Resources are the most significant investment of any business. The way you manage your most significant asset defines the project’s success and profitability. However, it’s not easy as it seems. Managers have to ascertain that resources are assigned tasks as per their skills and competency. If not, it will have an adverse effect on the overall organizational efficiency.
Resource Allocation is the process of scheduling and booking resources for the appropriate project tasks. For overall efficiency, it needs to be coherent and consistent with the resource capacities.
Every activity in an organization requires resources such as people, time, tools, and the onus is on the Project managers to allocate them intelligently and efficiently. While scheduling projects, if you over-allocate a resource against their availability, it will lead to employee burnouts and potential project failures.
In this article, we shall explore the resource allocation challenges and ways to address them.
1. What is overallocation of resources?
A resource is said to be overallocated when he/she is assigned more work than the actual capacity within a given time. Resource overallocation is a challenge within a matrix organization with multiple reporting lines and different priorities.
For example, a shared resource is booked and tasks assigned are for 8 hours on one project and 6 hours on another project in one day. However, he/she only has 8 hours of bandwidth in a day. In this case, a resource is said to be overallocated.
When resources are overworked with multiple tasks, it leads to burnout, declines in productivity, and results in deterioration of the quality of delivery.
Here is a detailed description of the consequences, overallocation can have on your firm:
2. Consequences of resource overallocation
The consequences of overallocation can be detrimental to your projects as well as your organization as a whole. Let us look at some of the ill effects of resource overallocation:
A. Unplanned attrition
Frequently overloading resources with work elevates their stress levels and causes fatigue. If it continues for long, it will lead to burnout, declining their mental and physical health.
This will eventually reduce their productivity and lower down their morale. When employees’ well-being is not taken care of, they will feel demotivated and distressed and will look for a job change. All these factors lead to unplanned attrition. Such events can potentially bring the project’s progress to a halt causing potential losses to the firm. Unexpected attrition also makes the companies incur extra costs to hire a similar skilled resource without enough lead time.
B. Resource Capacity planning
When the employees are asked to work beyond their capacities and overachieve, without proper analysis of their schedule, it can lead to distress. It eventually leads to disengagement and decreased morale. The typical signs and signals of dented employee morale include:
More prone to mistakes– Mistakes happen mainly due to a lack of focus on the quality of work and the fear factor of not meeting the deadline.
Lack of enthusiasm and ownership– An overworked employee feels disengaged and avoids participation in regular day-to-day activities
Missing deadlines– The productivity of an overburdened employee decreases. Consequently, they fail to adhere to deadlines,
Lack of collaboration and engagement– Overallocation causes ineffectiveness and lethargy in the staff leading to disengagement and disconnect.
These factors don’t just affect a single employee’s performance but have a ripple effect on the entire team’s output.
C. Employee Burnout
An employee working for long periods of unending work leads to burnout.
A Gallup study revealed that “63% of employees who experience burnout call in sick more often, and 2.6 times as likely to look out for a job change.”
Some of the signs of employee burnout are:-
- Overlapping priorities – Employee is indecisive on which task to prioritize
- Decreased productivity – due to lower morale, engagement, and higher levels of stress
- Work-related stress– Higher levels of stress due to additional responsibilities that do not align with the schedule
- Inflexibility– Employees becoming rigid or willing to grow and adapt can indicate burnout.
Increased absenteeism is also one such frequent occurrence of unplanned leaves manifesting from mental and physical stress.
D. Inability to meet project deliverables
Project deliverables must be well planned and properly executed and clearly defined in the project schedule with the due dates. Due to some critical ad-hoc tasks that require immediate attention, project Managers end up setting challenging goals or unrealistic deadlines that may be difficult for employees to achieve.
Here is what happens when employees are unable to meet the project deadlines:
The inability to meet project deadlines can lead to discouragement and frustration.
The wrongful execution of critical project tasks will have a cascading effect on the entire project, eventually bringing it to a grinding halt.
Mobilizing and altering schedules for one project (that has failed) will compromise and affect the pipeline projects.
Such shortcomings make employees struggle to meet project demands and hamper timely delivery leading to budget overruns.
E. Work-life Imbalance
After working extra hours, employees carry home a foul mood and the feeling of a bad day at work. These may seem like temporary problems, but persistent negative attitudes are a serious red flag. When your workforce does not get time to unplug from work, it leads to frustration and creates resentment towards the workplace.
Such attitude harms the entire team and its productivity in ways like:
- Lack of coherence within the team
- Reduced or No ownership of tasks
- Ineffective communication with the team-members
- Internal conflicts
- Lack of productivity can deteriorate the quality of interdependent tasks.
Overall, the work-life disproportion leads to a disruptive workflow and creates an unhealthy work environment.
F. Loss of business
An overloaded workforce can significantly erode the brand value of a company. When deliverables are not met on time and task lists are not satisfied, and the project’s quality does not align with the client’s expectations, it instills a loss of trust in the client’s minds.
