How to Read Utilisation and Margin Together

Why two reports can give you one much better business decision

When it comes to understanding the performance of your team, it is easy to get attached to a single number.

Utilisation is high? Great, everyone is busy.

Margin looks healthy? Brilliant, the work is profitable.

But look at either metric in isolation and you might only be seeing half the story.

The real insight comes from reading utilisation and margin together. In Projectworks, these two reports can help you understand not just whether your people are busy, or whether your projects are making money, but how those two things are connected.

Because busy does not always mean profitable. And profitable does not always mean sustainable.

First, what does utilisation actually measure?

Utilisation looks at how much of someone's available working time is spent on billable work.

In simple terms, it compares the hours a person spends delivering work for clients against the hours they are expected to work.

This target is usually set individually, based on a person's role and responsibilities.

For example, a consultant whose role is primarily client delivery may have a higher utilisation target than a senior manager who also spends time on internal leadership, proposals and business development.

And this is where things can get interesting.

Why 100% utilisation is not always the goal

At first glance, 100% utilisation sounds like the dream.

Every available hour is billable. Everyone is fully booked. The spreadsheet is probably looking very pleased with itself.

But for salaried employees, a 100% target is rarely realistic or healthy.

People need time for internal meetings, admin, training, business development, proposals and annual leave. Not every productive hour can or should be charged to a client.

So if someone consistently hits 100% utilisation, it is worth asking how they got there.

Are they dropping internal responsibilities?

Are they regularly working overtime?

Are they simply overloaded?

High utilisation can be a positive sign, but it should always come with context.

Then there is margin

Margin answers a different question.

Instead of asking, "How busy are we?", margin asks, "Are we making money from this work?"

At its simplest, margin is the revenue generated by a project minus the costs involved in delivering it.

In Projectworks, the cost side is built using a loaded hourly cost for each person. This can account for wages, benefits and other relevant direct costs associated with delivering the work.

This means you can start to understand whether the hours being invested in a project are translating into a healthy financial return.

And this is exactly why margin deserves to sit alongside utilisation.

Neither number tells the full story on its own

Imagine you have a team member with very high utilisation.

They are busy. Their timesheet is full. They are working on client projects all month.

Sounds good, right?

But what if those hours are being spent on a project with a poor margin?

Suddenly, being busy is not necessarily a sign of success.

On the other hand, you could have a highly profitable project that is relying on a small number of people working at unsustainable levels to deliver it.

The margin may look great today, but burnout and capacity issues have a habit of catching up eventually.

Looking at utilisation and margin together helps you spot these situations before they become bigger problems.

What should you be looking for?

When you bring the two metrics together, you can start asking much better questions.

High utilisation and high margin

This is generally the sweet spot.

Your team is spending a healthy amount of time on billable work, and that work is delivering a strong financial return.

Of course, it is still worth keeping an eye on capacity and workload. High performance is great, but nobody wants a team running at full speed indefinitely.

High utilisation and low margin

This is where alarm bells should start ringing.

Your people are busy, but the work may not be delivering the financial return you expected.

You might need to look at:

• Project pricing
• Scope creep
• Resource costs
• Inefficient processes
• The amount of rework involved
• Whether the right people are assigned to the right tasks

Being busy is not enough if the business is not benefiting from all that effort.

Low utilisation and high margin

This could mean you have highly efficient projects, but it could also indicate unused capacity in the team.

Perhaps there is an opportunity to take on more work without increasing headcount.

It is also worth considering whether the utilisation target is appropriate for the role. Not everyone should be measured against the same expectations.

Low utilisation and low margin

This combination deserves a closer look.

It could point to a lack of demand, poor project performance, inefficient resource allocation or a pricing problem.

The important thing is that you now have enough context to investigate further rather than simply reacting to one disappointing number.

Bringing the reports together in Projectworks

In Projectworks, utilisation and margin are available through separate reports.

The Utilisation Target Report helps you understand how individuals are performing against their expected billable capacity.

The Monthly Margin Report gives you visibility into the financial performance of your work.

Try reviewing both reports for the same period and, if possible, keeping them visible side by side.

This makes it much easier to connect the dots.

Instead of asking:

"Is utilisation good?"

Or:

"Is margin good?"

You can start asking:

"Are we using our team's time in a way that supports healthy, profitable and sustainable delivery?"

And that is a much more useful question.

The bigger picture

Good resource management is not about squeezing every possible minute out of your team.

And profitable project delivery is not just about cutting costs.

It is about finding the balance between capacity, workload, performance and financial outcomes.

Utilisation tells you how your team's time is being used.

Margin tells you what that work is delivering financially.

Together, they give you a much clearer picture of what is actually happening across your business.

So next time you are reviewing your Projectworks reports, do not let utilisation and margin live in separate tabs and pretend they have nothing to do with each other.

Put them side by side.

You might be surprised by what the numbers have been trying to tell you.

Want to see how we set up and use these reports? Send us a message and let's talk.