Capacity is not utilisation

Two numbers, two different moments

Capacity answers a forward question: how many hours can your team give next week? You work it out from the expected working day, minus approved leave and company holidays.

Utilisation answers a backward question: of the hours you had, how many went into logged work? You work it out from timesheets once the days are done.

Both are measured in hours, which is why people swap the words. But you plan with capacity and you learn from utilisation. Use one number for both jobs and your plan simply repeats last month.

A worked example with five people

Take a team of five on an eight-hour day, over one five-day week. That's 200 hours before anything else happens.

One person is on leave for three days, which removes 24 hours. Your capacity for the week is 176 hours.

You allocate 170 of those hours to client and internal projects, so your plan uses almost all of what's there. At the end of the week the team has logged 150 hours. Your utilisation is 150 over 176, or about 85%.

Now compare the plan to the record. You planned 170 hours and 150 were logged. That gap of 20 hours is the most useful number on the page, and neither figure shows it on its own.

What the gap between them tells you

A plan that runs ahead of the record, week after week, usually means your estimates are optimistic or unplanned work is eating the week. Support calls, reviews and interviews all take hours nobody allocated.

A record that runs ahead of the plan means people are logging more than you asked for. Sometimes that's a deadline. When it repeats, someone is working past their expected day and your plan can't see it.

Read the gap per person as well as per team. A team total can balance out while one person runs over and another sits under.

Why planning to 100% of capacity fails

Capacity is the ceiling, and a plan that fills it leaves no room for the work nobody scheduled. Every team has some, and it's rarely the same size two weeks running.

Keep a margin between your allocation and your capacity, and set it from your own record. If your last few months show a steady gap between planned and logged hours, that gap is roughly the margin your next plan needs.

Keeping both numbers on one record

PeopleMuster holds planned hours on its capacity grid, person by day, with a monthly total for each person. Bands for under, partial, full and over follow the expected working day you set. Approved leave shows as L and company holidays as H, so capacity drops on the right days without anyone editing a sheet.

Logged hours come from the daily recap, where each person records their day against the projects they worked on. Your utilisation report reads those entries and shows total hours, a utilisation percentage and a weekly trend, split by project and by department.

Both sit on the same people and the same projects. Group your grid by users or by projects and filter to billable or non-billable work. Now you're comparing plan and record for the same slice of the team.