Utilization is the number hiding inside your labor rate. When an owner says "we're busy but not making money," low utilization is one of the first places to look: the techs are paid all week, but too few of those hours turn into work a customer pays for.
Utilization in plain English
Take an example electrician paid for 40 hours this week. Here is where the time went:
| Example week | Hours | Billable? |
|---|---|---|
| On site, working on customer jobs | 26 | Yes |
| Driving between jobs | 7 | No |
| Supply house and parts runs | 3 | No |
| Shop, meetings and paperwork | 3 | No |
| Waiting (customer late, gaps in the board) | 1 | No |
| Paid hours | 40 |
Twenty-six billable hours out of 40 paid is 65% utilization. The other 14 hours still cost wages, payroll taxes and benefits.
How do you calculate utilization?
Metric
Technician utilization
The share of a technician's paid hours spent on billable work for customers.
Billable hours ÷ paid hours × 100
Where the numbers come from: Paid hours from timesheets; billable hours from on-job time on completed jobs.
Two decisions shape the number, so make them once and write them down:
- What counts as billable. Most shops count on-site time on customer jobs. Some count diagnostic time on jobs that didn't sell; others don't. Callbacks are usually on site but not billable.
- What counts as paid. Use hours actually paid, including overtime hours, from payroll, not scheduled hours.
Why drive time matters so much
Federal rules say travel from job site to job site during the workday must be counted as hours worked.1 So drive time is paid. Unless you bill it, it is also the biggest single drag on utilization for most service techs.
Why utilization sets your labor rate
Your hourly price, or the labor portion of a flat-rate price, has to cover a tech's whole paid week from only the billable hours.
Labor cost per billable hour
In June 2026, private employers paid $49.01 per hour worked in total compensation for installation, maintenance and repair occupations.2 Using that as an example loaded cost:
$49.01 per paid hour ÷ utilization. Before overhead, materials and profit.
| 50% | $98.02 |
|---|---|
| 60% | $81.68 |
| 65% | $75.4 |
| 70% | $70.01 |
| 80% | $61.26 |
Dropping from 70% to 60% utilization adds about $11.67 of labor cost to every billable hour. If prices were set at 70%, that difference comes straight out of margin. The labor rate calculator builds a full rate from your own numbers.
Utilization vs productivity vs efficiency
| What it compares | What it tells you | |
|---|---|---|
| Utilization | Billable hours ÷ paid hours | How much of the paid week went to customer work |
| Efficiency | Hours sold or allowed ÷ hours actually worked | How fast the tech works against the book |
| Productivity | Output (revenue or jobs) per hour | How much each hour produces |
The Bureau of Labor Statistics defines labor productivity as output per hour,3 which is a different idea from utilization. The three multiply together and get gamed in different ways; utilization, productivity and efficiency explains how, with a three-tech worked example.
What moves utilization
| Lever | Why it works | How to check |
|---|---|---|
| Routing and zoning | Less paid drive time per job | Drive minutes per job, by tech |
| Truck stock | Fewer supply-house runs mid-day | Unplanned stops at supply houses |
| First-time fix | Return trips are paid but rarely billable | Return trips per 100 jobs |
| A full, realistic board | Fewer gaps between jobs | Idle time between status changes |
| Accurate time capture | Billable time isn't lost to bad data | Jobs with missing arrive or complete times |
Watch for gaming. Utilization rises if techs stretch jobs to fill the day, so read it alongside revenue per hour and callbacks, never alone.
How do you measure utilization without a spreadsheet war?
Most arguments about utilization are really arguments about the data. A tech who forgets to tap "arrived" loses billable time on paper; a tech who taps "completed" from the driveway an hour later gains it. Agree on a few rules first:
- One source for paid hours. Approved timesheets, the same ones payroll uses.
- One source for billable hours. On-job time from job status changes on completed, paying jobs.
- Weekly, not daily. One long install or a sick day swings a single day's number. A week or a pay period evens it out.
- By tech and by business unit. Service, install and maintenance work have very different drive patterns, so compare like with like.
Before you report utilization
- Write down what counts as billable, including diagnostics and callbacks
- Use paid hours from approved timesheets, not schedules
- Check for jobs with missing arrive or complete times
- Compare each tech with the same type of work
- Compare the shop number with the utilization your labor rate assumes
How utilization shows up in TradesWork
In TradesWork, timesheets record drive and on-job time automatically from job statuses: en route starts drive time, arrived starts on-job time, completed ends it. Clock codes cover shop, training and breaks. That gives you paid hours and on-job hours from the same records, without a separate spreadsheet.
When the AI dispatcher proposes a plan, it shows drive minutes and utilization before and after, so a dispatcher can see what a change would do to the day before applying it. Related: billable hours.
Footnotes
-
29 CFR 785.38, Travel that is all in the day's work, Code of Federal Regulations, via Cornell Legal Information Institute. ↩
-
Employer Costs for Employee Compensation, June 2026, Table 4, U.S. Bureau of Labor Statistics. Private industry, installation, maintenance and repair occupations. ↩
-
Productivity glossary, U.S. Bureau of Labor Statistics. ↩
