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Maximizing People Utilization: A Lean and HR Perspective


Maximizing People Utilization: A Lean and HR Perspective

“We paid a lot for this equipment, so we want to make sure we get Utilization and our Return On Investment (ROI).” The CFO just purchased a new, expensive Lexus. I asked him if he was going to drive the car around the block tonight in order to get “utilization” and “ROI” out of his new vehicle. (Great quote from Mark DeLuzio) This mindset is common when discussing machines, but it becomes problematic when we apply it to people.

Take a company that expects its staff to work 40 hours a week, with 80% of that time being billable. That leaves only 20%—8 hours per week—for important activities like training, personal development, team-building, and reflection. In reality, this means that any given project will only get 4 hours of focused effort each week, limiting the ability to make substantial progress despite employees being at their desks all day.

This approach often stems from a desire to “maximize utilization” of staff, similar to how we might treat machines. But here’s the difference: while we don’t push our cars to the limit every day, we tend to expect employees to work relentlessly without considering the long-term impact. This is where Lean principles and HR best practices come into play.

Lean Principles Perspective:

From a Lean standpoint, this constant pressure to maximize billable hours leads to “Muri” (overburden), a key waste in Lean thinking. By overloading employees with billable work, companies introduce stress and burnout, which erode long-term productivity and increase turnover. Lean emphasizes reducing waste, and overburdening staff only creates inefficiency and wasted resources in the form of high turnover costs and disengagement.

Furthermore, Lean is built on continuous improvement (Kaizen). If employees have no time to reflect, learn, or suggest improvements, the company misses out on potential efficiency gains and innovation. This also contradicts Lean’s core value of “Respect for People.” Overworking employees without considering their well-being not only undermines their health and morale but also hampers collaboration and growth—ultimately stunting organizational progress.

HR Perspective:

From an HR perspective, pushing for 80% billable hours and leaving minimal time for development is a surefire way to demotivate and burn out employees. Employee engagement suffers when people feel they are just resources to hit a target, rather than valuable contributors to the organization’s success. Organizations that don’t provide opportunities for personal growth and development risk losing their top talent to competitors who invest in their employees’ well-being and skills.

A lack of work-life balance is another key issue. Overloading employees with billable work while denying them time for reflection, learning, and recovery leads to physical and mental health issues, absenteeism, and a sharp drop in morale. HR best practices highlight the importance of maintaining a balance between work and personal growth, which in turn boosts employee satisfaction, productivity, and retention.

Finally, the pressure to maintain high billable hours undermines the positive organizational culture that businesses strive to build. When employees are expected to be 80% billable all the time, the culture shifts from one of collaboration and trust to one of transactional relationships, where people feel like mere cogs in a machine.

A Balanced Approach:

Rather than pushing employees to their limits for the sake of utilization, companies should strive for a balance that fosters sustained performance. A growing body of research suggests that a four-day workweek can actually boost productivity by allowing employees more time to reflect, relax, and invest in personal and professional growth. This not only increases the effectiveness of their billable hours but also leads to long-term engagement, job satisfaction, and retention.

Maximizing people’s utility isn’t about squeezing every last drop of time out of them; it’s about creating an environment that supports their well-being, encourages continuous improvement, and nurtures long-term success. Just as we wouldn’t drive our cars to exhaustion every day, we shouldn’t treat our employees the same way. Instead, let’s prioritize a sustainable and balanced approach that enhances both individual and organizational performance.