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Natalia Rossingol

Right Person, Right Project, Right Time: The Importance of Resource Allocation

If you want to enjoy successful, profitable projects (and who doesn't?), you can't ignore the importance of resource allocation.

Effective resource allocation is indispensable for project success. By taking a thoughtful approach to resource distribution, you create ideal circumstances to deliver a product of the best quality on time, improving your business reputation and profitability.

To cut a long story short, by optimizing resource allocation, you can help your business thrive – and if you’re still skeptical about it, we will try to convince you of the opposite.

Why is resource allocation important?

To understand the true value of effective resource allocation, just take a look at the benefits you get by practicing it:

It optimizes resource utilization

This is the most obvious reason why you should take the trouble to do proper resource management. By having the right people, working on the right projects, at the right time, you create a perfect balance, a unity of all the critical components that allows you to reach your goals faster.

You do not make random, reactive choices that can lead the whole project off track – you think ahead, as if in the chess game, deciding how to allocate your resources, and then enjoy the smoothness of an efficient work process. 

It’s cost-effective

The truth is that by allocating resources properly, you save money. You "right-size" your teams, so you don't end up paying for more time than necessarily. You do not hire more employees only because you think you might need them.

At the same time, by planning your resources ahead of time, you make sure you are not under-resourced, which means there will be no missed deadlines or poor quality, rushed work.

This is important in terms of client satisfaction – and if the clients are satisfied, they will come to you again.

It gives you visibility of your resources

You might know the names of your team members, but still don’t know what potential they have and what they can do for the company.

A big advantage of resource allocation is that it gives you visibility and reveals blind spots: by aiming to assign people to the right projects, you get to know their skill-sets, seniority, capacity, and availability. Sometimes, the findings can be unexpected!

resource allocation challenges

It helps you deal with resource constraints

Without doing resource management, resource shortages can catch you off guard. You might need more people in the middle of the project, and without planning, you might not be able to get them. However, you can prepare “a safety pillow,” by forecasting a possible need for extra resources.   

It ensures timely delivery and high quality

The optimal number of employees will ensure the project is finished without delays. The people with the right skill-sets will do the work the best way possible because they know what they do. Assigning people who are available will help avoid conflicts and burnout.

Put together, these factors enable you to consistently deliver the product on time and ensure it meets all the quality requirements.

It improves the morale of the team

When people are working on assignments that fit their competences; when they’re not bored with doing nothing or, on the contrary, when they’re not exhausted doing too many things at the same time; when there is no poisonous gossip about favoritism and injustice – then the psychological climate of the team becomes truly positive, motivating team members to stay dedicated.

And when the team is functional, it produces the best results possible – because all the efforts are directed at reaching the goal, and not at trying to fix problems that could have been avoided.

New to resource allocation? Check our guides:

What happens when businesses don't prioritize resource allocation?

To some business owners and managers, building up a resource management function in their business might seem unnecessary. Spending money on resource management software or hiring resource managers feels like a waste, and making it a whole separate process looks excessive.

However, such a mindset is mistaken, because even though initially resource allocation requires some finances and effort, in fact, it’s an investment that will eventually pay back.   

Even more, businesses that do not think this way actually take risks. Here are some consequences organizations might face if they do not consider resource allocation as a vital part of project management:

Skill / personnel shortage

Organizations that do not do resource forecasting prevent themselves from identifying possible shortages that might occur while completing a project.

As a result, when the project demand cannot be met with the resources available, such organizations, or departments, find themselves in a tricky situation – it might be too late to request more personnel, so there is nothing left to do but to hire new employees to finish the project. The problem is that new people take a while to onboard, leading to even more delays.   

Skill mismatch

Imagine a hypothetical situation: you assign a developer, already involved in multiple software projects, to write a love story set in 14th century Italy. "Never was a story of more woe..."?

While they might surprise you with hidden literary talent, most probably you would be setting the person up for a failure by asking them to do something so outside of their skillset.

Of course, this is an exaggeration. But in real life, businesses might experience something similar if they make the wrong allocation choices.

In some cases, assigning someone a task that doesn't quite match their competence can be useful. People often enjoy trying something new and challenging themselves, and giving people "stretch challenges" can help them grow as professionals.

However, you cannot practice that on a daily basis. Firstly, that would be exhausting. Secondly, that would be simply impractical – people who struggle every day will eventually feel defeated and lose interest, or even become resentful of the work they are doing.

And vice versa, people who are enthusiastic about their work, show the best results. And people do seek the purpose at work: according to McKinsey & Co, 70% of employees want meaningful work that would make them passionate about it – and, unfortunately, only 15% get it.

It’s like with flowers: they flourish only in the environment that’s natural for them. So why go against nature?

Over- and under-allocation

The lack of timely planning can lead to poor assessment of resource availability and, consequently, disproportional allocation of available resources.

Some employees will be assigned too many projects, which will inevitably cause reduced productivity and burnout. And burnout, in turn, leads to high turnover, which is costly to the company, as the company will need to hire and train new employees.  

Under-allocation is not any better. When you don't have the resources you need to complete a job, your project will not be ready on time. Besides, it can negatively impact the morale on the team – people are motivated by purposeful, meaningful work, and there is no purpose or meaning in staying idle.

Effective resource allocation, however, helps manage individual and team workloads and avoid misalignments at the stage of project scheduling.   

Toxic team culture

Stress, a lack of meaning, burnout, and various misunderstandings caused by poor resource planning will have a negative snowball effect on your team culture, causing interpersonal conflicts. This is how businesses might lose their best employees.

The price you pay for that can be very high – after all, they might go work for your competitor.  

The right people, on the right projects, at the right time

In their book “Good to Great,” Collins and Porras say that the best organizations start with “who” rather that “what,” meaning that first of all, they start with hiring the right people rather than setting a direction.

According to the authors, it’s easy to change strategic direction - but not so easy to find the right people who would make a great team, who would be self-motivated and wouldn’t need to be closely managed.

Luckily, resource allocation can be easier than ever now, thanks to technology. There are many resource allocation tools that let you plan, schedule, and allocate resources – like Runn, an all-round software where you can see all your past, current, and present projects, as well as employee’s availability and skills, where you can book resources and use placeholders, and even forecast future scenarios. 

Fancy taking Runn for a spin? Runn makes resource allocation straightforward and simple, no matter how complex your projects are. Try for free today.

Runn's People Planner provides a helicopter view of everyone's allocations and helps resource managers and business leads reveal pockets of excellence.

The who is on the team does matter a lot. By assigning the right people to the right projects, at the right time, businesses ensure maximum productivity, the highest quality, and create a positive work environment where talents flourish.

It’s about far more than just bringing more order into your work – it’s also about staying competitive and successful.

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