Managing Utilisation and Key Metrics in Modern Consultancies

Running a consultancy can feel like a constant balancing act. You need enough talented people to deliver great work for your clients, but not so many that you lose money when projects slow down. Utilisation is the key metric at the center of this challenge. Still, as any consultancy leader knows, managing utilisation is far from straightforward.

The stakes are high. Research shows that UK IT consultancies alone lose an estimated £3.06 billion annually to inefficient bench management. For a mid-sized consultancy with 50 consultants, even a modest 5% drop in utilisation can translate to hundreds of thousands in lost revenue each year. Pushing utilisation too high risks burnout, quality issues, and ultimately losing the talent you've invested so much in recruiting and developing.

How do successful consultancies manage these challenges? It begins with understanding not just utilisation, but also the range of related metrics that reveal your business’s true health.

Understanding Utilisation: More Than Just a Number

At its core, utilisation rate measures the percentage of an employee's available working hours spent on revenue-generating activities. The formula is straightforward:

Utilisation Rate = (Billable Hours ÷ Total Available Hours) × 100

If a consultant works 40 hours a week and bills clients for 32 hours, their utilisation is 80%. Simple enough, right?

Not exactly. The challenge comes from the fact that not all hours are the same. Most consultancies exclude holidays and paid time off from available hours, but what about important non-billable work? Activities like internal meetings, training, business development, proposal writing, and knowledge sharing all help your firm succeed in the long run, even though they don’t directly bring in revenue.

This is why targeting 100% utilisation is both unrealistic and counterproductive. Industry benchmarks typically fall between 70-85% for most consulting firms, with some variation depending on seniority and role. Senior leaders and those with management responsibilities naturally spend more time on non-billable strategic work and should have correspondingly lower utilisation targets.

The Hidden Costs of Getting It Wrong

When utilisation drops below the ideal level, it affects your whole business. For example, if your average daily rate is £800, having one consultant on the bench for a week means £4,000 in lost revenue. But that's merely the visible portion of the iceberg.

Margin erosion starts as soon as consultants are not working on billable projects. You still have to cover salaries, National Insurance, pensions, office costs, and benefits. A senior consultant who costs £700 per day and is on the bench is not just missing out on revenue—they are using up resources. Over time, this can lead to tough choices, like lowering rates to win work, taking on less profitable projects, or even making redundancies.

The effects go beyond just money. Talented consultants want to solve interesting problems and make a difference. If they spend too much time on the bench, their morale drops, their confidence suffers, and they may leave for competitors who can keep them busy. After investing in hiring and developing these people, losing them because of low utilisation is an even bigger setback.

The Key Metrics Every Consultancy Must Track

Utilisation is important, but it’s only part of the picture. Top consultancies track a range of metrics, including both lagging indicators (what has happened) and leading indicators (what is likely to happen).

Lagging Indicators: Learning from the Past

Revenue Growth Year-over-year revenue growth shows if your strategies, people, and technology are working. But it’s important to look closer: Is growth coming from new clients or existing ones? Are you growing in your target sectors? Revenue growth without profit just means you’re working harder without real benefit.

Project Profitability It’s important to measure the financial results of every project. Use the formula (Revenue - Delivery Costs) divided by Revenue. Analyzing project profitability helps you see which types of work, clients, and teams give you the best results. It can also highlight issues, like fixed-fee projects that often go over budget or clients who are no longer profitable.

Realization Rate Even when consultants are fully utilised, you might not be capturing the full value. Realization rate measures the percentage of potential billable hours that are actually billed to clients. If your standard rate is £200/hour but you consistently discount to £180, your realisation rate is 90%. Industry benchmarks for professional services firms typically range from 86-92%, with smaller firms often achieving higher rates due to tighter controls.

Leading Indicators: Seeing Around Corners

Sales Pipeline Your sales pipeline is key for planning your team’s capacity. It helps you balance your available staff with client demand. A strong pipeline means you can hire ahead of time with confidence. If your pipeline is weak, it may be time to use bench staff for business development or look at outside staffing options.

