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Shannon Toe

Resource Planning: A Handy Guide for Project Managers

Resource planning is essential for project managers. But not all businesses leverage it effectively - underestimating the commercial benefits it brings. Failing to invest in resource planning is a false economy - one that actually COSTS your business time and money. This guide will help you fix that.

Resource planning is essential - whether you’re a project manager in an agency, consulting firm or IT business. But resource planning - like its big brother capacity planning - is often misunderstood, under-estimated, and under-utilized. 

Professional services businesses don’t always recognize the bottom-line benefits that effective resource planning delivers - like improved efficiency, reduced costs, and fewer expensive bottlenecks. 

Sometimes they think their project managers are already too busy and are loathed to add ANOTHER process into the mix. This is particularly short-sighted as one of the reasons PMs are overstretched is dealing with the fallout of poor resource planning. It’s a vicious circle that traps managers in a reactive - rather than proactive - approach. 

Some organizations muddle along without effective resource planning processes forever. And guess what...? They tend to be businesses that underperform. This means that failing to invest in resource planning doesn’t just cost you time and money, it could also cost you clients, reputation, and competitive edge. 

Of course, not all businesses actively overlook resource and capacity planning. If you're a PM in a smaller consulting firm or agency, you might be just about coping with ad hoc resource allocation - or resource planning using Excel, Google Sheets, Trello, or Toggl. But as your business grows, you'll soon start to feel the pain of projects without proper resource planning and tools. In fact, that's probably why you're reading this guide.

With all that in mind, let’s look at what resource planning means, the challenges it helps you overcome, and how to start implementing it in your organization.

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What is resource planning?

The process of distributing tasks to team members based on their capacity, skill sets, and best fit for the work is known as resource planning.

In other words, resource planning is about assigning the right people to the right projects at the right time. Sounds simple but - in reality - surprisingly difficult. Even if you think you’re managing it - unless you’re measuring your resource performance - you might not be.  

Overall, resource planning may include human labor, technology, equipment...anything that’s involved in getting you through to that finished product or result. 

Having a good resource management plan means the project team knows what they’re going to be working on, and that they’re fully utilized.

An example of resource planning

However, when you’re too close to the situation, it can be hard to get a fresh perspective. So let’s forget about human resources for a minute and use tractors as an example instead. 

Imagine you need to hire a tractor for a project. You'll want to take delivery on the day you plan to start using it. And you'll want to send it back as soon as you can. Otherwise you'll be paying for it when you're not using it.

You'll probably also re-schedule tasks that NEED the tractor for when you have the tractor available - rather than having the tractor idle whilst you wait for the next tractor-critical task.

It's exactly the same with your human resources.

Get resource planning right and people’s time is used effectively on appropriate projects. This improves performance and profitability. But get it wrong and you’ve got a recipe for overspend.

Why is it important to plan resources?

The importance of effective resource planning cannot be overstated. It’s essential that project managers can strategically shift resource to where it has the most impact for the business. And this can only happen with resource planning processes in place. Otherwise, you are operating in the dark, with no way of knowing when or where to reallocate employees to have the biggest impact.

Research from McKinsey  - ‘How nimble resource allocation can double your company’s value’ - looks at the impact of reallocating resources like money, talent and management attention. It found 83 percent of senior executives said strategically shifting resources was the most influential lever for spurring company growth.

When it comes to the ‘talent’ part of the equation, business growth is realized in a number of ways. Leveraging resource planning can help your business prosper by:

  • Increasing efficiency and reducing ‘idle’ or underutilized resources.
  • Optimizing your use of available resources to maximize project outcomes.
  • Approaching tasks with an organized, strategic approach (rather than ad hoc).
  • Knowing your resource availability for future projects.
  • Promoting job satisfaction and staff retention.
  • Improving your relationships with clients and other stakeholders.

An effective resource planning process can determine the right mix of resources needed to complete a project based on the project's demands, which are influenced by three factors: its requirements, its constraints, and its opportunities.

If done right, resource planning also lets you see where mismatches are likely to happen. Remember, this is all on top of allowing you to deliver your project on time and on budget. Check out this infographic as well, where we describe the benefits in detail: 

benefits of resource planning

What problems can be avoided with robust resource planning?