When your firm fails to enhance client satisfaction, your client will look for other organizations that can do it for them. Such a loss of clientele leads to a decline in overall sales and revenue.
Subject to the consequences mentioned above, managers must implement the right resourcing measures and distribute the workload evenly across the organization.
You can leverage the following proven techniques to avoid over-allocating your workforce:
3. Ways to avoid resource overallocation
Managers need to avoid resource overallocation and distribute work uniformly to enable optimum utilization. Here are some effective techniques to eliminate overallocation.
A. Forecast resource availability and utilization
Efficient Resource scheduling is a critical element in ensuring resource availability. It allows managers to assign the right resources to the suited projects based on their skills, availability, cost, among other criteria.
Implementing an advanced resource management tool will give you a birds-eye view of resources, their skills, and schedules. Moreover, the advanced features allow you to foresee the resource demand and their utilization ahead of the curve. Based on this data, you can distribute the workload evenly across the organization without overloading a particular resource.
B. Resource Leveling
Resource leveling is a technique where the start and finish dates of a project are adjusted based on resource limitation to match the available resource capacity. To ensure that the employee is not over-utilized, managers have the leeway to modify the project timeline according to that critical employee’s availability.
This practice facilitates the employee’s schedule and allows him/her to focus on other projects or tasks without hampering the quality of work and keeping up the deadline. Implementing this technique will smooth out the workload and will keep you from over-burdening your staff.
C. Recheck priorities
In the current volatile market, one aspect every project manager needs to be adept at is setting the right priorities. Prioritizing is the act of setting tasks in a particular order so that you and your team can deliver the projects that add more value before the ones that don’t.
This also allows your resources to give their undivided attention to the critical tasks first and not work on all the projects simultaneously. Managers can get an intuitive resource management tool to get unmatched visibility into the current and pipeline projects and further categorize them based on their priority.
D. Assign additional staff
Resource overallocation leads to exhaustion and hinders productivity. Even the extra-milers, who are often given the badge of going beyond, tend to struggle to meet deadlines. Resource managers can pull in additional resources with the right competencies to ensure project completion and thereby avoid employee fatigue and burnout.
While doing so, managers must assess and evaluate the resource costs and form the right band mix with the cost-effective local or global resource. This will keep the project costs in check when maintaining the resource’s well being at the same time.
E. Diversify skills and responsibilities
Studies suggest that upskilling and engaging employees show 21% greater profitability. Allowing employees to build skills through job rotation helps the team to diversify its skillset.
Overworking on the same tasks adds to the mundaneness and can often lead to disinterest and disengagement. Thus giving the employees different opportunities helps them hone their skills while keeping up the motivational levels.
Diversifying skills also help in succession planning, especially for critical roles in the smooth running of projects. Succession planning helps create a skilled workforce capable of critical roles as the business changes, grows, or develops.
F. Project Scope
The project scope includes the project’s goals and objectives, deliverables, financials, tasks, and deadlines. If there is a sudden change in the business requirements and the project manager is still expected to deliver using the same resources, it can lead to resource overallocation.
It is necessary to define a proper change control process during the project initiation phase. Any substantial change in the project scope needs to be pushed back to the next release. In case that is not possible, approval is sought to change the delivery timeline or increase the budget.
G. Build an on-demand contingent workforce
On-demand workforce refers to the contractors or freelancers who step-in while your full-time employees are knee-deep in their existing assignments. Demand capacity planning helps you identify the excess resources needed to fulfill project requirements in advance. Accordingly, a backup team consisting of freelancers, contractual workers, etc can come in as a blessing when your employees face an overload and save them from eventual burnouts.
Depending on the duration and nature of the project plan, decisions to hire full-time employees or a contingent workforce can be made. For projects with a shorter duration, a contingent workforce shall be an ideal fit. There is no lead time involved to hire them and no permanent overhead costs involved to retain them.
4. Key takeaways:
Resource allocation is a vital aspect of efficient project resource management and, therefore, must be systematically executed. The tips mentioned above will help you achieve optimum allocation and enhance employee productivity.
In addition to the tips, implementing a multidimensional resource scheduler could help avoid double-booking and improper allocation with data-driven insights.
Managers must strive to keep their resource’s health in check, as they are the success-drivers of your firm.
What steps do you follow to avoid over-allocation of resources?
5. SAVIOM Solution
SAVIOM, without a doubt, has become the market leader in offering the most powerful and configurable solutions for managing enterprise resources efficiently. Having more than 20 years of experience, this Australian-based MNC has a global presence across more than 50 countries and an esteemed client list of over 100 customers, helping them achieve their business goals. SAVIOM also has products for project portfolio management, professional service automation, and workforce planning software, which can be easily customized as per business requirements.
Please get in touch with us to discuss your business challenges and significantly reduce project resource costs, increase billable utilization, and more!