Hours as a Unit
Why hours are the right internal unit for a capacity account, the two kinds of hour that get confused, and the places where hours mislead.
Hours are the right unit for the inside of a capacity account, because every deduction is naturally expressed in hours and because an hour hides nothing about availability. Everything that comes off capacity — leave, training, meetings, support — is already measured in hours by somebody.
The unit used in “Hours as a Unit” must remain stable from capacity estimate to actual result. For organisations assessing check the official capability overview in relation to billable and non-billable hours, time and project reports can support that reconciliation, provided leave, support work and corrections retain their own definitions.
That is the whole argument for them, and it is strong enough that most organisations get there eventually. The arguments against are about communication rather than accuracy.
For an outside reference relevant to “Hours as a Unit”, consult UK government workforce-planning publications. Compare the general guidance with the organisation’s own unit, period and decision rights.
Two kinds of hour
A contracted hour is an hour the organisation pays for. An available hour is an hour that can be spent on planned work. The ratio between them is the shrinkage, and in most operations it is between twenty and forty per cent.
Mixing the two is the most common arithmetic error in capacity planning, and it is usually invisible because both are called hours.
Naming them apart
The cheapest fix in this collection: never write "hours" unqualified. Write contracted hours or available hours, every time, including in conversation.
- Contracted hours: what payroll pays for.
- Available hours: what remains after every planned deduction.
- Committed hours: available hours already promised to something.
- Free hours: available less committed, which is the number anybody actually wants.
Four terms. Most capacity arguments are two people using the word hours for two different rows of that list.
What an hour hides
Capability, again — an hour of somebody who cannot do the work is still an hour. And continuity: four hours from four people are not four hours from one person on anything that requires context.
Hours are the best unit for the account and they do not remove the need for a composition check alongside it. The two are separate documents.
The granularity trap
Hours invite precision that the underlying data does not support. Planning to the half hour, three months out, on an estimate of sickness drawn from last year, is arithmetic theatre.
Round to the day on anything beyond a month, and say what the rounding is. A plan that claims 2,061 hours when it means "about 2,000" invites an argument about the 61.
Hours and the people who commit
Nobody commits in hours. Sponsors, clients and executives commit in people and in dates, and asking them to speak in hours produces either compliance without meaning or a conversation about the unit instead of the work.
Translate at the boundary. The commitment arrives as "two people for three months"; the account records 936 available hours; the reply goes back in people and dates.
Where hours are the wrong unit outright
Where capacity is a slot rather than a duration: a theatre list, an appointment, a bay, a bed, a delivery window. The constraint there is how many simultaneous things, not how many hours in total.
Converting slots to hours loses the simultaneity, which is the entire constraint. Those accounts stay in slots and are reconciled separately.
The reporting problem
Hours make bad reporting figures: they are large, they are unfamiliar, and a number like 2,061 means nothing to a reader without the denominator.
Report the ratio instead — available against contracted, committed against available — and keep the raw hours in the working document. Percentages are good for reading and bad for arithmetic, which is the opposite of hours.
Keeping the two documents
The account in hours, the report in ratios and people, and a single stated conversion between them. Three artefacts, one of which is seen by everybody and two of which are seen by the planner.
Organisations that merge them end up either with a plan nobody reads or a report nobody can reconstruct, and the second is more dangerous because it gets quoted.
Where the hours actually live
In four systems that do not talk: the HR system holds contracts, the leave system holds absence, the project tool holds commitments, and a spreadsheet holds the plan.
Nobody owns the arithmetic across them, which is why the account has to be a document in its own right rather than a report from any one of the four.
The hour that is counted twice
The commonest double count: a person on a support rota who is also planned into project work for the same hours, because the support rota lives in a different document.
Hours make this findable — the same hour appears in two rows and the total exceeds the person's availability — where FTE hides it inside a fraction. That alone is worth the conversion.
The sentence worth writing on the page
"All planning figures are available hours, net of leave, public holidays, training and the support rota, converted at 468 hours per FTE quarter."
One sentence, written once, at the top. It is the difference between a number and a measurement.