Utilization rate is a person's billable hours divided by their total workable hours. At an agency it's the single number that determines profitability. A wrongly built denominator makes a capacity that doesn't exist look real.
How the denominator is built
Annual workable hours come out of days actually worked, not calendar days. Three items have to be subtracted.
Paid annual leave. Under Article 53 of Turkish Labour Law No. 4857, this is at least fourteen days for tenures between one and five years.
National and public holidays. These days are listed in Law No. 2429, and the dates of religious holidays shift every year.
Sick and administrative leave. Use the previous year's average.
With those three subtracted, annual workable days drop to around two hundred. The denominator is built from there.
What billable hours don't include
The most common mistake at agencies is counting every hour spent on a client as billable. Proposal prep, business-development calls, internal training, and tooling setup are client work but never invoiced. These hours belong in workable hours, not in billable hours.
If utilization is below sixty percent, sales are short. Above eighty-five percent, the team is working at an unsustainable pace, and the first sign shows up in delivery delays.
The rate should also be measured per person. It's common for the team average to read seventy-five percent while one person sits at ninety and another at fifty. The average hides that imbalance, and turnover usually comes from the person at the high end.
Reading the rate weekly misleads too. A single week swings on leave, a holiday, or a delivery crunch. The number you can decide on is the rate measured over a period of at least four weeks.
Keeping the record in one place
This rate only comes out when time is logged per client and per project. The Kronos timer starts with a client and a project selected, and at period end you pull a client-broken-down report. The logic of a separate board, channel, and file folder for each client is laid out on the Agencies page.
Here's the limit: Kronos produces the breakdown but doesn't cut the invoice or connect to accounting software. Turning the breakdown into an invoice stays a separate step.
How the number of open items affects delivery time sits in the work-in-progress breakdown.
FAQ
What should utilization rate be? For service agencies, a workable band is between seventy and eighty percent. The lower bound points to a sales problem, the upper bound to burnout.
Are billable hours and worked hours the same thing? They aren't. Proposal prep, internal meetings, and training count as worked hours, not billable hours.