Are you struggling to manage your resources and make the most out of your billable hours?
You’re not alone. As the leading resource-allocation platform, we spend a lot of time researching the best ways you can manage your team’s skills needed to complete the project at hand. That means we can help.
Some 83% of the resource managers we questioned agreed that putting the right resources in the right place while keeping the team morale up is a challenge in their organization. If you have that feeling, too- it’s time to revisit your approach to resource allocation in a project.
This resource allocation guide will help you understand what resource allocation is and how you can do it effectively. Ideally, this would help you take all the unnecessary stress out of your projects and help you plan ahead in a strong, clear, and comprehensive fashion.
What is human resource allocation?
We’ll start by saying that employees aren’t the resource type. Budget, technology, equipment, time, and space – are some other examples of resources, nonhuman resources. The resource allocation definition is rather simple, according to Britannica, allocating resources means “apportioning productive assets among different uses.”
In the context of human resource management, allocation refers to a company’s assigning work to its employees. Allocating people can become an issue because people are limited resources, whereas human expectations in project planning are usually unlimited and tend to expand.
The benefits of resource allocation
The optimal resource allocation brings a lot of benefits to the business:
- Optimizes the workload of team members. A bold team setup gives an overview of the available workforce capacity and shows how much work can be done.
- Improves time management. Proper resource allocation helps resource managers estimate the actual hours to complete the tasks.
- Increases employee engagement and satisfaction. A robust resource allocation is done with people, their needs, and their talents in mind. By finding suitable projects for people’s skills, you’ll gather a dream team of passionate professionals who drive the company forward. That’s why, according to TechJury and Smarp, companies with a high level of employee engagement are more profitable by a factor of 21%.
- Eliminates project risks. Motivated team members meet deadlines more frequently and increase their projects’ success rates. Add up the planned team workload and refined time management system, et voilà! You’re ready to identify risks early on in your project and manage them effectively.
- Identifies and eliminates the skills gaps. A strategic resource allocation involves skill gap analysis, which gives insights into the company’s entire workforce and enables to target the resources on those skills that require the most attention for the organizational needs.
- Simplifies planning for upcoming projects. Optimal use of project resources is key to closing the skills gap and avoiding talent shortage. Having this powerful data in their hands, managers can efficiently steer the workforce planning toward the company’s future business needs.
- Increases ROI. Employee rotation and upskilling are more cost-efficient than hiring new people for every project. Suppose workplace learning and resource management are not done consistently. In that case, resource managers can face talent shortage and fail the project timelines, budget, or even the project delivery altogether.
- Results in a better brand positioning. Happy team members strengthen the employer brand in the eyes of both the customers and potential recruits.
What are the resource allocation methods?
In project and operations management, effective resource allocation methods are essential for success. Key methods include the Critical Path Method, which prioritizes tasks to optimize timelines; the Critical Chain Method, which accounts for resource limitations and multitasking; Resource Leveling, which adjusts schedules based on resource availability; and Resource Smoothing, which modifies resource allocation while adhering to time constraints. These resource allocation methods can be combined and supported by resource management plans, software, visuals, and careful consideration of potential shortcuts.
Common resource allocation problems and how to fix them
Let’s look at typical pitfalls in resource allocation and discuss their solutions.
Pitfall 1: Incorrectly assigning the project tasks
Don’t fall into the trap of assigning tasks based only on resource availability. This data is not enough to ensure the team will do the job well and timely.
Know your resource pool. It’s hard- and soft skills. Most resource managers keep track of people’s most developed skills and assign them tasks on this basis.
It’s critical to get a picture of every person’s skill set to assign and share the same resources among projects effectively. This way, you can see that you’re utilizing the team with their strength in mind.
Make skills assessments more frequently and objectively. Don’t rely solely on self-assessment tests for employees.
Use resource allocation software that automatically tracks and updates every team member’s skills. It will save you time and help improve resource allocation with accurate and consistent data.
Pitfall 2: The project scope creeps
Project scope creep occurs due to poor project planning or sudden changes in the scope of work. For example, the client may ask to add an extra minor feature, and the manager has to ensure that there’s enough flexibility in project schedules to account for these changes.
When planning the best scenario, create a backup plan and procedures for the project team.
Make sure that people inform you about all the significant changes. Ask them to deliver a document that will outline all these changes so you have it in writing. This would also save time employees spend on reporting.
After receiving such a document, analyze the impact of the change on the project and its outcomes and inform the stakeholders that amendment in resource allocation in the scheme might be necessary, removing some scope to combat scope creep.
