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Jarmo Manninen & Muutosdraiveri Oy
The utilization rate of a company's personnel is not the same as the load rate
What is meant by the utilization rate of a person?
In general, the utilization rate refers to the part of the production capacity or other capacity that is currently in use. By monitoring the utilization rate of a company's personnel, the company can obtain useful information about how the company's personnel are being used. The utilization rate is often calculated so that during the monitoring period, the resource utilization rate is the working time used by the resource to perform work per the working time available for the resource to perform work. However, everything that is done in a company must aim to produce a result. This means that each resource in the company must do as much and as valuable work as possible, for which the customer is willing to pay the invoice. For this reason, in these blog posts and in the books I have written, the utilization rate monitors the working time used by the company's resources for billable work, and not the working time used by the resource to perform work in relation to the time available for the person to perform work. The price and amount of work that a person can invoice for is monitored by the monetary value that the person generates for the company, as I explained in my previous blog post. It is worth remembering that from the perspective of the company's results, all work done in the company that cannot be invoiced to customers is a cost in the company's results.
What is meant by a person's workload?
A company's person's workload refers to the ratio of a person's workload to the time available. It measures how much an employee is employed in relation to their working hours.
Especially in companies that do not achieve their financial goals, the company's personnel utilization rate is low and the workload is high. This is because the conditions for financial management in these companies have not been put in place and therefore financial management in these companies cannot be implemented in the right way.
Did the above things make you think?
I encourage you to share this blog post of mine on social media. If you have any suggestions for the topics of the next blog posts, I will gladly accept them.
I hope that you were interested in this matter and that you can continue to be involved.
I have written four books on creating the conditions for the company's financial management, and they are available in well-stocked bookstores and online bookstores in Finland, for example from BoD (Books On Demand) at:
https://kirjakauppa.bod.fi/catalogsearch/result/?q=jarmo+manninen
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