The resource management best practices you need to implement now for serious bankable benefits.
Effective resource management is a key lever of growth and profitability - especially for professional services businesses.
When human resources are your biggest cost - and resource constraints determine how much work you can take on - it’s essential you use those resources effectively.
Proactive resource management has the power to cut costs, increase profits, and make space to sell more projects. But resource management isn’t without its challenges and many businesses haven’t got the basics right yet.
Here are the eight most impactful resource management best practices to drive better outcomes for your business - expert advice you can use to fuel growth and profitability in your project-based business.
The foundation of effective resource management is centralization. You can’t make optimal use of your resources if you don’t know who’s available across your entire organization.
In larger enterprises, hybrid teams, or businesses combining local and global resources, it’s increasingly hard to keep track of who’s who. But you need visibility into your entire team. Otherwise, Project A could be delayed waiting for a DevOps Engineer, while a qualified developer is warming the bench elsewhere in your organization, waiting for something to do.
In this example, poor resource management is delaying your business from realizing revenue on the one hand and burning through financial resources on the other. It’s a double whammy. And it could have been easily avoided with centralized resource management.
It all starts by creating a centralized resource pool. That just means a single source of information about all resources in the organization. Ideally, this should contain the following information as a minimum:
Equipped with this information, project managers can request the most suitable resources for their projects from your entire business.
This helps to:
Centralization isn’t just about creating a centralized resource pool. You may also want to consider a centrally managed:
In larger organizations, these processes may be overseen by a Project Management Office or dedicated resource managers.
Raising awareness of the business case for better resource management - and creating transparency into the resource management process - helps everyone understands exactly how and why decisions are made regarding their use.
This transparency builds trust and confidence, accelerating improvements to your resource management process and reducing the time to higher ROI.
💰 Bankable benefit: When your resources aren’t earning money, they’re burning money. Businesses that optimize billable hours create the highest ROI from their investment. Good resource management also helps you protect profits and realize revenue faster by minimizing schedule and budget variance. (But don’t over-schedule - see below 👇)
Once you’ve centralized your resource pool, you need to keep it up to date - especially skills information. According to the Resource Management Institute, a well-designed and maintained skills database is a key success factor in successful resource management.
If you don’t keep skills info up to date, you could miss opportunities to allocate work to people who have completed training, upskilled, or reskilled. Your business might have more skills - and resource capacity - at your disposal than you realize.
To keep your skills database updated, firstly, make sure staff are encouraged to keep their skills info up-to-date. Ensure you also have a mechanism for their manager to check and validate that the information they’ve provided is correct.
Secondly, don’t just focus on hard skills like product or platform knowledge. Soft skills are equally important. The RMI found only 26% of businesses record soft skills. But skills like leadership and conflict management can make or break a project.
If you need convincing, the Project Management Institute report that high-performing (‘gymnastic’) enterprises empower their people to develop ‘power skills’ like collaborative leadership and innovation.
These result in ‘higher levels of organizational agility, more standardized risk management practices, and less project scope creep… all contributing to better project performance.’ So add soft skills to your resource records too.
Finally, don’t just track the skills people HAVE. Record the skills they WANT. That way, you can identify opportunities to match people to projects that will expand their expertise.
This isn’t just beneficial in terms of upskilling employees, it also keeps them engaged and supports your retention strategy. RMI reports one-third of businesses don’t do this yet.
💰 Bankable benefit: A skills database helps you allocate the right people to the right job at the right time - people that have the skills to deliver the work efficiently and to a high standard. But it also helps you reduce recruitment costs and develop your workforce by providing focus for training programs.
You want to do your best work for every client. But not all projects are created equal. Some projects are just more important. They might be high profile or high value. Or represent an ‘in’ with a new client you really want to win. Or create a bridge for your business to move in a new direction.
Whatever the reason, these projects need VIP service - and that means getting your best resources.
Project prioritization is a way to identify these VIP projects so you can allocate resources wisely - where they add the most value. Here’s the basics:
If you’re struggling to prioritize projects, explore their impact with scenario planning.
Scenario planning is when you compare different scenarios side-by-side to understand their implications.
In project terms, that means comparing different combinations of projects to see how they impact resource capacity, utilization, and other resource management KPIs. This can help you optimize your portfolio.
💰 Bankable benefit: In the short term, project prioritization helps you allocate resources strategically. Over time, project prioritization helps you understand what a profitable, best-fit project looks like for your business - helping you pursue optimal projects and minimize the time you spend on less profitable ventures.
Your MVPs - the most valuable players - are the resources that move the needle for your business.
Typically, they are more senior/specialist knowledge workers - people whose experience and expertise add unique value to the projects they work on. Everyone wants them - but they only have so many hours in their day.
These MVPs need to be prioritized, protected, and retained.
You need to ensure they’re allocated to the highest priority projects, not side-lined into low-value work just because someone called ‘dibs’ first. Project prioritization and resource request workflows can help here.
You need to make sure they’re not getting overutilized. This can lead to burnout, and absences, and eventually cause them to leave the organization for greener pastures. After all, if you want them, someone else will too.
Ideally, you need to give them tasks that align with their interests and ambitions, so they’re engaged with their work and want to stick around.
And finally, if a specific resource is SO in demand that they’re becoming a bottleneck, you need to think about recruitment or in-house training to increase your capacity and competency in this area.
💰 Bankable benefit: MVPs make value through their unique expertise. Assigning them to the highest priority projects makes sure they sprinkle their magic where it has the biggest impact - like delighting your best clients or helping deliver high-complexity projects with ease. Use them wisely.
