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.
Survey Median Very High Profit Firm Median 60.8% 60.4% 66.7% Fast Growth Firm Median
2017 2018 2019 2020 2021
61% 62% 60% 62% 61%
100
THE PRINCIPALS ACADEMY 2022
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