What I Wish My Old Agency Leaders Had Told Me About Utilization

There’s something I wish I had learned years earlier, something that would have saved me months, if not years, of confusion, frustration, and burnout: utilization is not a set-and-forget metric.

Utilization isn’t a fixed number you chase blindly. It’s a living, breathing, ever-shifting output. It changes every single day, based on who’s hired, who’s out sick, who’s working on internal projects, who’s on leave, or even what stage a project is in. Trying to hold a team to a rigid annual target like 80% or 82% without accounting for these constant changes is not only unrealistic, it’s unfair.

Early in my career, I thought utilization was this clean, simple thing. But I’ve come to realize it’s not a number with standalone meaning. It’s just an output. You only get to utilization by dividing billable hours by available hours. That’s it. And those inputs? They’re constantly moving targets.

So what happens when you get invited to an industry conference? Or have to scope a new RFP? Or attend client meetings that don’t fall into “billable” categories? Those hours all chip away at your available time. And if you don’t account for them, you’ll never hit your goal and worse, you’ll be disappointed in your team for something that was never attainable to begin with.

This leads to frustration, misaligned expectations, and people burning out trying to reach an arbitrary benchmark that doesn’t reflect the reality of their workload.

I’m not saying don’t set goals. You need a target. But what you really need is a range, a healthy, realistic window based on actual billable capacity and true team availability. And that range should flex. Review it monthly, quarterly. Adjust it up or down. Treat utilization like the living metric it is.

Also, consider seasonality. Utilization in early January looks nothing like late December. And July and August? High vacation season. Even your best teams can’t deliver at the same clip when clients are offline or key team members are away.

The bottom line? Utilization is not a rigid KPI to be enforced like a scoreboard. It’s a dynamic output that reflects how your team is actually functioning in the real world. Treat it that way, and you’ll build a healthier, more productive agency for your clients, and your people.

Richard