When you think of the most important elements of project planning, what comes to mind? You probably think of the project’s main objectives, the timeline for achieving those objectives, and the scope of what you can accomplish within the project.
But achieving any of these elements hinges on one thing: the resources available for your project.
In project management, resource allocation can help you ensure your project team has the assets—whether that’s budget, tools, or team members—to hit the project’s objectives. Effectively allocating resources can help you achieve your project goals on time and on budget.
If you’ve never created a resource allocation plan before, this article is for you. We’ll walk you through five steps to allocate resources effectively. Then, get a preview of common resource allocation challenges—and what you can do to get ahead of them.
Resource allocation is the process of identifying and assigning available resources to an initiative. Effective resource allocation makes the best use of team resources while maximizing resource impact and supporting your team’s goals. To create a resource allocation plan, identify the right resources—including team members, tools, budget, and more—you need to accomplish your project deliverables.Read: What is a deliverable in project management?
A resource is anything that helps you complete a project. This can include:
Ideas, intellectual property, or specific skill sets
Tools or software
Automated processes that reduce work about work
The person responsible for resource allocation varies based on the size of your organization. For smaller companies, the project manager or team leader typically manages the budget, assigns resources, and coordinates project work.
Alternatively, at larger companies, the project manager and project budget owner are often different people. As a result, you may need approval from important project stakeholders or your project sponsor before allocating resources.
If you aren’t sure who should be allocating resources, ask yourself these two questions and identify who is best equipped to answer them:
What is the budget, and who is approving it? You’ll need a budget for tools, technology, freelancers, and equipment.
What are the team’s priorities, and who has time to work on this initiative? Before you allocate human resources, think through each team member’s capacity and priorities. How can you help team members do their best work and have the highest impact?
If you aren’t sure what’s on everyone’s plate, use a workload management tool to view team member capacity, get ahead of upcoming projects, and spot burnout before it happens.Learn more about workload management software
An effective allocation strategy identifies the project’s goals and priorities and collects resources to fit the project’s needs. Resource allocation should be an early project consideration—ideally, aim to allocate resources during the project planning phase.
In order to understand your project’s priorities, how important it is, and how it should be resourced, you first need to outline the project’s objectives. This is the first step to any project. Project objectives are attainable, time-bound, specific goals you plan to achieve by the end of your project.
If you haven’t already, align on:
The project’s main goals and objectives
The project’s key deliverables
A high-level timeline or project roadmap
In resource allocation, a resource is anything that helps you achieve your project objectives. Depending on your project’s needs, this includes the project team and any tools, budget, equipment, or skills you need to hit your project deliverables.
Before you actually allocate resources, understand what’s available. There are a few dependencies to look out for, including:
What is the project’s priority level? This influences how it should be resourced. Is this an all-hands-on-deck project that’s contributing to a company OKR, or is it a lower priority initiative? Come up with an internal tier system for project priority to guide how you’ll staff each project.
Who is available to work on this project? Take a look at your team’s capacity to understand what they’re working on. If this project is more important than their current work, see if there’s anything you can deprioritize or reschedule to accommodate this new work.
What budget or tools are available? Does this project have a budget? Are there additional tools you need to invest in or develop in order to complete this work?
What additional resources do we need? Do you need any cross-functional team members to work on this project? Alternatively, are there unconventional resources—like very unique skill sets or new equipment—you need for this project to succeed?
Who needs to approve the resource allocation plan? If someone other than you is in charge of budget, tooling, or team workload, check in with them to make sure this resource allocation plan looks good. Are there any additional project stakeholders who need to be looped in during the resource allocation process?
To scope a new project, you first need to understand the project’s goals, deadlines, and project deliverables. This helps you get a sense of your project needs so you can hit your goals on time and on budget.
A clear project scope also helps you avoid scope creep, which is what happens when the asks and deliverables exceed the pre-set project scope.Read: The quick guide to defining project scope—in 8 steps
Now that you have a sense of your available resources, surface that information to the larger team. Invite your project team to a project kickoff meeting, and share:
Your project plan
Relevant project milestones
The project schedule
Any task dependencies to keep an eye on
Track all of this work with work management software. It’s important for your project team to know which resources are available for this project—and also to have a central source of truth for this information in case it changes. With a centralized work management system, you can clarify project priorities so everyone understands the context of the work. That way, if something does change, you can reprioritize based on the highest-impact work.
Once your project is underway, monitor project progress in case of any unexpected resource allocation developments. No matter how well planned your project is—things can change. Team members go on vacation, a client might be delayed in getting back to you, or your business goals might change. Track project progress in real time so you can adjust if necessary.
Done correctly, resource allocation can help you hit your goals, increase your impact, and maximize your resource utilization. You’ll get better at allocating resources as you go, but if you’re just getting started, here are some common challenges—and how to avoid them.
The biggest issue to avoid during resource allocation is overwork and burnout. Team members get overworked when they work too hard, too much, or too long. Prolonged overwork can lead to burnout, which the World Health Organization defines as an occupational phenomenon resulting from chronic workplace stress.
Without visibility into what everyone is working on—especially if you’re managing work across multiple projects—it’s easy to assume team members have the time and bandwidth to work on your specific project. This lack of clarity can lead to accidental over-allocation and, eventually, burnout.
To prevent overwork and burnout, proactively evaluate team member workload. With capacity planning, you can get ahead of burnout and make sure team members aren’t overwhelmed or underworked. This is critical because, according to the Anatomy of Work, 71% of knowledge workers reported experiencing burnout at least once in 2020. With proactive resource management software, you can promote balance—instead of burnout.
Sometimes, things change after you identify and allocate available resources. You might be waiting on a team member to finish a project before getting started on your initiative—but what happens if that project gets extended?
Even the most careful resource allocation can’t predict every business contingency. To avoid unpleasant surprises, use a tool to track resourcing information in real time. That way, you can immediately see if a project is delayed and pivot your own work accordingly.Learn more about workload management software
The average knowledge worker spends 60% of their time on work about work—things like searching for documents, chasing approvals, switching between apps, and following up on the status of work. That leaves only 40% of each day for skilled and strategic work. More often than not we take this time consuming “stuff” for granted as part of work, but it doesn’t have to be. That’s where resource utilization comes in. Resource utilization describes the percentage of a team member’s time that is spent on billable work, or tasks that contribute to overall profitability.
High resource utilization isn’t about squeezing out the maximum amount of productivity from any given team member. Rather, the key to maximizing utilization is impact. When team members understand the relatively priority between different work, they can spend their time where it’s most effective—and have the highest impact as a result.Read: Why social loafing is more about clarity than productivity
Resource allocation can help you set your project up for success from day one. Clarify resource availability early on to know exactly what you can support and how you’ll hit your project goals.
But, like any element of the planning process, resource planning isn’t infallible. If you haven’t already, supplement your resource allocation plan with other contingency plans—like a project risk management plan.