Understanding Utilization Rates in the Agency Industry

• 0:00-2:00  –  Introduction to the solo cast episode focusing on utilization rates, emphasizing its significance for agencies.
• 2:00-6:00  –  Historical context of utilization, highlighting its relevance in the billable hour era and its evolving role in the modern agency landscape.
• 6:00-11:30 – Challenges in measuring utilization, emphasizing variations in defining billable hours and capacity, hindering benchmarking efforts.
• 11:30-15:00 – Emphasis on a comprehensive management framework and the interconnectedness of utilization with financial metrics.
• 15:00-18:00 – Discussion on the impact of utilization on agency profitability and the absence of a universal benchmark.
• 18:00-22:30 – Introduction to the Parakeeto framework and its consistent approach to calculating utilization within a broader context.
• 22:30-26:00 – Insight into utilization as a lever affecting delivery margin, with examples highlighting potential discrepancies in profitability.
• 26:00-30:00 – Exploration of the formula for utilization, defined as delivery hours over capacity, with detailed explanations of each component.
• 30:00-34:00 – Importance of considering delivery hours over billable hours in the context of utilization, using examples to illustrate profitability discrepancies.
• 34:00  – End Conclusion on the significance of a thoughtful and consistent metric aligned with a broader management framework, with a focus on the flexibility of the Parakeeto framework.

Show Notes:

• Capacity Planning 101: Strategies, Benefits, and Challenges: https://parakeeto.com/blog/capacity-planning-101-strategies-benefits-and-challenges/
• Toolkit: https://parakeeto.com/toolkit/
• Calculator: https://parakeeto.com/blog/utilization-rate-calculator/
• Utilization Rate & Capacity Forecasting: Marketing Agency’s Guide: https://parakeeto.com/blog/resource-utilization-capacity-planning-for-marketing-agency-2/