Labor Utilization and Service
Labor utilization is the total field hours worked divided by the total hours billed. This percentage should be above 90% consistently. This means that 10% of the hours you paid were non-billable and conversely 90% of the hours paid were billable to customers.
Unbilled hours arise from warranty calls, call backs, billing adjustments, vehicle maintenance, warehouse time and estimating time. Labor utilization is an important management tool allowing managers to identify how time is being used and to make adjustments.
For example:
- If the time spent on call backs is high, then there may be a quality and supervision issue
- If hours are attributed to billing adjustments, it may indicate a scheduling and dispatch inefficiency resulting in travel time that cannot be invoiced.
Training techs to make sure Job Tickets show all the time spent on a job is critical; the tech should be doing his paperwork on the clock, not after he has checked out of the facility. These procedures and the proper training of service techs can make a dramatic difference in profitability.
By using Centerpoint Connect’s Service module, the process of managing time becomes less complex. Reporting features and visibility are key to tracking labor utilization.
