What Does Resource Allocation Mean In Project Management?

Resource Allocation

To complete tasks on schedule and on budget, project managers must assign team members to the appropriate tasks. A project’s success is largely dependent on its ability to allocate resources effectively, which involves giving the right team members the right tasks.

Resources are a limited resource and a business’s most expensive investment. ROI is thus directly influenced by how an organization makes use of its limited resources. Before going over some allocation advice, let’s define resource allocation.

What Is Resource Allocation?

The scheduling of tasks and the resources necessary to complete those tasks, which includes resource allocation, is a crucial component of resource management. Knowing your resources’ availability and planning their availability to match your project’s timeline are both important aspects of resource allocation.

The project or non-project activities like operations, support, and administration may be the focus of resource allocation. When scheduling resources, it is important to take into account the fact that these resources may only be partially or fully available. Resource allocation must adjust to take these changes into account when the project’s scope or requirements change.

Even though resource allocation over the course of a project can be challenging, it is a crucial component of any thorough project management plan and should be done during the planning stage of a project. This lowers costs, increases output, boosts team morale and promotes client satisfaction by achieving the best result and successfully completing the project.

Benefits Of Resource Allocation

There’s a reason why allocating resources is a top priority for big businesses, little companies, and everything in between. Without it, things may spiral out of control, resulting in employee burnout, subpar work, and missed deadlines.

Let’s examine the benefits of effective resource management.

Helps You Plan

The proper allocation of resources can prevent you from overspending on resources you don’t require or from running out of them midway through a project. When you have the right tools, you can quickly see the resources and timelines for projects that are in the pipeline and make plans accordingly.

Software for allocating resources also provides a better view of your talent pool. It increases the likelihood of success by making it easier to choose the best people for each project and task.

The bottom line: greater financial success for your company.

Improves Team Well-being And Morale

Your workforce may become burned out as a result of poor resource management. In such a scenario, happiness is lost along with productivity and performance. Consider that:

  • Burnout increases the likelihood of employees reporting sick by 26%.
  • 76% of employees agree that workplace stress affects their mental health.
  • Businesses are said to lose anywhere between $221 million and $187 billion as a result of workplace stress.

All of these detrimental effects can be avoided by effectively allocating resources. Real availability must be taken into account in this; not just what is written down. For instance, you might take into account potential sick days, vacation time, and other work-related tasks on their to-do list in place of calculating each full-time employee’s weekly work hours at 40.

By adopting this strategy, the likelihood of overloading employees is reduced, and their well-being and morale are preserved.

Keeps Everybody In The Loop

Monitoring progress is crucial when working on a project together. This typically entails regular updates on the progress of tasks, problems, and milestones. It will take more time and increase the likelihood of mistakes if you use manual tools.

But you can cut down on mistakes and encourage transparency with resource allocation software. Each team member can monitor the status of tasks, and you can quickly send updates to stakeholders.

How To Allocate Resources On A Project?

One of the most important activities in resource planning is resource allocation, which is a strategy you create with the goal of maximizing the resources you have at your disposal in a project. This strategy is primarily a short-term one that was implemented to reach future objectives.

Although it may seem difficult, we’ve got your back. The general advice provided below can assist you in managing project resources more effectively.

Know Your Scope

Establishing the scope of the project you’re working on is a prerequisite for allocating and managing your resources. Is the project big or small, lengthy or brief?

You can decide what resources you’ll need and how many are required to finish the project once you’ve got the answers to those questions.

You’ll be more successful in determining how to allocate your resources if the project scope is clearly defined. In order to properly allocate resources, it is important to take the time to understand the project in its entirety.

Identify Resources

You have to gather your resources now that you are aware that the project’s scope, objective, and tasks must be completed on time and within the approved budget.

The pool from which you can draw, however, is not infinite. As a result, you need to determine who is currently available, what equipment you’ll need or buy, where you’ll be working on this project, and whether there is room for it.

