Resource management is key to agency productivity, profitability, and project outcomes. Here’s how - and why - to make it a priority.
Resource management is about assigning the right people to the right projects at the right time. But the bigger picture is about improving productivity, profitability, and project outcomes - as well as right-sizing your workforce for your future plans.
Whilst most agencies continue to prioritize talent attraction and retention in response to post-pandemic upheavals and uncertainties, savvy agencies are also aiming to improve their resource management in 2022.
Done well, resource management doesn’t just boost your projects and profits - it also improves your employee experience and supports retention goals - making it a win-win for ambitious agencies.
Here’s how to do resource management in an agency - and do it well.
Resources. Talent. People… Whatever you want to call them, they’re at the top of the agenda for agency leaders in 2022. How to attract, retain and support them, as well as how to deploy them productively and profitably.
Following several years of uncertainty and upheaval, Deltek’s Marketing Agency Leadership Report 2022 finds agencies confident. Confident that client spending will increase and staff turnover will reduce in the next twelve months.
Although talent acquisition and retention remain the top priority for agencies, resource planning was identified as the leading operational challenge for agencies surveyed (defined as ’knowing I have the right amount of full-time and freelance staff to match my new business pipeline and expected revenue’.)
Improving operational efficiency is also high on the agenda. ‘Concerns about operational efficiency are increasing and [our survey received] multiple comments about lack of systems’, they report. Among those surveyed, 12% stated that streamlining operations would have the greatest impact on improving profits, with a further 9% pinning their hopes on improved resource utilization (more on this later).
Profitability and productivity are perennial priorities for agencies. Research from HubStaff discovered less than half (43%) of agencies consider their teams to be productive (where productivity is defined as ‘work is done on time and within budget, and team members’ time is utilized well’).
Further research from consultancy.uk - in partnership with our friends at Forecast - found only 9% of agencies believe they’re achieving their full profit potential. With nearly 40% blaming the problem on inefficient delivery processes.
This research paints a picture of an agency landscape that is cautiously optimistic about the future - but aware of the need to improve processes around resources for higher efficiency, productivity and profitability.
Resource management is about getting the right people on the right projects at the right time. If you’re not on top of it, here’s what’s at risk…
Understaffing or overstaffing - Understaff a project and you’ll miss your milestones. Overstaff it and you’ll blow your budget. Resource management is about hitting that Goldilocks spot where your project is staffed just right.
Poor project outcomes - Using the wrong people can impact project quality. Using them at the wrong time can delay delivery. And that can mean unhappy clients and a missed opportunity to convert them into repeat customers.
Reduced profit - Agency profit margins can be tight when you’re trying to price yourselves competitively. Any slip - like using more expensive resources than you need to, or projects going on longer than planned - can erode them further.
Underused capacity - Without effective resource management processes, you don’t know if you have spare resource capacity you could - and should - be using. By optimizing utilization and resource allocation, you could have taken on more projects.
Additionally, check out these six reasons why resource management is essential:
.avif)
With so much at stake, it’s no surprise that agency owners have cited it as their top challenge year-after-year in Deltek surveys. Or that research from Consultancy.uk found resource management was one of Project Managers biggest time-sinks.
Why is it so difficult? We have our theories…
Lack of visibility 🔎 Project managers don’t have easy access to the information they need to allocate and manage resources effectively. How long did this take last time? Who’s available? What are their skills? When are they required? How much do they cost?
Time-consuming processes 🐌 Like having to consult unwieldy spreadsheets to see where people are allocated and try to work out when they’re free… Or manually compiling reports to share information with senior managers.
Lack of systems 🤷🏽 Having no standardized process for getting the right people on the right project at the right time… leading to confusion and conflicts.
Poor PM tools 💔 Bumbling along with broken systems that cause more problems than they solve… It slows down your PMs (but fast tracks their frustration).
Moving goalposts ⚽ Those pesky clients moving the goalposts and turning your best-laid plans upside down - so you need to start the whole tedious process again!
It doesn’t have to be this way. Resource management tools like Runn can do the heavy lifting around identifying, allocating, and optimizing your resources. So you can make the right resource decisions - quickly, accurately, and confidently.
The first step is to prioritize resource management in your agency. As Deltek says in their Marketing Agency Leadership Report 2022 ‘Investing in project management systems, software and tools might seem challenging at a time when the fight to attract and retain talent is at the top of leadership priorities’ but it is essential.
