110120

What is the difference between Utilization Ratio and Target Ratio?

 

Resolution:

Target Ratio is the percentage of the employee's time that is expected to be charged to regular, revenue producing projects. Use one of the following formulas to calculate a target ratio: 

• Direct/Total, also known as the Gross Chargeable Ratio: Vantagepoint calculates this ratio by dividing the total direct hours by the total hours worked. The average for all employees is typically about 65%.
• Direct/(Total - Absence), Also known as the Net Chargeable Ratio: Vantagepoint calculates this ratio by dividing the total direct hours by the total hours charged or worked minus any benefit hours. The average for all employees must be higher than the Gross Chargeable Ratio.
• Target refers to the Target Ratio field as defined in the Employee Details tab of the Employees hub for an employee. It reflects the expected percentage of direct (billable) hours for an employee.
• Direct/Standard 
• Direct/(Standard - Absence)

Utilization Ratio field is located in the Employee Details tab of the Employees hub for an employee. It is the maximum amount of time (expressed as a percentage) that the employee should be assigned as a named resource on your firm's projects. For example, if you expect an employee to spend 75% of her time actively involved in project work, enter 75 in this field. The Planning application uses the utilization ratio to determine an employee's availability for project assignments.

The employee's Utilization Ratio is used only by the Planning modules, in areas such as Resource management, Resource utilization reporting, and Resource searches. The Utilization Ratio allows users to see where resources are being Over Used and Under Used in project assignments.

Some clients will budget Overhead projects as well as Regular projects in the Planning module. In that scenario, the employee Utilization Ratio is typically a higher number than Target Ratio because the Utilization represents the percentage that the employee is named in both Regular as well as Overhead projects.

 

Knowledge Base Reference Number: KBA #110120