Billable utilization is the most-watched number in agency operations. If a senior designer is available for 1,800 hours a year and bills 1,260 of them, utilization is 70%. Add overhead and target margin to that, and you can solve for the rate you need to charge.
Most agencies aim for 60–75% utilization for billable staff, with leadership and craft directors lower. Pushing above 80% sustainably tends to mean either burnout, scope creep that is not being billed, or under-investment in non-billable work like sales and craft.
The number is only useful when paired with realisation (how much of billed time actually gets paid for) and effective rate. Utilization on its own can hide an agency that is busy but unprofitable.
Before chasing the percentage upward, it is worth auditing where the non-billable hours actually go. A large part of the answer is retrieval — finding the deck from the last campaign, re-reading a year of email to recover what a client rejected in March — and that is the half of agency operations better information handling can genuinely remove.