In discussing the benefits of resource planning project management, it can help to see the issues that you avoid when you do it well.

  • Poor communication. Having a clear project plan means team members know what they’re supposed to be doing and when their deadlines are.
  • Resource clashes. A good resource plan lays out when and where a resource is being used, avoiding double-bookings that lead to delays and costs.
  • Idle resources. Under-utilized resources are an unnecessary cost, but having a plan allows you to allocate resources to ensure they’re being put to good use. 
  • Lack of accountability. A resource plan makes individuals responsible for resources, which ensures things are done the way they should be.

Different Stages of Resource Planning

Broadly, resource planning can be divided into the following stages:

1. Understand client and project requirements

Start with determining what skills and experience levels are required to complete a project.

You’ll also want to look at any specific requests that a client may have. For example, long-term, retainer clients often ask to work with particular employees. Some clients may also clearly specify that only senior staff members take on their tasks. 

2. Match resources with the project requirements

Next, identify people who best meet the criteria of resources needed to work on the projects in your pipeline.

In addition to reviewing skill matches between projects and staff, it’s also crucial you look at each employee’s availability. This helps you optimize resource utilization and keep underutilization at bay. 

3. Host resource planning meetings

Depending on the size of your organization, you’ll want to check in with other project managers to learn about their resource requirements.

Doing so assists in preventing resource conflicts. For instance, avoiding a situation in which different project managers want to work with the same resources during the same period.

4. Check in with your team and assign work

Finally, start assigning work.

If you aren’t using a resource management software, you’ll have to manually check in with your staff to ensure they can take on the projects you’ve planned for them.

Chances are an employee might be planning to take an off while you’ve booked them for a new project starting during the same dates. Keeping your team in loop about new projects in the pipeline helps prevent such a situation and ensures smooth project planning

Challenges in resource planning

When we talk resource planning with potential customers, the word we hear most often is ‘chaos’. They're trying to manage multiple projects that are constantly changing. And without the right tools, techniques and information, they always feel on the back foot.

As with most things in business - if you can't be proactive, you get stuck being reactive. And that's never the best approach.

There are a LOT of problems that result from poor resource planning. Or that make effective resource planning really difficult. 

But just because it’s difficult doesn’t mean you shouldn’t do it. In fact, it means it is even more important. 

Because if you think things are crazy now…wait until your organization grows, or wins more projects, or opens another office. Then you’ll really know what chaos feels like! Here are the challenges you and your organization could be facing right now.

"My organization is growing. I don't have the visibility over who's doing what."

Transparency is essential for effective resource management. You need to know who's available, what their skills are, if they're earmarked for other projects, whether they're operating at capacity or have bandwidth for more work. Without this information at your fingertips, your project plans are a shot in the dark. This can mean last minute changes to your best laid plans. And that undermines your ability to deliver desired project outcomes.

"We don't match people with the right skills to the right projects."

Resource planning is about assigning the RIGHT people to the RIGHT project at the RIGHT time. Without resource planning processes in place, you can't always do that. The risk is that you'll assign people with sub-optimal skills who aren't up to the task. Or the opposite - assign overqualified resources who cost more than you need to spend. Either way, your budget and project's success is at risk.

"Our agency is not getting the best out of our people."

This challenge is about resources not being used to their full potential. For example, working on low value projects or involved in busy work that could be assigned to someone else. This means you're not getting the best out of the people you pay so handsomely for. It's like buying a Rolex to use as a paperweight. Not the best use of what you've got!

"We're allocating people to projects on an ad hoc basis."

Ad hoc allocation is when there's no strategy behind how you allocate resources. You allocate at random with no analysis of skills need, incoming demands, project goals etc. If your agency simply operates on a first-come-first-served basis - whereby the first person to ask for resources, gets them - you could be undermining your project efficacy and profit margin. If there are multiple demands on your resource, you should be prioritizing your projects. This ensures optimal resource utilization - assigning your MVPs to projects that move the needle most for your business.

"Our billing efficiency could be higher."

Your team don't spend 100% of their work day on projects. There's often a lot of admin - like meetings, emails - plus eating lunch and even going to the loo. So you need a way to work out exactly how much time they DO have for projects. Overestimating resource capacity can lead to slippage in your schedule. Or overworked resources trying to catch up and reaching burnout.