Once the decision-makers agree on the project scope, communicate the project tasks, deliverables, and objectives with your team.
Pitfall 3: The project scope changes
The scope change results from decisions from the manager and the client, for example, when new data or information comes to light. When the scope changes, it involves adjusting to the already established budget, timeline, or cost.
Specify what the client expects the project acceptance to look like. Don’t be afraid to manage your client’s expectations and communicate upfront that additional changes require extra costs, approvals, and documentation.
Focus on the basics. Limit the scope of change, even if a minor one, and define a fundamental process for that. Remember, sometimes it’s better to say “no.”
Pitfall 4: Project delays
When leading a big or small project – it’s natural to have unexpected delays, and no matter how well the team is organized, you simply can’t avoid them.
Set the SMART project goals. Putting down realistic and clear goals is key to delivering projects on time.
Revisit your people allocation strategy to ensure the right people are in the right projects. If the delay has already happened, adjust the current resource allocation to the changes.
Prioritize tasks. Try reorganizing the original plan, eliminating minor tasks, and setting new realistic deadlines for each task.
Use dedicated project management software to inform you about potential bottlenecks and track the project progress in real-time.
Pitfall 5: Resources become unavailable
Lack of resource availability can appear suddenly. For example, a person who was supposed to complete five project tasks within one month suddenly gets a better job offer and leaves. The project manager needs to act fast and find the best replacement from the in-house talent pool or come up with an external hire.
Consider using resource allocation software instead of spreadsheets for such occasions to quickly see who among the available resources can replace the missing person.
In the pre-launch stage, create a backup list for at least the most critical jobs on a project.
Talk to the customer and figure out the best strategy together.
Don’t schedule your team to be 100% available. We all know that daily meetings, coffee breaks, and even poor well-being don’t allow people to be 100% productive on their tasks. Go down to 80% availability and, based on that, plan the project workflow. This approach will also help you while calculating the budget.
Pitfall 6: Lack of resource allocation strategy
Ideally, finding the right people for the right projects is a resource management process that goes far beyond a particular task. That’s why a strategic approach to resource allocation can become a critical management lever for successful project delivery.
To eliminate the resource allocation problems, take a look into the company’s skills gap. Continuous workplace learning of employees is much more cost-saving than recruiting additional resources for the projects. This measure requires close cooperation with the educational and HR department, yet this step will significantly improve your resource planning for future projects.
Arrange the skills list of every employee with verified levels of experience.
Monitor the development of the most vital skills in your company. Every company is different and uses a specific employee skillset. The freedom of management should be that you decide what skills you will monitor and develop in people.
Use professional skills trees to identify the upskilling opportunities. Skills trees are maps that define a profession’s abilities which are sorted out in the order of importance. You can find all kinds of IT profession trees on our website and see how to raise a specialist in different areas.
Offer additional online pieces of training or on-site workshops and track the learning progress consistently.
Pitfall 7: Remote team management
It can be challenging to manage the project and team remotely, even despite the fully-equipped online environment. Resource managers often are tempted to know how many hours people actually work from their homes and expect others to keep up with the project schedule perfectly.
Make open and transparent communication your habit. Express your concerns and encourage people to cooperate.
Inspire employees to compare their skills with others and seek professional enhancement. If done in a sort of game, it will motivate people to self-develop and create a healthy professional community.
Trust your people. Business performance amplifies when people feel united with the same goals, mutual trust, and respect.
Give more time flexibility to the people. At the end of the day, what is really important is the delivered job, not fitting into the perfect employee image.
How do you allocate human resources?
1. Effective resource allocation starts with the project scope
Before you consider anybody to do anything on a project, it’s vital to understand the project plan and its tasks. There are various resource allocation methods in project management.
The three constants of every project are cost, scope, and time. Together they make up a Project Management Triangle that directly impacts the human allocation process. For example, without a sufficient budget, you simply can’t engage too many people with the project.
If you want to learn more about dependencies in the project management triangle, we’d recommend reading this article.
In short, successful project management requires answering the following questions:
- What is the project deadline?
- What tasks does a project consist of?
- What are the project dependencies?
- What there task dependencies?
- What are the resource dependencies?
- What are the project uncertainties?
- What are the deadlines for every task?
- What skills are required for every task?
2. Check both the resource availability and their competence match
Before you start allocating resources, you need to know where you are standing. Foremost, this means analyzing the available talent pool. Learn about employees’ skills and how people see themselves in your organization.
