Resource utilization is a measure, expressed as a percentage, of how much of a project team or individual team member’s time is booked for work or actually spent working. To calculate resource utilization, which is sometimes referred to as project utilization, you simply divide the number of hours worked (or the number of hours booked for work) by the number of total hours available.
The whole idea behind resource or project utilization is to help improve the management of resources and, ultimately, the efficiency and quality of project delivery.
For example, a low resource utilization score often means that a project is over-staffed or that there are incomplete tasks preventing other tasks from being executed. This can easily lead to blown deadlines and delayed deliverables — and more importantly, unsatisfied clients.
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 Project Managers to be agile and reschedule resources as quickly as possible to avoid problems surfacing or becoming worse.