If your team is too big to fit around a couple of tables, it's probably big enough to need a resource allocation strategy. Here's why, and how to create one that serves your business.
Having a resource allocation strategy is a bit like having an air traffic controller planning and guiding airplanes as they take off and land at set times to prevent crashes.
The goal is to ensure that folks with the right skills are working on the right projects, that the workload is evenly distributed to prevent burnout, and that people are assigned work based on their availability to prevent resource clashes and project delays.
This makes a resource planning and managing strategy critical for any people-centered organization. Question is: what makes a proper resource allocation process and how can you make a strategy guiding it all?
We answer this and more in this short guide as we dig into:
A resource allocation strategy is an organizational blueprint for assigning available resources to different projects. It:
Without thorough resource management, it’s challenging to optimally use project resources.
Some employees end up overworked, nearing burnout, while others get stuck on the bench. There’s also no saying if your skill pool is being optimally leveraged to drive beyond satisfactory results for clients.
In fact, maximizing returns – both for the organization and employees — is a key benefit of a staff allocation strategy. Here are more:
Taking a strategy-led approach to planning and assigning resources ensures they are all evenly distributed to meet project demands. In turn, this reduces idle time, maximizes productivity, and eventually improves overall operational efficiency.
With the right talent assigned to do the job, the odds of poor outcomes go down. By checking resource availability before allocating projects, you can also reduce resource clashes and ensure quality deliverables are completed by the dedicated project timeline.
A well-defined resource allocation strategy provides you with a clear framework for prioritizing multiple projects and resources. It helps you identify where you need the most resources and lets you eliminate guesswork to assign employees based on available capacity and strategic goals.
An effective resource management process also ensures you assign work based on employees’ expertise and interests. Not only does this guarantee projects have best-fit personnel working on them but it also improves employee motivation as they work on tasks that are right in their wheelhouse. Naturally, increased motivation snowballs into improved employee retention.
By strategically scheduling resources based on not just their availability but also project budget and priority, a resource allocation strategy contributes to cost savings. Ultimately, it leads to better financial control and organizational growth (with increased productivity, improved deliverables, and increased employee retention).
Any business that uses human resources needs a resource allocation strategy. This means that almost every type of organization — from educational institutes to retail chains and marketing agencies — needs a strategy to plan and manage its resources.
Here’s a quick rundown of who needs a resource allocation strategy:
Let’s take a tech company’s resource allocation strategy as an example.
The company, Tech A, has a running SaaS product that drives most of its revenue. But the team wants to now build a side product that opens up another revenue stream. To do so, they’ll need their senior staff to work on product development.
In this example case, the resource allocation strategy would allocate 70% of the resources to the new software. It’ll assign 20% of its team to maintain the existing product under a senior team member to ensure steady revenue and continue guaranteeing customer satisfaction.
If it’s a research and development-focused company, they’d also dedicate a slice of their resources, say 10%, to user and market research so they can ideate new features or products.
Effective resource allocation broadly depends on understanding the work required in the projects in your pipeline and subsequently dedicating resources to complete them at their best.
Where things get tricky though is keeping a birds-eye view of available resources and dedicating them to priority projects (based on stakeholder expectations and organizational goals).
This step-by-step blueprint for creating a resource allocation strategy that we’ve shared below helps combat these and associated challenges. Make sure you follow through each step as if it were a step in a checklist for optimizing resource allocation.
To kick it off, revise your organizational strategic objectives and priorities — followed by clearly defining each project’s purpose and desired outcomes.
Then, set specific measurable targets. For example, the project’s milestones, deliverables, and success metrics.
Creating a work breakdown structure or reviewing plans that project managers may have made helps speed up this step. It also ensures you don’t miss any essential detail regarding the work that goes into projects in the organization’s pipeline.
Side by side, identify and understand key stakeholders’ needs and priorities. This includes learning what clients, investors, and team members expect.
For instance, a retainer client might request a specific senior member to head their project — knowing details like these beforehand helps with efficient resource allocation, preventing resource clashes as well.
By the end of this legwork, you’ll have a priority rating for projects (or an understanding of how important each project is to the organization), the scope of work (what goes in them), and a timeframe (showing all that’s due in a specific time frame — say a quarter).
Based on these three, identify what type of resources you’ll need to meet project and organizational requirements.
You’ll end the first step with a clear idea of the resources you need.
For instance, two senior members for project A, one junior for project B, and a team of highly skilled workers with a specific skill set for project C.
With that, take inventory of available resources. Work with team leads and managers for an understanding of existing resources, their skills, experience, and availability.
If you use a resource management software like Runn, it makes it simple to create a skills inventory showing your organization’s talent pool, availability, and skills.
Such a skills inventory in a dedicated software makes it easy to access and share your company’s skill pool.
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Anytime a new project kicks off or you are in the middle of planning or allocating resources, simply pull out the skills inventory and apply filters to it (as needed) to find the people you need to work on a specific task or project.
Once you’ve made a skills inventory, reference it to:
Further reading: How to Perform a Skills Gap Analysis in Your Organization ➡️
Next, review if additional external resources such as vendors or contractors are needed. You’ll need these not just to meet the skill gap but also to ensure you’re setting realistic timelines and workload expectations for your employees.
Keep in mind: as you gear up to allocate resources to each project, make sure you consistently review their full scope, timelines, and resource requirements per task.
At the same time, review each employee’s availability (including what they are working on currently) to ensure you assign project tasks to people who have the right skills and time to work on them.
One last bit that plays a role in resource allocation: the project budget. Often, when the budget is low, you have to pull out senior resources or reduce the number of people dedicated to the project.
In short, review the project scope, timeline, and budget alongside your skills inventory and employee workload distribution for a clear resource forecast.
With the grunt work done, communicate the strategy with relevant stakeholders before you start assigning resources to projects based on project requirements, employee availability, and business priorities.
From there on, continuously track resource use and make adjustments as needed to keep project bottlenecks and risks in control.
Finally, at regular intervals, assess the effectiveness of your strategy. Determine what’s going well or what went well and what could be improved. This last part is essential for improving your resource allocation to maximize the benefits of a resource planning strategy.
Remember, an effective resource allocation strategy is multi-dimensional as it factors in several factors including project requirements, employee availability and capacity, and organizational goals.
Make sure you put work into developing a grip on all these to efficiently schedule the right people for the right projects.
Looking for a tool to get a headstart in building your foundation for efficient resource management? Here’s our handpicked list of 7 resource allocation tools worth exploring ➡️