The goal here is to ensure that the right people, with the right set of skills, are working in the right place. Who among your current colleagues has the skills related to a project?
3. Pick up the right resources
Now that you are fully aware of what your current staff situation is, you’ll need to think ahead and identify potential team members. Basically, you will be answering a few questions:
- What is the availability of these people? Can they dedicate as much of their working time to the project as it requires?
- Does any of the team candidates waste the needed skills due to their project role? For example, a team candidate has skills at coding in two languages, but their job scope doesn’t require one of the skills. How could you reallocate resources to avoid the skills waste?
- Is there any skills gap? Should you recruit new talents for the project or simply reallocate available resources inside of the team or even the projects?
At this stage, it’s time to review the available workforce and select the ones that fit the project demands in time, scope, and cost. It’s good to visualize the given data with a mindmap, summary spreadsheet, or a project team scheme.
4. Allocate resources based on the determined attributes
Managers have to make sure that each of the allocated resources has sufficient attributes to carry out the project work. Consider the resource attributes like grade, skill, quality, and availability. After gathering all the resource attributes, a resource manager gains a sufficient amount of information for moving on in the resource allocation process.
5. Choose a dedicated resource allocation tool
Managers quite often have to acquire the necessary resources before the other competing projects overtake them. Most resource managers prefer using a dedicated resource allocation tool simply because it’s more comfortable and effective than a manual resource allocation.
If you’re in a situation where you need to distribute limited resources among multiple projects or your colleagues from other projects hog resources violently, a resource allocation tool will help you solve the issues fairly.
6. Reallocate and rotate talents among teams
A resource may have performance issues, and you’ll need to find a replacement. A resource with a niche skill may be required in another high-priority project. According to McKinsey, “the fundamental goal of resource reallocation is to embed agility in the organization so it can move as opportunities shift”. Reallocating people among projects will help you see the talent utilization opportunities as well as create a plan B in case of unavailable resources.
7. Double-check the team’s workload
A successful resource allocation is one that doesn’t waste scarce resources. On the other hand, when scheduling teams across multiple projects, there’s always a chance to overload every single team member.
The most critical management lever is to ensure the project’s success and balance out the people’s well-being. In your project management tool, pay attention to the notifications about overload and adjust your resource allocation strategy to it.
8. Control Resource Utilization Rates
Resource utilization rates control one of the main insights for the resource allocation process. Utilization rate = Hours worked ÷ Total available hours * 100.
Looking at employee utilization rates, resource and project managers can notice where demand is the highest. Moreover, a concise overview of utilization rates could help you either identify opportunities to scale the company or find the most appropriate tasks to allocate resources.
The main thing to remember about the utilization rates – they shouldn’t go too high or too low, which would mean underutilization or overutilization of staff accordingly.
9. Run a post-project review
When the project lands in the “completed” folder, host a team meeting to analyze its successes and challenges. From initiation to the closing of the project, acknowledge the successes of the team and identify the techniques and approaches that worked and the ones that didn’t.
- What were the bottlenecks or delays, if any?
- Were the resources allocated to the project sufficient enough?
- Did the team use the right tools at their work?
- Did the team feel overloaded with work?
Recognize and reward individual and team successes, and use this as an opportunity to reflect on what went well and what could be improved. Use this feedback to inform your future resource management decisions and continuously improve your processes. Additionally, use this time to learn from any mistakes or challenges that may have occurred during the project and develop a plan to prevent them from happening in the future.
Remember, effective resource management is an ongoing process and continuous learning is key to success.
How EmployPlan helps resource managers allocate resources
Allocating resources in project management should be simple, fast, cost-saving, and strategic – and this is the core of the resource allocation system at EmployPlan. With our people recommendations, the project manager gets (with one click) recommendations of people who fit the projects. This allows the company to get a quick idea of what people resources they have and assign specialists to projects much more effectively and fast.
On top of that, we created talent pools for companies to have access to the most talented specialists who are open to finding a new project. Managers can use the project slot at EmployPlant as the job description – and find the most skilled person for that job in a few minutes.
Now that you’ve read how to allocate resources effectively, let’s put this knowledge into practice.
If there would be only one takeaway from this article, we’d advise every project manager to understand and map out the in-house capabilities and track their development consistently. It’s key to robust resource planning, which focuses on the sustainable development of teams and organizations, helping them achieve their goals.
Since you strive for project success, it’s vital to optimize employees’ workload, ensure effective employee rotation, and offer space for continuous workplace learning.
Do you have more ideas on handling resource allocation challenges? Feel free to share some of your tips in the comments!