Scheduled Billable Hours This forward-looking metric reveals how busy your team will be in the coming weeks and months. If scheduled hours are declining, you have a window to take corrective action before consultants land on the bench. If they're climbing too high, you might need to bring in additional capacity.

Forecasted Revenue Recognition This metric is important for accounting and managing cash flow. It tracks when you can recognize revenue based on project milestones and how much work is done. Accurate forecasting takes careful tracking, but it gives you a clear view of your future finances.

Time-to-Staff How quickly can you resource a new engagement? This operational metric directly impacts your ability to respond to opportunities and influences client satisfaction. Lengthy time-to-staff periods often indicate resource constraints—precisely when platforms like SourceCrowd become invaluable.

The Bench Time Paradox

The reality is that some bench time is both unavoidable and necessary. Projects rarely line up perfectly. A consultant might finish one project on a Tuesday, but the next one doesn’t start until the following Monday. You need some extra capacity to handle unexpected opportunities or client emergencies. The aim isn’t to get rid of bench time completely, but to reduce wasted time and make the most of the bench time you do have.

Progressive consultancies approach inevitable bench time strategically. They deploy bench resources to:

• Business development consultants are often your best salespeople, speaking credibly about capabilities and building client relationships
• Thought leadership producing white papers, blog posts, and presentations that enhance your firm's reputation
• Internal projects addressing technical debt, improving internal systems, or developing IP that differentiates your offering
• Skill development targeted training that builds capabilities you need for upcoming work, not generic professional development
• Mentoring pairing experienced consultants with junior team members accelerates development and strengthens your culture

This difference matters. Using bench time for these activities may not bring in revenue right away, but it creates long-term value. Letting consultants wait without purpose, on the other hand, leads to lost value in many ways.

Modern Solutions for Age-Old Challenges

Traditional ways of managing utilisation—like careful hiring, building strong client relationships for steady work, and sometimes making redundancies when the bench gets too large—still matter. But in today’s fast-changing market, they aren’t enough on their own.

Better visibility is essential. Only 39% of consultancies know in real time who is available on their bench. If you don’t know who is free, what skills they have, or when they can start, it’s hard to match people to projects. Modern resource management systems help with this, but they can’t fix the basic problem of matching supply and demand.

Collaborative resourcing models can change the game. Instead of seeing other consultancies only as competitors, forward-thinking firms realize that everyone faces similar utilisation challenges. When you have extra capacity, another firm might have more work than they can handle. When you’re busy and need help, they might have the right specialist available.

Platforms that support peer-to-peer resource sharing remove the 25% recruiter fee and give you access to vetted professionals from trusted firms. You can turn your bench from a cost into a source of revenue by letting your people work on other consultancies’ projects. At the same time, you can fill skill gaps and take on new opportunities without the risk of hiring more permanent staff.

This approach addresses utilisation challenges from both directions, reducing bench time for your existing team whilst providing flex capacity when you need it.

Striking the Right Balance

Managing utilisation effectively requires accepting several uncomfortable truths:

• You can't maintain 100% utilisation indefinitely without sacrificing quality, burning out your team, or both
• Bench time is sometimes unavoidable, but how you respond to it determines whether it's merely costly or catastrophic
• No single metric tells the complete story you need a balanced scorecard of leading and lagging indicators
• Traditional approaches (hiring, firing, and hoping for steady work) are insufficient in a dynamic market
• Collaboration with peers isn't a weakness it's a sophisticated strategy that benefits everyone

Consultancies that succeed in the future will use more flexible, networked ways to manage resources. They’ll keep their core teams lean, focus on the most important metrics, and use trusted networks to scale up or down as needed.

Your skilled specialists shouldn’t be idle when another consultancy needs their help. And when you have more work than you can handle, you shouldn’t have to choose between saying no and rushing to hire. There’s a better way—one that turns utilisation challenges into shared opportunities.

The plates don't have to crash. You just need the right safety net.

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SourceCrowd helps consultancies share, source, and fill specialist roles instantly with trusted peers turning bench time into revenue whilst filling skills gaps without recruiter fees or headcount risk. Learn more about how collaborative resourcing works.