MSP Utilisation Targets: What 70% Really Means

“Your utilisation is only 68 percent this month.” At an MSP, that sentence can sound like a performance warning. Sometimes it is. Often it is a capacity-planning problem presented as an individual failure.

Utilisation is the share of recorded work time that an MSP classifies as billable or chargeable to a client. The metric matters because it connects staffing to revenue. It becomes misleading when the target ignores meetings, queue waiting time, documentation, training, internal projects, travel, rework, and after-hours support.

The number is not the workload. It is a model of the workload.

The Basic Calculation

The simple formula is:

Utilisation = billable hours ÷ available paid hours × 100

For a 38-hour week and a 70 percent target:

38 × 0.70 = 26.6 billable hours

That leaves 11.4 hours for everything the MSP does not classify as billable. Those hours may need to cover:

• Team meetings and one-to-ones
• Timesheets and ticket administration
• Internal documentation and process work
• Training and certifications
• Leave and public holidays across a measurement period
• Travel and site access time
• Presales, estimates, and project planning
• Queue waiting time or low ticket volume
• Technical debt and internal maintenance

If those activities regularly exceed 11.4 hours, the target is mathematically incompatible with a 38-hour week unless some of the work is reclassified or performed outside paid time.

What Utilisation Targets Usually Hide

Two MSPs can publish the same 70 percent target and create completely different jobs. Ask what the denominator and numerator include.

Work type	Usually billable?	Common problem
Client project delivery	Yes	Estimate may be too low for the actual scope
Ticket resolution	Often	Some contracts include support in a fixed fee, but the time is still tracked as “non-billable”
Client meetings	Depends	Account and project meetings may be excluded despite being required work
Documentation	Depends	Engineers are asked to document, but the time is not scheduled or credited
Training and certification	Rarely	The MSP wants the skill but treats learning time as overhead
Internal meetings	No	Large meeting load makes a high target harder to reach
Presales and proposals	Depends	Senior engineers may carry revenue work that sits outside their target
On-call incidents	Depends	After-hours work may be missing from the same report used to judge performance

A target without a written classification policy is not a clean metric. It is a negotiation that happens every time a timesheet is reviewed.

Calculate the Real Weekly Requirement

Start with the work that your role requires, not the target your manager quotes.

Weekly activity	Hours
Paid hours	38.0
Team and client meetings	4.0
Ticket administration and timesheets	2.5
Documentation and internal process work	2.0
Training and mentoring	2.0
Unplanned support and interruptions	2.0
Available for billable work	25.5

In this example, 25.5 hours is the practical billable capacity before leave, travel, or on-call work. A 70 percent target demands 26.6 hours, so the target is already 1.1 hours above the available capacity.

That does not prove the target is impossible. It identifies the question that needs an answer: Which required activity should move, shrink, or count as billable?

Use the MSP Utilisation Rate Calculator to model your own numbers, then keep the underlying evidence.

Role Changes the Meaning of the Number

A utilisation target should reflect the job you actually perform.

Service Desk Engineers

Service desk work can support high utilisation when the queue is consistently full and tickets are tracked against a client agreement. The risk is that speed becomes more important than quality. Reopened tickets, rushed notes, and avoidable escalations can make the metric look good while increasing total cost.

Project Engineers

Project engineers may have a clearer billable path, but project pauses, client approvals, procurement delays, and scope changes are not always under their control. A target should account for the time required to plan and document delivery.

Senior Escalation Engineers

Senior engineers are often pulled into incident response, presales, design reviews, mentoring, and quality control. Their technical work may prevent future tickets without producing a clean billable line. A target copied from a junior project role is usually a bad fit.

Team Leads and Service Managers

Leads carry scheduling, coaching, reporting, hiring, and client relationship work. Treating those responsibilities as personal underutilisation creates a perverse incentive: abandon team leadership to protect a spreadsheet score.

Internal Platform and Automation Engineers

Automation, standardisation, and tooling can reduce future ticket volume. Those engineers may produce high business value while showing low client utilisation. Measure the savings and service improvement, not just hours on a ticket.

The Difference Between Capacity and Performance

A low utilisation result can have at least five different causes:

1. Insufficient demand: There are not enough suitable client tasks.
2. Poor scheduling: Work exists, but nobody routes it to the right person.
3. Blocked delivery: Approvals, access, vendors, or procurement hold up work.
4. Classification error: Required work is recorded as internal or non-billable.
5. Performance issue: The person has work but does not complete it effectively.

Only the fifth category is primarily an individual performance problem. A mature MSP checks the first four before putting an employee on a performance plan.

How High Targets Create Bad Behaviour

Pressure around utilisation can cause people to optimise the metric rather than the service:

• Splitting one piece of work into multiple tickets
• Recording routine internal work against a client without a valid basis
• Avoiding documentation because it does not count
• Delaying escalation until a target is protected
• Working through breaks or after hours without recording the time
• Closing tickets before the underlying problem is resolved
• Accepting work that belongs to another team

These behaviours produce unreliable data. They also increase operational risk and reduce trust between engineers, managers, and clients.

A Better Review Conversation

Bring a four-week record to the discussion. Track:

• Paid hours and leave
• Billable hours by client and work type
• Meetings and internal obligations
• Waiting time caused by approvals or access
• Rework and reopened tickets
• On-call hours and after-hours contacts
• Training, mentoring, presales, and automation
• Work declined or unavailable because of scheduling

Then ask specific questions:

• What counts as billable for this role?
• Which required activities are included in the target’s non-billable allowance?
• How are leave, public holidays, training, and on-call time normalised?
• How does management adjust for low demand or blocked work?
• Is quality measured alongside utilisation?
• What target applies to the actual responsibilities in the position description?

A strong answer includes definitions, data, and a process for correcting errors. “Everyone has the same target” is not an explanation when everyone does not have the same job.

Utilisation Is a Business Metric, Not a Personal Identity

A high utilisation number does not automatically mean a profitable or healthy service. The MSP also needs to measure:

• Gross margin by service and client
• First-time resolution and reopen rates
• SLA performance and customer outcomes
• Engineer turnover and absence
• Documentation coverage
• Automation and self-service impact
• Unplanned overtime and on-call load
• Revenue leakage caused by poor time capture

Use utilisation as one signal in a balanced scorecard. When it becomes the only number that matters, the service eventually pays for the distortion through rework, burnout, and attrition.

Related Reading

• MSP On-Call Impact Calculator
• On-Call Pain Calculator
• Australian IT Salary Guide 2026: MSP Edition
• MSP Service Delivery Metrics
• MSP Work Life Balance
• How to Negotiate a Raise at an MSP