A good utilization rate for an architecture firm is roughly 60% to 65% of all paid hours charged to projects, firm-wide. Deltek Clarity 2026 puts the average for A&E (architecture and engineering) firms at just under 60%. That firm-wide number hides a wide spread by role: principals at 40% to 55%, project managers at 65% to 75%, project architects at 75% to 85%, and production staff at 85% to 90%, per the rules of thumb PSMJ Resources and Deltek have published for years.
If your firm-wide number is 58%, you are normal. If it is 72%, either nobody is selling or somebody is padding.
How does an architecture firm calculate its utilization rate?
Utilization is chargeable hours divided by total hours. The argument is always about the denominator. Three versions are in use, and they give different numbers for the same week.
- Total paid hours. All 2,080 hours a year, including PTO (paid time off), holidays, and sick time. Closest to the chargeable ratio Deltek Clarity reports; use it for benchmarking.
- Available hours. Paid hours minus holidays and PTO, roughly 1,850 to 1,900. The same work reads several points higher, which is why some firms prefer it.
- Hours actually worked. Including overtime. This one flatters busy firms and hides the overtime problem.
Pick one and use it consistently; the trend matters more than the level. And when you compare against a benchmark, use its denominator: a firm running 66% on available hours is running about 60% on paid hours, which is average.
The numerator has its own trap. Chargeable means charged to a project, whether or not the fee has any room left. Hours on a fixed-fee project that is 30% over budget are still chargeable. They are also worthless, which is why utilization is never read alone.
What utilization rate should each role hit?
The role targets below come from PSMJ and Deltek guidance and have been stable for a long time. Treat them as ranges, not grades.
| Role | Target utilization | What the non-chargeable time is for |
|---|---|---|
| Principals | 40% to 55% | Selling, client relationships, QA (quality assurance) review, mentoring |
| Project managers | 65% to 75% | Staffing, invoicing, proposals, internal coordination |
| Project architects | 75% to 85% | Standards, mentoring, some BD (business development) support |
| Production staff | 85% to 90% | Training, firm meetings, PTO |
| Firm-wide | 60% to 65% | The blend, including admin and marketing staff at 0% |
Two things fall out of the table. The firm-wide number depends on the shape of the firm: 30 people with three principals blend higher than six people with two. And the production target is not 100%; a firm that expects 95% from staff is telling them to skip the training and the firm meeting.
Why shouldn’t principals hit 80% utilization?
Because a principal at 80% is doing a project architect’s job at a principal’s cost, and nobody is doing the principal’s job.
Here is how it plays out. A 12-person firm has two principals. Work is heavy, so both dive into production and run 85% for two quarters. Meanwhile no proposals go out, the lukewarm leads never get a call, and sets go out without a senior review because the senior reviewers were drawing. Nine months later the backlog is gone. The AIA (American Institute of Architects) and Deltek Architecture Billings Index leads nonresidential construction spending by roughly 9 to 12 months; in our experience, principal utilization leads a firm’s backlog by about the same.
There is a cost argument too. On a fixed fee the client is not paying more for principal hours, so every principal hour on a door schedule is a project architect hour that would have cost the firm far less, and principal hours are the ones most often written off at invoice time anyway. The right pattern is principals at 40% to 55%, spent on the parts only a principal can do: client meetings, design direction, the review before permit. If your principals sit above 60% for long, the fix is usually a hire or a promotion, not a lecture about selling.
Is a higher utilization rate always better?
No. Utilization measures how busy people are, not whether the firm is making money. The number that connects busy to money is the multiplier.
Deltek Clarity 2026 treats a net labor multiplier (net revenue divided by direct labor cost) of 3.0 or higher as the high-performer mark, puts median overhead at about 161% of direct labor, and puts operating profit on net revenue at 16.7%. The break-even math in the AIA Handbook of Professional Practice says a firm with 160% overhead needs a 2.6 multiplier just to cover its costs. Now compare two firms.
- Firm A runs 70% utilization at an effective multiplier of 2.4. Everyone is busy, every project is over budget, and the firm loses money on each additional hour.
- Firm B runs 60% utilization at an effective multiplier of 3.2. Less frantic, and profitable.
Firm B wins and it is not close. High utilization with a low multiplier usually means fixed fees burned by rework, unbilled revisions, and CA (construction administration, the phase after the permit when the building gets built) running long; the reasons architecture projects run over budget are usually the reasons utilization looks fine. Raising utilization on those projects makes the loss bigger, faster.
Utilization also has a human ceiling. Sustained 90%-plus on production staff means skipped reviews and 50-hour weeks entered as 40, and the turnover that follows costs more than the five points ever earned.
How do you raise utilization without burning people out?
Go after the non-chargeable buckets, not the people. The fixable time usually sits in three places: unassigned hours between projects, internal meetings that could have been a message, and admin a PM (project manager) does because nobody else was told to.
The arithmetic is worth doing once. Ten technical staff at 2,080 paid hours is 20,800 hours; moving from 58% to 63% utilization is 1,040 more chargeable hours a year. At a direct labor cost of, say, $45 an hour and a 3.0 multiplier, that is roughly $140,000 of fee capacity, provided the backlog exists to absorb it. If it does not, you have added 1,040 hours of overrun to projects you already have: the Firm A problem again.
Confirm the backlog first, then assign the hours. A weekly resource plan (the capacity heatmap post shows one) puts everyone’s next 12 weeks on one grid, so gaps and overloads are visible on Monday rather than at quarter end. Most utilization gains come from filling gaps, not squeezing weeks.
What should you do with the utilization number each month?
Read it as a trend, by role, next to two other numbers. Alone, utilization says people were busy. Next to effective multiplier, it says whether the busy was worth it. Next to backlog, whether it will last. The post on firm-health metrics covers the full set.
The monthly routine takes 20 minutes. Pull utilization by person for the trailing three months. Flag anyone more than 10 points off their role target in either direction. A production person at 70% needs work assigned. A principal at 75% needs work taken away. A PM at 90% is not managing anything. Have each conversation before the month closes, not at review time.
The number to remember is 60% to 65% firm-wide, with roles spread from the low 40s to the high 80s. Land there with a multiplier near 3.0 and the firm is healthy; land there with a 2.4 multiplier and the utilization number is telling a comforting story about a firm that is quietly losing money.
AECPulse Project Manager reports utilization by role against the targets you set, weekly rather than at quarter end, so a principal drifting toward 80% shows up while there is still time to hand the work off.