The chance that you'll fail to deliver the project because of the lack of resources is known as resource risk. Here's everything you need to know to mitigate it.
Resource risk exists in every project. Resources are the backbone of any project, and project managers spend a significant amount of time ensuring they have what they need to achieve project goals.
But what if you can’t get those resources? Or, what if they are available, but not at the right time?
According to the Gartner’s 2021 Risk Management Conference, 80% of organizations say it's hard to find people with the right skills. Skills are just one of a range of vital resources needed to complete any work, and there are many variables that can affect your ability to get people with appropriate competence.
This article explains how to approach, identify and mitigate resource risk.
Resource risk refers to the chance that you may not be able to get all the necessary resources required to complete a piece of work.
There are a range of factors that can impact this risk, and many of these may be out of your control as a project manager. However, being able to identify and plan for these risks goes a long way to minimizing the impact they may have.
You may even be able to allow for time to overcome these risks in your project timeline, so when they do occur, they don’t result in delays.
There are four steps to making a resource risk plan:
1. Forecast possible resource risks. Identify all the resources needed to complete the project in a resource plan and determine risk factors that could affect their availability.
2. Risk assessment. Evaluate each risk, the likelihood of it occurring, and the impact it could have on the project. Assemble these risks in a risk register and categorize each on a scale from high priority to low priority. The risk register also includes any additional resources that may be required to resolve the issue.
3. Risk action plan. Formulate a plan of action in case the risk eventuates. A risk action plan includes steps to mitigate the impact of the risk if it occurs, and shows a clear way forward in these potentially stressful times.
4. Monitor and control. Unexpected risks may arise as projects are rolled out, or the likelihood of them occurring may change. It helps to update resource risk plans as you go, and having a visual guide to alert you to these changes can really help to minimize the impact as much as possible.
Any resource that is required for your project comes with associated risks. Some, by their nature, come with more risks than others. These are some of the most common resource risks:
For whatever reason, the resources required to complete a project just may not be available. The business may not have someone with the necessary skills, or there may be delays in acquiring a critical piece of equipment.
Despite your best intentions, some resources may become unavailable at late notice. A critical staff member may be sick, burnt out or called away unexpectedly, or another project that’s using that resource may be delayed. These things are out of your control, but they can cause delays.
Unexpected costs are common in project management. There may be an unexpected piece of work that comes with extra costs, or certain tasks may take longer than expected. Money is a true universal resource for all projects, and needs to be taken into account.
There are many reasons why projects may not progress as expected. You may have under-estimated the time certain tasks would take, or workers may be slower than they should be. Whatever the reason, delays are common and should be planned for.
You can also plan for varying delays too - for example, you may be able to carry on as normal if the project is delayed by a week, but a month-long delay may require addressing.
Mitigating resource risk is all about being prepared in advance. Before starting a project, you can carefully plan the best course of action in the event that risks are realized. Without this preparation, you can exacerbate risks by making ill thought-out decisions.
These are some of the best ways to mitigate resource risks.
A well prepared project manager is able to look at their resource allocation plan and identify potential issues with it. It pays to think critically about your allocation plan, look at likely ways it could be disrupted and come up with ways to prevent it from happening.
For example, if you can see in advance that there is only one staff member that has a critical skill, you may be able to upskill someone else to reduce the chances of there being a shortage that delays the project.
Runn’s People Planner helps to illustrate where these resource shortages exist. Watch how our CTO Rowan explains its functionality:
There are a range of ways you can prepare resources in order to be at their most productive for certain projects. In fact, this is something business managers can do as a matter of course to promote efficiency and productivity in all aspects of their organization.
Maintenance management schedules ensure plant and equipment is well serviced and not likely to break down at any part of a project. Older equipment should be replaced regularly to ensure they can be trusted to do the job they’re needed for.
Runn’s human resource planning tool helps to nurture and manage employees to be at their best, avoiding burnout and reducing the likelihood of them calling in sick. See our resource planning guide for more information.
One simple way to keep costs down is to use the cheapest resources that can perform certain tasks. This isn’t to say you should use cut-price resources - these can present other issues - but it does help to go for the most affordable option that can do a job.
For example, not getting a high paid staff member to carry out a basic task that a lower paid employee could do.
Capacity planning helps to ensure you can supply the resources that are needed for a task. It’s an evaluation of the resources your organization has, compared to the demand for those resources.
Capacity planning helps to identify where there may be bottlenecks or clashes in advance, so a plan can be made that ensures resources are utilized as much as possible.
There is a natural amount of disruption to any organization when staff leave. Experienced staff have a wealth of contextual knowledge that simply cannot be replaced. However, you can minimize the impact this has by upskilling and preparing other staff who may be in line for extra responsibilities in the event that their manager does resign.
As well as mitigating resource risks, this helps to improve staff retention rates and keep staff challenged and satisfied at work.
Resource risk management is about being aware of what could go wrong, and planning for different scenarios. However, that’s a lot of work. Realistically, managing all sorts of hypothetical situations can be overwhelming.
Resource risk management is much easier with a visual tool that can identify issues ahead of time. Software such as Runn gives you a huge advantage in being able to easily allocate resources, assess their capacity and control the demand. It’s about helping you to help yourself - and it can make a real difference.
By using Runn, project managers can manage and mitigate risks much more efficiently, and identify in advance when projects may face resourcing issues.
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Don't be overwhelmed by the world of resource tracking software. Our guide will start you off in the right direction - and show you a few you can try right now, for free.