How to calculate it
Utilization % = billable hours ÷ paid hours × 100
Some businesses use available hours instead of paid hours as the denominator. Pick one definition and keep it, or the number cannot be compared month to month.
Example
Illustrative numbers only. A technician is paid for 40 hours in a week and 26 of them are billed to customers. Utilization is 26 ÷ 40 = 65%. The other 14 hours went on driving, loading, admin and gaps in the schedule.
Reading it sensibly
A low figure points at scheduling, routing or demand rather than at the technician. A figure near 100% leaves no room for travel, emergencies or training and tends to cost quality. The useful question is what is filling the non-billable hours and whether any of it can be reduced.
Why it matters
Utilization is the same idea as the billable hours behind your hourly rate, measured as a performance number. Because each paid hour has a fixed cost, a few points of improvement lowers the cost of every billable hour.
Related
Definitions here are general and educational. Exact meanings can vary by trade, region, and software.