Utilisation

In professional services, one of the key metrics is billable utilisation. How much your consultants bill will directly impact the profitability of the business - regardless of the model you use (i.e. dedicated pre-sales or delivery/billable consultants as pre-sales). Best in class utilisation is considered to be around 75% based on the SPI Benchmark data from the latest “best in class” report and that figure typically takes into account annual leave, training and some allowance for a small amount of admin and pre-sales.

But who is responsible for making sure the billable consultant is always billing at 75% utilisation? Their manager, the practice manager, the P&L owner, the sales team or the consultant themselves? Seems like a simple enough question, but the answer can be a little more complex as I believe it isn’t any single person or role that is responsible for utilisation, just like there isn’t any single person or role responsible for selling (that's right, it's not just a salespersons role).

In a business with empowered and engaged employees, this question would never even come up as the engaged employee wants the business that they work for to be successful, they want to tell others about how great the consultants are and how customer focused the business is. The engaged consultant sells wherever they are; at a local BBQ when the talk turns to “I need someone to help me build my new mobile app”,  or on the client site where they overhear a discussion about a new business problem in another department. Engage your staff in your businesses and you should never have to worry about this question. 

 

But in case you don't have this wonderland, what’s the answer?

 

Recently a  business I was working with had been going through some utilisation challenges. Not that unusual for this time of year where a lot of projects are ending or customers are winding down and not looking to start new projects until the new year. But what became clear as the pressure mounted on the financials (and they forgot that there were significant new projects starting in the new year) was that the business wanted to set new expectations that made the consultant solely responsible for their own utilisation. They decided that the consultant must either be billable, on leave or on a performance plan to be managed out the door. I’m not sure if this is something that you wish to make a part of you culture, but if you truly believe the consultant needs to find their own work, then you need to set that expectation with them when they are hired, just as a junior lawyer has that expectation when they are hired - they must be billable or they don’t have a job. 

 

In my experience a number of consultants (generally very technical consultants) are simply not very good at selling themselves. We might sometimes call them “downstream” consultants where, once their services are sold to a customer and they appear on site, the customer finds them to be invaluable. In this situation, these consultants might be held tightly by the customer and this becomes their “value” and essentially, their ability to deliver time and again is how they remain billable.

Once they hit the bench though, they will be relying on a salesperson to bring them into a new opportunity. Should they be put on a performance improvement plan and managed out the door just because they don’t have “selling” in their repertoire? Absolutely not. If you value the skills they bring to the team and the customer values them when they are on site delivering, then they are an important member and you need to work with sales to get them engaged, not disengage them with threatening behaviour like a performance improvement plan - the first step in exiting someone from an organisation. 

 

There are other consultants who have a much more consultative approach and may be able to get themselves off the bench, but generally they are still going to rely on someone else for lead generation. If you have a well oiled sales and marketing engine, and these consultants are still on the bench, then perhaps we have a performance problem. But if you are not generating the leads and the opportunities, then you need to think twice before you start to threaten dismissal for your key resources, simply because they are spending some time on the bench.

What is non-negotiable for benched employees is having them think about how they can productively use this time. Whether on pre-sales or looking at harvesting the IP from the project they just finished on, I would always insist on a bench plan to be sure they have a plan for the best use of this time.

In summary, culture is king. If utilisation is a problem in your organisation, you can fix marketing, and you can fix sales, and you can set an expectation that your consultants need to find your own work, but fix the culture, engage your workforce and you won’t have to worry about fixing any other parts of the business, they will fix themselves.

Author: Craig Broadbent