hours the resource is available to work during the same period, taking into account factors such as vacation time, sick leave, and other non-work-related activities.
Billable utilization
Billable utilization measures the percentage of time a resource spends on billable work. A low billable utilization rate can impact revenue, while high rates may indicate that resources are being overworked.
Total hours worked on billable tasks: The total number of hours the resource has worked on tasks or projects that are billable to clients or customers during a specific period, such as a week or a month.
Total hours available: The total number of hours the resource is available to work during the same period, taking into account factors such as vacation time, sick leave, and other non-work-related activities.
Resource availability
This KPI measures the amount of time a resource is available for project work. Tracking availability can help resource managers plan and allocate resources effectively.
Total available work hours: The total number of work hours the resource is available for during a specific period, such as a week or a month.
Total booked hours: The total number of hours the resource is booked to work on specific tasks or projects during the same period.
Total non-work hours: The total number of hours the resource is not available for work due to factors such as vacation time, sick leave, training, or other non-work-related activities.
Resource cost
This metric measures the cost of a resource per hour, day, or project. Tracking resource cost can help resource managers optimize resource allocation to achieve the best value for money.
Total cost of resource: The total cost of employing or contracting the resource during a specific period, including factors such as salary or hourly rate, benefits, and overhead costs.
Total hours worked: The total number of hours the resource has worked on tasks or projects during the same period.
Resource allocation
This metric measures how resources are allocated across projects. Overallocation can result in burnout and missed deadlines, while under-allocation can lead to underutilization and reduced productivity.
Total hours allocated to a project: The total number of hours the resource is assigned to work on a specific project or set of tasks during a specific period.
Total hours available: The total number of hours the resource is available to work during the same period, taking into account factors such as vacation time, sick leave, and other non-work-related activities.
Resource cost variance
Resource cost variance measures the difference between the actual resource cost and the planned resource cost. A high cost variance can indicate inefficiencies in resource management.
Actual cost of resource: The actual cost incurred for a resource during a specific period, including factors such as salary or hourly rate, benefits, and overhead costs.
Planned cost of resource: The planned or budgeted cost for the resource for the same period, based on estimates or projections.
Resource skill utilization
This metric measures how well a resource’s skills are being utilized on a project. Underutilization of a resource’s skills can lead to inefficiencies, while overutilization can lead to burnout.
Billable Time Spent on Utilized Skills refers to the amount of time that a resource spends actively using their specialized skills on billable work, while “Total Available Time” refers to the total amount of time that the resource is available to work, including both billable and non-billable time.
The “Billable Utilization Rate” is the percentage of billable time worked by the resource, and is calculated as:
For example, if a consultant works 160 hours in a month, and spends 120 hours on billable work, with 100 of those hours spent actively using their specialized skills, the billable utilization rate would be:
Billable Utilization Rate = 120 hours / 160 hours
Billable Utilization Rate = 0.75 or 75%
Resource turnover rate
This metric measures the percentage of resources who leave the organization over a given period. High turnover rates can indicate issues with retention, which can impact project continuity and knowledge transfer.
Resource Turnover Rate = (10 / 100) x 100
Resource Turnover Rate = 10%
Resource turnover cost
This KPI measures the cost of replacing a resource who leaves the organization. Tracking resource turnover cost can help resource managers understand the financial impact of turnover and take steps to reduce it.
The cost per replacement resource may vary depending on factors such as the position level, industry, location, and recruitment and training costs associated with hiring and onboarding new employees.
For example, if a company had 10 employees leave during the year, and the average cost to replace each employee is $50,000, the resource turnover cost would be:
Resource Turnover Cost = 10 x $50,000
Resource Turnover Cost = $500,000
Resource allocation efficiency
This metric measures how efficiently resources are allocated to projects. Inefficient resource allocation can lead to overallocation, under-allocation, and delays.
Total Project Hours Worked refers to the actual number of hours spent on project work by a resource or a group of resources during a specific period
Total Allocated Hours refers to the total number of hours that were allocated for project work for the same period.
For example, if a team of five developers was allocated a total of 400 hours for project work in a month, but actually worked only 360 hours on project work during that period, the resource allocation efficiency would be:
Resource Allocation Efficiency = (360 hours / 400 hours) x 100
Resource Allocation Efficiency = 90%
This means that the team used 90% of the allocated hours effectively on project work, indicating that their resource allocation was efficient at 90%.
