Phillips J. Diaz-Vicioso, LL.M.
April 25, 2023
The utilization rate is a concept widely used in the business world to measure the efficiency of employees in completing their daily tasks. This term refers to the proportion of working time that an employee dedicates to productive tasks and provides an important indicator of an organization's performance.
For many successful companies, meeting SLAs (Service Level Agreements) is essential to maintaining customer satisfaction and ensuring business continuity. To achieve this, one of the most effective strategies is to maximize employees' utilization rates.
In an 8-hour workday, employees are expected to dedicate at least 85% of their time to productive tasks. This means that out of 8 hours of work, at least 6 hours and 48 minutes should be devoted to production-related tasks, while the rest can be used for breaks, answering emails, attending meetings, among other activities.
However, it's valuable to consider that burnout is a real risk for employees who consistently work under a high workload. To mitigate this risk, many successful companies also implement 15% free time distributed throughout the workday. This free time can be used for rest activities, breathing exercises, meditation, among other activities that help employees disconnect from work and recharge.
Companies that implement these practices can increase their productivity by 20-25% and reduce absenteeism by 40%.
According to a study conducted by the consulting firm McKinsey & Company, companies that maximize their employees' utilization rates and provide them with free time for rest can significantly improve their performance. In particular, the study found that companies that implement these practices can increase their productivity by 20-25% and reduce absenteeism by 40%.
Additionally, another study by Stanford University found that productivity significantly decreases after working more than 50 hours a week, suggesting that maximizing the utilization rate and providing free time during the workday can also be beneficial for employees' mental and physical health.
In conclusion, maximizing the utilization rate and providing free time during the workday can be an effective strategy for achieving SLAs and improving performance in companies. The mentioned studies recommend that this practice can improve productivity, reduce absenteeism, and be beneficial for employees' mental and physical health. Therefore, companies should seriously consider this practice as a way to improve their performance and keep their employees happy and healthy.
By Phillips J. Diaz-Vicioso, LL.M.
Sources:
McKinsey & Company. (2020). The productivity secret: Maximizing utilization.
Stanford University. (2014). Working long hours increases your risk of stroke, study shows.