Resource Allocation

Resources must first be available before they can be allocated. Create a list based on the aforementioned criteria, and then make sure it is within the project’s allotted budget.

Don’t Procrastinate

You oversee projects. Planning determines whether you survive or not. It is the same with resource distribution. Waiting until something has already gone wrong means you’ll have to work quickly if at all, to correct it.

Resources will inevitably need to be reallocated. Which of your plans has ever been firmly established? Therefore, you should spend some time during the planning process investigating where and when you might have a blocked team member or task dependencies.

You can be ready to handle them when they happen by creating a resource plan, noting these red-flag warnings, and, more importantly, deciding how you’ll react to them beforehand. And they will continue to exist.

Think Holistically

It’s a problem when you’re so preoccupied with the procedure that you forget to look up the project plan and take notice of what is actually happening. It’s not just a matter of comparing your predictions to the project’s actual progress, though that is also crucial.

The condition of your resources is something you need to be constantly aware of. What is your team’s schedule, for instance, and are any of them on vacation or ill?? Moreover, how long is the site or equipment under the lease? When allocating resources, these are crucial inquiries to make.

Don’t let your tunnel vision cause you to miss any of these details. Despite how alluring it can be to get lost in project metrics, consider the entire project rather than just its component parts.

Know Your Resource Dependencies

Not having to allocate resources at all is one way to do it. This isn’t as mystical as it might sound. Planning is required, which is much less magical and more useful.

By making a plan in advance, you can prevent bottlenecks that keep your resources from being used when you need them most during the project’s execution. Planning also aids in preventing resource shortages. Knowing your resource dependencies makes it less likely that you will experience a bottleneck or a resource shortage.

Having a backup plan in place in case of team member blockages or a shortage of essential resources is a crucial component of planning for dependencies. Avoid making your plans overly reliant on a single resource to avoid problems later.

Track Time

You should always keep a close eye on the time, how your team is working, and their efficiency. Your responsibility is to ensure that a task that can be finished in a day doesn’t take a week. It is possible to enhance time tracking.

The workload of your team must be monitored in order to accomplish this. In order to give you real-time data gathered on a single page that you can both see and schedule in advance as necessary, the appropriate tools are required.

Use Tools

Utilizing project management tools like ProjectManager will help you manage your resources more effectively. Project data is instantly updated using an online tool.

Resource Allocation

On a calendar that is color-coded to indicate whether they are on-task or off-task, on vacation, or ill, you can see how your resources are divided up. Rearranging the schedule is as easy as clicking the keyboard to assist a team member who is overworked.

Don’t Over-allocate

Because of ineffective planning or a refusal to say no, many managers over-allocate, which is detrimental. Over-allocation poses a risk of team burnout rather than completing the project on schedule and within budget.

Do you have this bad habit, if so, be honest? If so, be on guard and steer clear of it. If you don’t, you run the risk of degrading the team’s morale and the caliber of their project work.

Expecting too much of your resources to the point where they become broken is unfair. Reexamine your resource allocation strategy and use it to ensure that the resources you have for the project are distributed fairly.

Be Realistic

Although it’s a good idea to be ready for problems that could occur on your project, you don’t want to hog resources by adding too many people or days to your schedule.

By doing this, you distort the project estimate and undermine the efficiency of long-term planning. Your financial situation will suffer.

Recall how we said to contrast your estimated and actual utilization. This is where the process keeps you properly allocated. Using a tool is essential for getting a precise picture of how the project is progressing, as we mentioned above.

Have A Routine

Managing involves planning, executing, and monitoring. Every aspect is very organized. However, sometimes important details get overlooked, like resource allocation, and you’ll only end up paying for it later.

As a result, you should set up regular check-ins, say on a specific day and time each week, to go over your resources, check your project management tools, and ensure that no one is overcommitted for the upcoming workweek.