Their research found that hiring more staff, increasing compensation, and upskilling staff were agency owners’ top three investments. But investing in effective resource management makes your team more productive, protects them from burnout, and helps identify training opportunities. Perhaps why Deltek describes system investments as ‘the long game’ for savvy agencies - because it supports talent retention goals as well as profitability.
Remember that improving your resource management processes has two-fold benefits. Firstly, it improves your overall productivity, profitability, and project outcomes. But it also reduces some of the admin burden on your project managers, so they can focus on quality and delivery instead.
If you’re underutilizing your resources, you’re incurring costs without maximizing your ROI. Put simply, you’re paying people but not using their full potential. Having a utilization target helps ensure you’re making the most of the talent you’ve invested in. So what’s a realistic resource utilization target?
We use terms like ‘resources’ but we’re talking about people - and people can only do so much. You can’t allocate people to billable work 100% of the time. Firstly, there’s unavoidable non-billable work like meetings, correspondence, and training. And then there’s the fact that people don’t do their best work when they’re overstretched - they need a little slack to stay creative, happy, and productive.
A realistic target is for resources to be occupied with billable work for 80% of their time. And to book them to 80% capacity.
Once you’ve got your target, you need a way to track resource utilization against it - both at an individual and group utilization level.
To be able to assign resources to projects more effectively and profitably, project managers need to know which resources are available to them. And that means having one place where PMs can see all available resources - and key information about each individual.
Your resource pool needs to include
Equipped with this information, Project Managers can identify the right person for each project - ensuring they have the correct skills without breaking the bank.
This is where having a designated resource management tool like Runn can be helpful. Because your PM will be able to select their team and simply drag-and-drop them into a project plan - setting milestones and assigning tasks as they go.
Like the path of true love, project management never runs smoothly. Once you’ve got a centralized resource pool, you may face conflicting demands on resources’ time. Especially for your MVPs who have the most in-demand skills and knowledge. So it’s important to have processes to prioritize how resources are assigned if there’s a conflict.
For example, have an impartial person or team responsible for deciding which project takes precedence. You should also have a formal change request process - so that you can carefully consider the impact of any changes to project staffing once it is underway.
HubStaff’s State of Agencies 2021 research found that prioritizing work is the biggest challenge for 27% of agencies surveyed.
One way to prioritize projects is through scenario planning - modeling different scenarios to work out which delivers the optimum outcome for your business. This used to be the responsibility of a data analyst, poring over spreadsheets. Thankfully, with resource planning software like Runn, it is the work of a few minutes.
When you’re in the zone, it’s easy to forget to track your time. But when people forget to record the hours they’ve spent on work, it’s hard to track utilization, productivity, and efficiency. And that makes it difficult to monitor, manage and improve things. Explore options for automatic time-tracking or pop-up prompts to capture this information while it’s fresh in people’s minds.
After you’ve completed a project, it’s important to have a wash-up meeting where you assess what went well and what could be improved. Include resource management in this process. Compare your projected-vs-actual figures - schedule, hours, spend - and understand how resource scheduling impacted them.
Did you have to allocate a more expensive resource because your junior colleagues were fully booked? Did you underestimate how long or how many resources a particular task would take? This can all inform future planning - from the type of staff you need to start recruiting, to how long to allow for similar projects. This equips your agency for improved performance in the future.
How well you manage your resources impacts heavily on your productivity, profitability, and project success. So you need to make sure you’re making the right decisions. And to do that, you need insights and data. But often that’s locked away in siloed systems and separate spreadsheets.
What’s our utilization rate? What skills do we need to recruit? Where are our projects incurring extra costs? What if we did Project B instead of Project A?
Good resource planning software will visualize data - in graphs, charts, and heatmaps - to provide decision-makers with the information they need at a glance (and cut down on the time your team spends collating, analyzing, and reporting on it).
As you’ll have gathered, we’re big on using resource management software. Agencies come to Runn because they’ve outgrown their original systems for managing resources - like spreadsheets or Trello boards. As agencies grow, these makeshift tools struggle to keep up.
Runn provides project managers and senior agency leaders with
So your PMs can allocate and manage resources more effectively on the ground. And your leadership team can align resources to strategy - planning capacity and future projects with confidence.
.avif)
