Utilization (or Chargeability)
Utilization = Direct Labor Cost All Labor Cost
• The ratio of direct labor cost to all labor cost • Includes the indirect labor cost of traditionally “non-billable” personnel. • Influenced by not only the utilization of project staff, but the number of (and compensation of) those non-billable staff.
Fast Growth Firm Median
Very High Profit Firm Median
2018 2019 2020 2021 2020
Survey Median
59% 60% 62%
62% 60% 62% 61% 59%
THE PRINCIPALS ACADEMY 2022
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