Project overruns can erode profit margins, client goodwill, and your hard-won reputation - as well as throw other project plans into disarray. According to Deloitte, 60% of projects are late, over budget, don’t deliver, or fail outright.
There are lots of reasons projects can overrun - from scope creep and client changes to delays caused by staff availability or absence.
But some projects are doomed to overrun before they even start, thanks to poor forecasting.
We, humans, are an optimistic bunch. Scientific studies show we have a tendency to underestimate how long things will take. And while a glass-half-full approach is beneficial in most walks of life, in project management it’s a liability.
Your project forecasts need to be accurate. They’re the basis of your budget, schedule, resource allocations, pricing, and profits. Any variance from your planned schedule or budget can seriously undermine profitability - especially in fixed-price projects.
Fortunately, resource management best practices can help you improve the accuracy of your forecasts - especially if you’ve chosen resource management software that does the hard work for you.
Resource management tools will keep a record of historical project data, showing how long similar projects took, the resources they used, time tracking data, whether they stuck to their forecast or overran, etc.
Project managers can use this information as the basis for forecasting future projects - meaning more realistic plans and resource allocation from the get-go, and less risk of variance.
(Resource management software also lets PMs monitor project performance - like planned vs actual schedule and budget burn rate - to keep projects on track in real-time and course correct if needed.)
💰 Bankable benefit: Data-based forecasting has significant benefits. Project budgets are more accurate and profit margins protected. Schedules are more realistic, meaning less risk of overruns and disruption to contingent work. Clients are less likely to be disappointed or surprised by changes.
Resource management isn’t just about the here and now. It’s also about looking to the future. A strategic approach to capacity planning and resource management will:
It’s all about strategic capacity planning. Strategic capacity planning is about forecasting and meeting the future resource needs of your business - working out how much resource capacity you have to take on new work - and whether you need to change the make-up of your workforce to achieve your goals.
Capacity forecasting means that - if you need to hire more workers, downsize your team, or retrain people in redundant roles - you can do so in good time.
This reduces unnecessary costs associated with hiring and firing. For example, having the time to hire a permanent staff member rather than bring in a contractor last minute. Or retraining staff rather than making them redundant.
By getting strategic about resource capacity, you make sure you have the people you need to deliver your current and pipeline projects on time and budget.
(Hiring, developing, and retaining the people needed to turn corporate strategy into reality is of critical importance. Research sponsored by PMI shows that talent deficiencies significantly hamper 40% of strategy implementation efforts.)
Not only that but if you surface spare capacity, you can sell it! If you discover unutilized capacity and resources, you can go out and pitch for new projects to fill the gap.
Needless to say, all of this is easier if you have resource management tools to help visualize resource utilization and capacity at a glance.
💰 Bankable benefit: Capacity forecasting supports optimal resource allocation for future projects, delivering projects on time and on budget. It also reduces wastage associated with underutilization, reactive hiring, and redundancy. Furthermore, it can reveal opportunities to take on more work.
Remember when we said people tend to be over-optimistic? This doesn’t just affect project planning, it affects people planning too.
In pursuit of productivity and cost-effectiveness, some organizations try to fill up people’s capacity - scheduling 100% billable work, day after day. But this is counterproductive.
Firstly, your resources are people, not machines. Especially in the knowledge economy. We all have a finite amount of energy and focus each day (as little as four hours). We need time to think, work through problems, and come up with great solutions. We can’t do that when we’re scheduled to 100% utilization.
Secondly, not all work is billable. People need time to do the work about work - administrative tasks, meetings, training, responding to colleagues. If you schedule billable work for 7.5 hours a day, your people are going to have to stay behind or fall behind.
That’s the fast track to burnout, disengagement, and turnover. And you don’t need us to tell you that that means lower productivity, higher recruitment costs, and a heck of a lot of disruption.
In resource planning, the golden rule is to schedule people to 80% of billable work.
So you should base your resource allocation and project schedules on the expectation that people will spend 80% of their available time on billable work.
Another reason to avoid overallocation is to keep some wiggle room in the day. Building in daily breathing space gives you agility to deal with the unexpected things that crop up - without them disrupting your entire schedule.
💰 Bankable benefit: Optimize resource utilization at 80% to reduce costs associated with staff turnover, stress-related absences, and reduced productivity. Remember it also protects against negative impacts on quality outcomes and client satisfaction too. Win-win.
If you’re using spreadsheets to manage your resource planning, you’re making life way harder than it needs to be.
And if you think you’re being cost-efficient by using a free tool like Excel for resource planning, it’s a false economy that’s costing you time, money, and agility.
Using appropriate resource management tools will increase the efficiency, accuracy, and speed of your resource management process. It’s why the PMI recommends it.
There are lots of alternatives to spreadsheets for resource planning - like Runn. They include a raft of intuitive tools to help you make faster, confident, data-informed decisions about your resource management.
Runn resource planning software - for example - lets you:
💰 Bankable benefit: Resource management software makes it easier to implement resource management best practices. It pays for itself by reducing the time you waste trying to extract actionable data from static spreadsheets. It shows dynamic real-time resourcing insights that power quick, confident, data-based decisions that help your business profit and grow.
If you’re ready to implement these eight resource management best practices in your business, do it right.
Try Runn today and see for yourself JUST how easy it can make the resource planning process (and your life 😉)
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Starting to explore resource planning software? Using Float but thinking about alternatives? Here’s how Runn and Float compare.
Use what-if scenario analysis to evaluate and compare multiple paths forward in an unbiased way to make better decisions.