Is My HR Utilization Rate Calculation Accurate When Employees Work Over 8 Hours Daily?

Hi All,

I have been asked to calculate the utilization rate for human resources. According to my knowledge, I have done as below:

Standard Working Hours: 40 hours * 52 weeks in a year = 2080 hours
Billable Resources: 10
Actual Working Hours: Number of working days * 8 hours
So it will be: 2080 hours * 10 / Actual working Hours

My question is if I take standard working hours in a day as 8 hours to calculate the actual working hours, will the utilization rate be correct? According to my view, it is not because as the resources are working more than 8 hours a day, it won't be fair enough to calculate the actual hours.

Also, I have been asked to work out for per month. So please help me out in tracing this query. It's very urgent.

Dear Janaki,

Your projection on utilization is correct, but the rate of human utilization depends on various technical issues on the floor. However, we don't always consider those issues. For records, one method should be followed.

Regards,
Vijay

Hi,

Resource Utilization Factor = (actual hours spent by the resource)/(Total Capacity Hours)*100 For Example: By considering, 8 Hrs/day with 22 working days for a month and 5 people worked on the projects.

If 2 out of 5 people always work 2 hours extra every day, then the utilization will be as follows: RUF=((5*8*22)+(2*2*22))/(5*8*22)*100 = 110 %

If 3 out of 5 people always work 1 hour less every day, then the utilization will be as follows: RUF=((5*8*22)-(3*1*22))/(5*8*22)*100 = 92.5 %

Note: Actual effort should be an accurate value. Leaves and Holidays are to be excluded from the capacity hours.