Good staffing capacity utilisation ensures that you do not face understaffing or overstaffing. The result is that production flows are deployed optimally, with the right amount of people in the right place. And that, in turn, is good for the company’s bottom line. What are the risks of under- and overstaffing, and how do you determine the right level of capacity utilisation? We will explain in more detail!
What is occupancy rate?
Capacity utilisation is the degree of production capacity utilised during a given period. It is expressed as a percentage from 0% to 100%. The ideal utilisation rate is 100%, although in practice this is unlikely to be the case. You can face underutilisation and overutilisation. Through good Workforce Management software, you can organise and optimise capacity utilisation as best as possible.
What is underutilisation?
Underutilisation means that there is more work than staff. In other words, there are too few employees to do the work. This can come from poor planning and sick employees (or from not being able to get staff). Structural understaffing leads to high workload, which in turn can lead to absenteeism (burnout). This ultimately hits the bottom line, which is why understaffing should be avoided as much as possible.
What is overstaffing?
Are there too many employees for the tasks? Then overutilisation is precisely what happens. For a short period of time, this is often not so bad, because overdue jobs can be cleared and stock can be built up. In contrast, structural overstaffing carries risks. Employees get bored, and as an employer you pay unnecessarily high personnel costs. That makes overstaffing undesirable.
How to calculate capacity utilisation?
To calculate staff utilisation, you need two values. The planned hours and the hours needed to meet the desired capacity and quality. Then you do the following calculation, which is more optimal the closer it is to 100%.
(planned hours / required hours) x 100 = utilisation rate (%)
Using capacity utilisation in staff planning
As you have read, it is important to aim for an optimal utilisation rate. This is harder said than done, because sometimes you have to deal with unexpected factors. For instance, there may suddenly be a peak or quiet period, employees may want a holiday during an undesirable period or they may fall ill (unexpectedly) for an extended period. Fortunately, there is something you can do!
Based on historical data from the past, it is possible to make predictions. Based on a Workforce Management System, you know how to predict peak and off-peak times based on past data. And so you know when it is time to bring in extra staff and when that week off is just right.
Optimal utilisation with Dyflexis forecasts
Making such predictions (forecasts) is difficult without proper registration. It is therefore smart to use planning and capacity management software. Such a system records everything for you, from leave requests to illnesses, peak moments in the past, et cetera. This information serves as the basis for creating a staff schedule with the ideal capacity utilisation.
Dyflexis offers an efficient personnel system, which can help determine the ideal occupancy rate.