"We're using disconnected tools that require a lot of admin."

Some organizations do try to track and plan resource but aren't using the right tools. We hear horror stories about spreadsheets and Google Docs that make our eyes water. Endless scrolling. Manual calculations. Best-guess allocation. This reduces your effectiveness in other areas of your PM responsibilities. A proper resource management tool lets you visualize resources, see availability at a glance, and simply drag-and-drop resources to allocate them. This saves you time and makes it much easier to find the right people for your project.

"We've outgrown out tool stack."

This is related to the problem above. Sometimes your planning tools start out great. But as you grow, they grow unwieldy. More projects, more staff, more complexity. Otherwise-organized PMs find themselves in a constant state of reaction and unable to get ahead of their projects - thanks to formerly fit-for-purpose planning tools like Excel, Trello or Toggl. Using dedicated resource planning software makes life easier, so you can do what you need and get back to other work.

"We can't predict when to hire new people."

The challenge of not being able to predict when to hire of fire is all too common. Without adequate resource and capacity planning, your agency might overestimate how much work they can handle. To keep up, they might need to make some last-minute hires. This is never ideal as you often pay over the odds to go through a recruitment agency and need to rush the onboarding process. Capacity and resource planning tools give managers better insight into capacity and recruitment needs, so they can be properly planned and managed.

"Our employee turnover is too high."

Finally, let's not forget that 'resources' are people. They need to be handled with care and respect or they can get disenchanted and leave. Losing staff is a risk in any business because replacing, onboarding and training staff takes time and money. But talent turnover is a particularly big risk in professional service firms, where you can lose a client if they lose their key contact. Resource planning software can help you manage resources better - keeping team members at the right level of challenge, stimulation and satisfaction. And, most importantly, avoiding burnout - one of the leading causes of talent turnover.

If you face one of the challenges above, it's time to revisit your resource planning approach.

What makes an effective resource planning process

If you're sold on the idea of resource planning, you're probably wondering where to start. Here are seven steps to get you going.

1. Identify the skills needed to complete project assignments

In order to plan effectively, it is important that you have good knowledge of all the resources that are required within the project from the very beginning. Drawing from project requirements, you can get a good idea of all the resources and skills the project needs, and when they should step in. This will inform your company's hiring decisions and a resource management plan respectively. Mind that it’s important to be thorough in assessing what you need in order to be efficient.

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2. Get to know your resource availability

The availability of resources is a critical aspect in project planning and management. It relates to the knowledge you have about what resources you can utilize, when, and under what conditions. Knowing your resource availability requires looking at each employee's allocations now, as well as days, weeks, and months ahead of time, to figure out the gaps when their time is not occupied. 

If resources are available, you are allowed to use their time for the duration of your project. As a result, a typical resource availability matrix will include everyone's workload, as well as vacations and personal time off.

Sometimes that may be straightforward, but other times it may require more in depth planning.

For example, your resource may be pre-booked to doing something that is within a higher priority area of the business. Think if it's possible to adjust your schedule of work to focus on other aspects of your project in order to utilize your current resources while you wait.

3. Create placeholders for missing capabilities

‍‍It’s expected that for some assignments you won’t be able to find resources. This happens all the time, and for that case Runn has a feature you could use to create an allocation without adding the resource. 

4. Hire the right talent

Once you know what skills you're missing based on the placeholders you created, it's recommended to start making a case for bringing in new roles. 

Considering the logistics of acquiring material resources is equally important. If there’s transportation required, or if the resource needs to be set up before jumping on a project. 

5. Create a resource management plan

A resource management plan is a wonderful guide. Your plan may need to be changed as projects are rolled out, but it will give you a basis from which you can allocate the necessary resources to a project at the times they’re needed.

Your plan includes identifying the resourcing that a specific task requires, acquiring that resource, and re-allocating it once it’s no longer required. Without a plan, you may get to a stage of a project and realize you don’t have a resource you need, or it may be being used elsewhere. 

At its most basic level, a plan is a standard resource management technique that ensures your project has the resourcing it requires.