Resource capacity
This metric measures the total amount of work a resource can complete over a given period. Understanding resource capacity can help resource managers plan and allocate resources more effectively.
The formula for Resource Capacity can be calculated in different ways depending on the context and the type of resources being considered. Here are a few examples:
For individuals:
Total number of hours available for work refers to the number of hours an individual is available to work during a specific period, such as a week or a month.
Utilization Rate refers to the percentage of available hours that are utilized for actual work. For example, if an individual is available for 40 hours per week and spends 35 hours on actual work, the utilization rate would be 87.5% (35/40).
For teams:
Total number of team members refers to the number of members in a team
Total number of hours available for work refers to the total number of hours that the team is available to work during a specific period.
Utilization Rate refers to the percentage of available hours that are utilized for actual work by the team as a whole.
Resource workload balance
This metric measures how evenly resources are distributed across projects. Unbalanced workloads can lead to burnout, reduced productivity, and delays.
Actual Billable Hours refers to the total number of billable hours that a resource or a group of resources worked on client projects during a specific period
Target Billable Hours refers to the number of billable hours that a resource or a group of resources should be able to achieve based on their utilization rate and availability.
For example, if a team of five consultants has average actual billable hours of 140 hours per month and an average target billable hours of 160 hours per month based on their utilization rate, the resource workload balance would be:
Resource Workload Balance = 140 hours / 160 hours
Resource Workload Balance = 0.875
This means that the team’s actual billable hours are 87.5% of their target billable hours, indicating that their workload may be imbalanced and that some resources may be underutilized while others are overworked.
Resource availability variance
This metric measures the difference between the actual availability of a resource and the planned availability. A high variance can indicate issues with scheduling and planning.
Planned Availability refers to the number of hours that a resource was expected to be available during the period based on their contract, work schedule, or other agreements
Actual Availability refers to the number of hours that the resource was actually available, taking into account any unplanned absences, such as sick leave, vacation, or other personal time off.
For example, if a software developer was planned to be available for 160 hours during a specific month but was actually available for only 140 hours due to sick leave, the Resource Availability Variance would be:
Resource Availability Variance = 160 hours – 140 hours
Resource Availability Variance = 20 hours
This indicates that the resource was not available for 20 hours as planned, which may have an impact on project timelines and resource allocation for that period.
Resource forecast accuracy
This metric measures the accuracy of resource forecasting. Inaccurate resource forecasts can lead to overallocation, under-allocation, and delays.
Actual Utilization refers to the actual utilization rate of a resource or a group of resources during a specific period
Forecasted Utilization refers to the utilization rate that was predicted by the resource forecast for the same period.
For example, if the forecasted utilization rate for a group of consultants for a specific month was 80%, but the actual utilization rate was 75%, the Resource Forecast Accuracy would be:
Resource Forecast Accuracy = (1 – |75% – 80%| / 80%) x 100%
Resource Forecast Accuracy = 87.5%
This indicates that the forecast was 87.5% accurate in predicting the actual utilization rate of the group of consultants for the month. A higher percentage indicates a more accurate forecast, while a lower percentage indicates a less accurate forecast.
Realization rate
Realization rate is a financial metric that measures the percentage of billable hours that a consulting firm actually bills to clients. It is an important metric for companies to monitor and optimize to maximize revenue and profitability.
Billed Hours refers to the number of hours that a consulting firm actually bills to clients for the work performed during a specific period
Billable Hours refers to the number of hours that could have been billed to clients based on the resources available and their capacity during that period.
For example, if a consulting firm had 1,000 billable hours available in a month and they were able to bill 800 of those hours to clients, their realization rate would be:
Realization Rate = (800 billed hours / 1,000 billable hours) x 100%
Realization Rate = 80%
This indicates that the firm was able to bill 80% of their available billable hours to clients during that month.
Realized rate
Realized rate is a financial metric that measures the actual revenue earned per hour of work performed by a consulting firm or a specific consultant. This KPI can be used to evaluate the profitability of specific projects, clients, or consultants, and to identify areas for improvement in pricing strategies or resource allocation.
Realization rate = (Billed Hours / Billable Hours) x 100%
Billing Rate refers to the hourly rate that the consulting firm or consultant charges to clients for their services.
For example, let’s say a consulting firm has a realization rate of 80% and a billing rate of $150 per hour. The realized rate for that firm would be:
Realized Rate = 80% x $150
Realized Rate = $120 per hour
This means that for each billable hour worked, the consulting firm earns an average of $120 in revenue.
