According to Mckinsey, nearly 83% of executives consider resource allocation to be the most critical management lever in spurring growth.
Effective resource allocation ensures that the right resources are assigned to suitable projects according to the different skill sets they possess. Thus, it is crucial to complete projects on time and within budget and gain business profitability.
However, when managers fail to allocate competent resources, it can lead to low productivity, burnout, compromised quality, and ultimately, derail projects off track. Therefore, it is imperative to deploy the right resources to suitable projects, thereby enhancing their performance.
This blog discusses the best practices for efficient resource allocation using Saviom’s resource management solution.
But first, let's understand its importance.
1. Resource allocation: definition & its importance
Resource allocation is identifying and assigning the right resource with the right skills at the right time and cost for a specific period to various activities. These activities can be either project or non-project related work, such as BAU, admin, support, operation, etc.
Additionally, it allows you to plan and prepare the workforce in advance and effectively distribute all the available resources to several projects. Further, it helps to reduce project resource costs significantly by allowing managers to deploy cost-effective global resources.
In addition, managers can check if a resource is under/overallocated and take corrective measures to mitigate it. This ascertains optimum resource utilization and ensures profitability.
Moreover, effective resource allocation increases client satisfaction and improves their morale and engagement in the workplace. This improves work efficiency in an organization and ensures successful project delivery.
Given the significance of resource allocation, let's look into some best practices for allocating resources effectively.
2. 5 best ways to allocate competent resources
Here are the five best ways in which managers can allocate resources to various projects efficiently.
2.1 Estimate & request resources timely
The project manager must estimate the number and the type of resources required in their project and initiates the requisition process ahead of time. That way, the resource manager will get the lead time to identify the best-suited internal resources or hire a permanent/contingent workforce whose skill set aligns with the project requirement.
This will ensure that both human and non-human resources are available before the project's onset. Thereby avoiding last-minute firefighting or wrongful hiring of high-cost resources.
2.2 Find available resources with matching skill sets
It is necessary to allocate resources based on the demand, or it can negatively impact the project. So, managers need to find that all the resources required are available. If there is an excess of resources, managers can bring in future project work, adjust timelines, etc.
In case of a shortage of resources, they can go for hiring or training and upskilling of existing resources. Additionally, managers can leverage cost-effective global resources to control project costs.
2.3 Filter-out resources based on selection criteria
When a resource manager allocates a less experienced employee to a higher-level project, it becomes stressful for them and hampers their performance and morale. Additionally, assigning a niche skilled resource to a simple task leads to disengagement and demotivation.
Therefore, managers should filter out the resources based on different selection criteria like- availability, schedules, etc., and then assign the best-fit resources to suitable projects. In addition, it will reinforce employee engagement and increase their performance as they will be uniformly distributed across diverse projects.
2.4 Avoid under/over-allocation of resources
The over-allocation of resources will result in stress and burnout due to excessive workload. On the other hand, when employees are under-allocated, they will be disengaged as their skill set is not appropriately leveraged. Managers can ensure the uniform distribution of workload by implementing various resource optimization techniques.
For instance, when a resource is overloaded with two or more projects beyond its capacity, managers can implement optimization techniques such as leveling and smoothing. As a result, it eases employees' workload, enhances their performance, and prevents burnout or disengagement.
2.5 Encourage resources to work on the project of their interest
Often, in an organization, managers fail to consider the interests of employees while assigning them to work. As a result, their engagement and productivity in the workspace get drastically affected. To avoid this, managers can give employees a choice to select projects of their interest by publishing open positions mentioning requirement details such as skillset, qualifications, experience, etc.
Accordingly, resources can show their interest for suitable open positions. Then the managers can choose the best-fit resource for the projects. Also, as resources work on the interest of their projects, they will be more motivated and engaged, increasing their performance.
Now that the best strategies to implement resource allocation are clear let’s look at how robust resource management can help.
3. How an advanced resource management can help?
Saviom’s resource management software facilitates the efficient allocation of resources by giving managers 360-degree visibility of all resources. In addition, it helps them find the best-suited resource with the right skills for diverse projects.
Further, the tool’s forecasting capabilities and capacity-vs-demand report help foresee the skill gaps and fill them proactively through appropriate internal and external channels. Thus, it reduces the last-minute firefighting of resources.
Moreover, the tool also helps managers understand how resources are utilized with heatmaps and forecasts vs. actual reports. Accordingly, they can take course corrective actions to ensure optimal workload of employees.
Using the resource management tool, managers can also publish open positions and specify requirements, such as skills, qualifications, and experience. Employees interested in the open positions can apply, and the best resource for the job will be assigned.
The bottom line
Allocating resources effectively helps in completing the project satisfactorily and maintaining business profitability. With the steps mentioned above and leveraging the right resource management tool, managers can easily allocate the workforce across multiple projects. This will further help businesses enhance their work and improve productivity and engagement.