6. Effectively manage the team

Managing your team is all about how you ensure team members remain as productive as possible without putting them on overdrive. It’s essential to consider the following concepts:

  • Performance tracking. It helps to track and measure employee productivity to ensure they’re getting through the required work.
  • Skill development. Team members are motivated by learning new skills and being challenged. It’s important to provide an adequate level of work that keeps them satisfied.
  • Burnout. Working too hard, or for too long diminishes workers’ productivity. It’s also a personal issue that can lead to staff leaving your business. 

A proactive approach into managing your teams is vital to promote their wellbeing at work and get the most out of your staff.

7. ‍Manage any external resources

External resources typically come with extra costs attached. That means it’s crucial to ensure they’re being fully utilized while you have access to them, and they’re returned as soon as you’ve finished with them.

For example, if you have a specialist tradesperson working on parts of a project, they should be fully engaged for the entire time that you’re paying for them. They should understand and adhere to your policy around breaks, and your contract with them should end as soon as they’ve finished their work.

This also goes for resources for project management. If you’re paying for software or a project management tool, you should cancel your subscription as soon as it’s no longer needed.

Using resource planning tools and techniques 

As we've hinted at above, resource planning is much easier with the right tools. If you're struggling to manage resources using Google Sheets, Excel, Toggl, Trello... the list goes on... then you might benefit from dedicated software for resource planning.

Resource planning software helps solve those challenges we talked about earlier. It takes the guesswork out of forecasting and the manual effort out of planning and managing resources. Which means you can effectively manage multiple projects - and build a best-fit project team - every time.

Here's what some of our customers say about Runn capacity and resource planning software.

  • 'Our projects are fluid. We live in Runn because our allocations are constantly changing.'
  • 'The capacity planning chart really changed things for us. Just being able to drill into a team and see where the cliffs are has been a huge benefit.'
  • 'Being able to add projects that aren't yet confirmed or have a flexible timeline has been a game-changer.'
  • 'The actual vs budget data has transformed how we're able to manage and monitor our projects - adding genuine value to our business processes.'

If you want to discover the benefits of Runn for yourself, sign up for a free seven-day trial today.

How to Build a Resource Plan with Runn

Runn offers a suite of features that make resource planning a breeze.

Create a comprehensive resource inventory

To begin with, the resource inventory you create with Runn features everything from the employees’ skills and interests to their availability and day rates.

Not only does this make it easy for you to identify best fits for new projects but also helps you quickly see whether those people have enough time to take on the new tasks (without having to manually check in with them). At the same time, you can tell if their rates are aligned with the client’s budget.

Manage employee workload and resource utilization levels

Runn gives you a resource heatmap, to visualize all employees’ availability and utilization levels. 

Having this information at your fingertips helps you assign work only to resources who have the bandwidth to take on the work.

This saves you from resource clashes — assisting you in effective resource planning around scheduled time off and holidays. It also assists in improving employee satisfaction by helping keep overwork and subsequent burnout at bay.

Plan with placeholder resources

If you don’t have anyone on the team available to take on the project at hand, use placeholders in your Runn resource scheduler to define requirements for skills and capacity. 

Use this placeholder information to onboard part-time or freelance contractors matching the skills and capacity requirements.

Most of all, with your resources planned in Runn, all project managers can get a bird’s eye view of the available resources without having to waste time in resource planning meetings.

Key takeaways

  1. A sound resource plan can make a huge difference in your ability to complete a project on time and on budget. In fact, it’s incredibly difficult to achieve both of those things without a good resource plan. Project resource planning should be a standard part of preparing for any project.
  2. It’s best to make your plan well in advance so you can lock in the resources you need. The longer you wait to book resources, the more likely it’ll be that someone else is using them.
  3. Don’t treat your plan as the finished product. Plans always change, and it’s ok to make adjustments. The important thing is that you have one.
  4. Resource planning works best when your organization also engages in capacity planning. So if your senior managers aren't on-board with that yet, it's time for you to educate them!
  5. Resource planning tools - like Runn - eradicate the time-consuming manual labor associated with managing resources in a constantly changing environment. Start your free seven-day trial now.

Project resource planning should be a standard part of preparing for any project. It’s best to make your plan well in advance so you can lock in the resources you need. The longer you wait to book resources, the more likely it’ll be that someone else is using them.

Don’t treat your plan as the finished product either. Plans always change, and it’s ok to make adjustments. The important thing is that you have one, and you will see just how beneficial it is when you do.

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