Another thing you can do is talk to your team members to find out what’s going on with them on the project’s front lines and to find out if they’re having any problems. You can get a clear sense of your resources by setting up a regular check-in and staying current with your PM software.

Know Your Resources

You cannot manage what you do not understand. Every resource you’ve assigned or tasked to support the project should have the experience, abilities, and personalities you’re looking for.

For instance, you ought to make profiles for each member of your project team. How experienced and qualified are they? The more information you have about them, the better you can decide where to put them in the project and give them the tasks they can handle.

When you were putting together your team and creating job descriptions for each member, you probably already had something similar. As their knowledge and experience grow, keep those files up to date. For the project to be completed, this is crucial.

Use Resource Reports

If you are unsure of the allocation of your resources, you can reallocate them. Despite your best planning efforts, projects change. How can you compare what is taking place on the ground to your plans? Reports.

In order to balance your resources, you can generate a variety of reports that will give you a complete picture of the project and how it is progressing. The workload of your team and whether they are overburdened with work or idle, for instance, are displayed in resource reports, which you can access.

Common Resource Allocation Problems In Project Management

Although resource managers initially oversee the allocation process, it becomes a challenging task as project demands constantly change. Analyze a few typical resource allocation issues.

Resource Allocation

Use Of Legacy Tools Or Spreadsheets

Because it is so accessible, many organizations continue to use in-house, imperfect solutions like spreadsheets for allocating project resources. Due to the inaccuracy of the real-time resource allocation data provided by these outdated tools, errors and double bookings occur. Spreadsheets are extremely time-consuming, constrained, and difficult to keep up with.

Frequent Changes In Project Scope

The project scope can change at any time during its lifecycle in an agile environment. Resource demands may change as a result of modifications to a project’s specifications.

Therefore, it becomes difficult to make frequent allocations to meet the changing demands without an updated resource schedule. The bench size that can have an impact on the bottom line will increase with the abrupt closure of a big project.

Unable To Predict Resource Availability

Resource managers typically take the existing resource pool into consideration when allocating resources to a project. Instead of relying solely on one person, they should also have a backup contingency resource allocation plan. It’s possible for some team members to become suddenly ill, or it might be challenging to use a shared resource because of other commitments.

Resource allocation for projects may encounter difficulties because resource availability can abruptly change.

Project Uncertainties Causing Delays

Uncertainties can arise at any time during the project lifecycle, even after meticulously checking off all the boxes related to the project scope and constraints. The start date of the project might be pushed back, and you might need to reserve some resources without charging for them.

These project uncertainties must be promptly addressed by project managers, for example., dynamic resource allocation, including juggling resources within projects or reassigning them.

Limited Resources In A Multi-project Environment

Several projects are run concurrently by some organizations, which necessitates sharing the delivery’s limited resources. A change in project priorities for one of the projects could result from negotiations with other project managers over the same resources. In addition, one of the other projects will stall and ultimately be delayed.

Lack Of Knowledge And Communication

Project managers occasionally lack a background in business. They are unable to estimate the resource requirements on time due to communication gaps with the team members. Incorrect resource demands result in either an excess or a shortage of resources for the project.

It is discovered during execution, which may have a negative effect on the project. Fewer resources may result in delivery delays, while too many resources will drive up the project’s cost.

Location And Time Zone Differences

Many organizations have adopted an onsite/offshore/nearshore strategy to reduce costs as a result of globalization. The same project has resources distributed across various geographic regions and time zones.

As a result, there is a lack of coordination among the important players, which may result in project delays. There is only a small window for holding crucial meetings and knowledge sharing due to the limited overlap in the two countries business hours.


During a project’s initiation phase, the majority of resource allocation-related activities take place. The duration of the projects and the level of resource demand can differ.

Allocating resources is probably not particularly complicated. But despite its significance, project managers frequently ignore it. Whether you’re a team of two or 200, your ability to identify and utilize each member’s unique skill set and manage their availability will determine how effectively you allocate your resources.