What Can You do About Low Utilization in a PSO?

It’s one thing to measure utilization (see Utilization). It’s quite another to understand what it means and to influence it.

Even though the most serious threat to utilization is always not having enough work to do (about which I give no particular advice here), it is nevertheless important to manage the work that you have, and the manpower that you have, optimally. You should be considering how to maximize utilization both in good times and slow times.

These are some of the issues you might think about:

• Cancellations and Postponements

Clients rarely understand the lost time and value that results from cancellations and postponements. Whilst the interests of good relations must always prevail, it is important to make it clear that cancellations and postponements hurt you.

Can you persuade your clients to be reasonable about cancellations that result in lost time for your PSO?

Can you charge penalty fees if there is no good reason for cancellation or postponement?

• Poor Planning

Planning must take account of availability, skills, preferences, and experience, so you must make sure you have access to all of this information when you are planning the deployment of your staff.

Can your schedulers optimize the deployment of your team?

• Poor Time Management

Good personal time management can make a difference, especially if a member of your staff is working in multiple places on multiple projects and tasks.

Are your staff planning their time efficiently?

• Failure to Share

Many PSOs are structured by departments, and it is vital that spare capacity be communicated (together will skills, experience and availability) between teams. It’s important to make sure that it is in the interests of the ‘selling’ department and the ‘buying’ department to use each others’ staff.

Can you sell your consultants to other teams or departments in your organization?

• Short Days (over-ready acceptance of a client’s timetable)

It is reasonable to expect to work full days for clients (or, by arrangement, other portions of days) and it should be made clear to clients that the fee rates that are charged assume that efficiency.

Are your staff working full days or charging full days, or are they adapting too much to the convenience of your clients?

• Unsophisticated Contracts

Make sure that your contract stipulates very clearly the rules by which you work, or ensure that a separate ‘consulting charter’ establishes between you and your client your and their understanding of how you work together.

Are your contracts clear about how you charge your time? Minimum hours? Travel time?

• Multiple Short Assignments

You must balance your wish to provide an immediate and excellent service with your need to avoid switching too frequently from one task to another (and one place to another).

Are your staff rushing from one client to another in order to provide the best possible service, but wasting time whilst doing it?

• Inaccurate Time Recording

Make sure that it is in the interest of your staff as well as your organization that staff should report all the hours they work for a client. Reporting time and charging time are different issues. Professional staff must record the truth.

Are your staff telling the truth about time?

• Over-staffing and Insufficient use of External Staff

It is always better to have too much work than too little. When there’s too much to do, you can plan carefully to optimize deployment of staff. But always plan carefully and don’t sell false promises to clients in terms of delivery.

Try to have access to freelance staff who can be brought in to cover periods of too much demand.

Whilst we are all reluctant to fire experienced staff, don’t be too easily persuaded that ‘things will soon pick up.’

Do you have too many staff? You should be careful never to have quite enough.

• Inconvenient Project Dependencies

Scrutinize your consolidated project plans to avoid the risk of wasted time if tasks overrun and dependencies put you at risk. Keep thinking, What if…..?

Do your project plans take account of each other?

• Distant Deadlines

Do today whatever can be done today. As well as leaving space for different (more) work in the future, it also brings revenue forward, which is rarely a bad thing.

Do distant deadlines breed complacency?

• Inaccurate Estimates

Get better at estimating the time required for tasks. Getting this wrong can upset the entire team’s schedule.

Are your plans wrong?

• Unimaginative Approaches to Last Minute Deals

Whilst PSOs are not airlines and are not hotels, you still need to use some ‘revenue management’ techniques to sell empty time if you can. Bring work forward using various commercial techniques.

Are you being commercially astute in selling unallocated time?