Resource Utilization Metrics: How Do Project Managers Measure It?


If you’re a project manager, you know that effective resource utilization is essential to ensuring a successful project. But what metrics should you use to measure it?

In this post, we’ll discuss the different types of resource utilization metrics, and explain how project managers use them to optimize their projects. We’ll also provide a guide on how to calculate these metrics and measure your project’s progress.

So whether you’re new to the world of project management or an experienced pro, read on for tips on how to measure and manage your resources effectively.

What Is Resource Utilization?

Resource utilization is the ability of an organization to use its resources in a productive way.

It encompasses all aspects of business operations, including planning, buying and selling goods and services, manufacturing processes, distribution channels, and administrative activities.

Why Is Resource Utilization Important?

Resource utilization is one of the most important factors when it comes to business performance. It’s essential that companies make sure they’re using their resources efficiently so they can meet customer demands and grow sustainably.

Understanding how your company uses resources will help you identify where you can reduce expenses, increase efficiency, or both.

Here are a few ways resource utilization affects business: 

  • Reduced productivity => Higher costs and lower profits
  • Inability to meet demand => Decreased sales and loss of customers
  • Poor quality products => Low reputation and lost market share

Resource Utilization Vs. Resource Allocation

There’s a big debate going on in the business world these days: resource utilization vs. resource allocation. And, unsurprisingly, both sides have their supporters and detractors.

Supporters of resource utilization believe that businesses should be focused on using resources as efficiently as possible to maximize profits.

This approach focuses on reducing waste and improving efficiency so that more resources can be put toward producing value-added products or services.

Supporters of resource allocation argue that businesses need to focus not just on how much they use, but also on how best to allocate those resources across various areas of the business.

This approach emphasizes developing long-term strategies based on sound analysis and understanding customer needs (and wants). It is hoped that this type of thinking will lead to efficient use of all available resources and increased profitability over time.

Types Of Resource Utilization

There are a variety of different types of resource utilization, and each has its own benefits and drawbacks. Below is a brief overview of the three most common types: 

  • Physical Resource Utilization: This type involves using physical resources to produce something else. Examples include mining coal to create electricity, farming crops to produce food, or extracting natural resources like oil or gas. Physical resource utilization can be very environmentally friendly because it uses less land, water, and energy than other methods. However, it can also be costly and time-consuming to perform these activities. 
  • Information Resource Utilization: In this type of usage, information is used instead of physical resources. For example, banks use information about transactions to make loans rather than investing in real estate or stocks. Information resource utilization can be more efficient than physical resource utilization because it uses fewer resources overall (for example, if all the data required for lending was already available). 
  • Service Resource Utilization: This type involves providing people with services rather than supplying them with goods or materials. Air travel is an obvious example; air carriers use service. Resource utilization provides passengers with transportation at an affordable price while maximizing profits gained from the customer traffic flow.

How Is Resource Utilization Measured?


There are a number of ways to measure resource utilization, and each has its own strengths and weaknesses.

One common way is to use a production index, which measures the amount of output produced relative to the amount of input used. This method can be useful for identifying problems with a process or tracking changes over time.

Another approach is based on hours worked per employee, which determines how much value an employee produces in relation to the number of hours they work.

This metric can be helpful when deciding whether employees are being properly rewarded for their contributions, or when determining who should receive overtime pay.

Still, another measure uses plant capacity at specific points in time (e.g., during peak season) to calculate total production levels compared to available resources.

This method can help organizations determine if they are exceeding their limits and potentially causing damage to equipment or property values.

Key Resource Utilization Metrics

There are a number of key resource utilization metrics that businesses should be aware of. Each has its own benefits and drawbacks, so it’s important to understand which ones are most relevant to your business.

Some of the key metrics include:

  • Utilization rate – This measures how much actual use is made of resources compared to their maximum potential usage. It helps identify where efficiency improvements can be made.
  • Cycle time – This metric tells you how long it takes for an order to go from start to finish (from when the customer submits an order until the product arrives at their door). It can help you identify areas where speedier processing or delivery could improve customer satisfaction and sales.
  • Lead time – This metric tells you how long it takes from when someone orders something until they receive it (in cases where shipping is involved). It can help you determine whether delays in shipping are due to high demand or poor inventory management.

How Do Project Managers Measure Resource Utilization?

Project managers use a variety of resources to complete their projects – from people to computers, and even time itself.

Knowing how much each resource is used can help you optimize your project for success. nTask provides the perfect platform for measuring resource utilization in real time.

nTask is a cloud-based project management solution that helps Project Managers track and monitor their projects. In this article, we will discuss how nTask has been helping Project Managers measure resource utilization.

One of the most important aspects of effective project management is being able to track and monitor resource utilization.

This information can help managers make informed decisions about which resources are needed for a given project, and also allow them to determine when progress has been made and whether or not changes need to be made in order to continue progressing forward. 

nTask allows Project Managers to collect data from multiple sources (such as task logs, Gantt charts, and reports) in one location so that they can easily see trends over time.

By knowing how much work is currently being done on each task, managers can more accurately estimate how long it will take for the entire project to be complete. 


What Are Examples Of Resource Utilization?

There are many different types of resource utilization, and the examples below are just a few:

1. Product utilization – Product utilization refers to the way a product is used by a consumer. For example, the product may be used to make a sandwich, or it may be used as part of a larger product.

2. Service utilization – Service utilization refers to how a service is used by a consumer. For example, an online service may be used to book a flight, or an online store may be used to purchase products.

3. Resource allocation – Resource allocation refers to how resources are allocated within an organization or system. This can include anything from how resources are used within a company, to how resources are allocated between different companies or regions.

4. Resource management – Resource management refers to the techniques and processes that are used to manage the resources that are available within an organization or system. This can include anything from planning and organizing to monitoring and controlling the use of resources.

What Is A Good Resource Utilization Rate?

A good resource utilization rate is the percentage of time that a company uses its resources (e.g. employees, equipment, materials) to produce the desired results.

Ideally, this rate should be as high as possible to ensure efficient use of resources and high productivity. 

How Do You Calculate The Resource Utilization Of A Project?

To calculate the resource utilization of a project, you would first need to gather all of the pertinent data and information about the project.

This data would include the total cost of the project, the number of resources used in its completion, and the amount of time it took to complete. Once you have this information, you can use a mathematical formula to calculate the resource utilization for the project.


Powerful yet elusive tool. Sometimes, they can make all the difference between success and failure in a project. With proper metrics and measurements, you can manage your resources to maximize their effectiveness while reducing unnecessary costs.

As an experienced project manager, what other resource utilization metrics do you use? Share them with us in the comments section below!

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