How To Calculate Resource Capacity: 5 Key Steps

Calculating and monitoring resource capacity can help you manage bottlenecks, overburdened resources, burnout, and underutilization that can cost your company money.

With the necessary information on capacity, you can avoid reactive planning, misaligned expectations, and unnecessary hiring or outsourcing, and deliver your project on time, within budget, and within scope. 

Resource management software is often the easiest way to calculate and keep tabs on resource capacity.

What Is Resource Capacity?

Resource capacity is the maximum number of hours a person can work. In resource management and project management, this is a key metric to track so you can make sure your team is efficiently utilized, their workload is balanced, and receive the best return on investment for the company. 

Why It’s Important To Measure Resource Capacity

Effective resource capacity planning is all about making sure team members are working on the right projects, using the right skills, and that they’re not overworked or underutilized.

Calculating and tracking resource capacity effectively and sticking to it increases project success, keeps the team productive, and can directly affect the profitability of a project and overall business KPIs.  

• Realistic resource scheduling: Figuring out resource capacity means looking at your team's time in meetings and on side projects, and then seeing what’s left for actual project work. This helps avoid overloading anyone, keeps stress levels down, and makes sure no one’s sitting around with nothing to do.
• Proactive approach to resource forecasting for future projects: Knowing your team’s capacity gives you a clear view of who has time to spare and who’s maxed out. It helps you set better timelines, spread out the workload more evenly, and avoid bottlenecks. Plus, when the whole team is involved in the project planning, adjusting and keeping things running smoothly is easier.

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How To Calculate Resource Capacity

Here’s a simple step-by-step guide to help you excel at resource capacity planning, with tips and examples to make it easy to follow.

For quick reference, here are your formulas for calculating capacity and utilization.

1. Estimate Resource Demand

Start by breaking things down. Look at your project scope, timelines, and the skills needed to complete everything.

• Make a list of all the upcoming projects and tasks.
• Break each project into key deliverables and milestones—what needs to happen and when.
• Estimate hours for each deliverable based on past projects or your best judgment.

For example, if the project includes resource allocation for:

• Wireframing and design = 50 hours
• Front-end development = 80 hours 
• Back-end development = 60 hours
• Quality assurance = 30 hours

Then the total estimated demand for resources is 220 hours.

2. Understand Current Capacity

Figure out how many hours everyone has available to work in a day or week. Don’t forget to factor in holidays, PTO, and other non-project items.

• Pull time tracking reports for project billable and non-billable hours, so you have an initial view of working hours and resource utilization.
• Subtract hours for meetings, administrative work, internal improvement projects and personal time off.

Author’s note:

Depending on how you staff your projects, calculating resource capacity may differ for full-time employees (FTE) and part-time contract or freelance resources. Typically, the part-time resource pool will not have the non-project-related work that needs to be calculated into the capacity planning process, like the FTE resources do.

If, for example:

• A front-end developer's salary is based on 40 hours per week, and
• You subtract 12 hours for internal meetings, code reviews, admin tasks, stat holidays

Then the front-end developer's available capacity is 28 hours.

3. Estimate Workloads

Assess how much time project resources spend on tasks compared to their available hours. Resource capacity planning keeps task distribution fair and makes sure you can efficiently utilize all team members. Assign tasks to team members based on their skills and availability.

• Make sure workloads are evenly distributed.
• Monitor workload regularly to adjust if necessary. Things change. It’s all about avoiding burnout and ensuring no one’s just sitting around.
• To adjust, you can add hours to each task or create a bucket of hours for the project team members to use while working on the assigned tasks. This is best done with software—more on this later. 

If, for example, a team of three developers is responsible for the 80-hour front-end development phase of the website project, then each developer is assigned approximately 27 hours of work.

4. Calculate Capacity

Comparing time you need versus time you have helps you see if your team can handle the workload or if you need to make some changes. It also shows whether there’s room to take on extra tasks or handle any surprises.

• Sum up the total team hours available.
• Subtract total estimated demand from total availability.
• Identify gaps or surpluses.

If, for example:

• Total available capacity across the development team for the month = 250 hours
• Estimated project resources for designing and developing the website = 220 hours

Then this leaves a surplus of 30 hours.

5. Focus on the Big Stuff First & Stay Flexible

Make sure your team’s energy is going to the most important projects that move the needle. Don’t max out everyone’s schedule. Leave some breathing room for last-minute items or surprises.

• Prioritize critical projects.
• Reallocate resources to high-impact tasks based on their skill sets.
• Communicate capacity constraints to stakeholders.

If, for example, there is a capacity shortage of 50 hours, you can hire a freelance UX designer to handle the wireframing and design phase and free up internal resources for development.

Tools For Managing Resource Capacity

When choosing software, start by looking at your current project management software. It might already have resource scheduling tools or capacity planning tools built in and available to you. If not, look through the options for add-ons. With many tools, you can pay an additional fee to add various components.

Then, you can assess what tool may be best for you by asking the questions below to determine your needs.

1. Team setup: How many projects do you usually have going at once? Are your team members juggling tasks across different teams, or are they locked into their projects?
2. Challenges: What’s the biggest headache when managing your team’s time? Is it people being overbooked, not having enough to do, or just not having a clear view of who’s working on what?
3. Project style: How do you run your projects? Are you an agile team, do you follow a strict plan like Waterfall, or use a mix of both? Also, what kinds of projects? Marketing campaigns, app development, design work, or something else?
4. Reporting: How important is keeping clients or your team in the loop with real-time updates? Are you already using dashboards for reporting, or would you need to build something that connects to what you have now?
5. Tools: Do you already have project management software you’re paying for that could handle capacity planning strategies if upgraded? And do you need this tool to play nice with other tools you’re already using, like your CRM or time tracking software?

Here are some of the best tools currently available, if you’re planning to adopt a brand-new tool:

1. 1. Scoro — Best for forecasting team utilization
2. 2. Screendragon — Best for AI-driven resource allocation​
3. 3. Float — Best for intuitive resource management
4. 4. Runn — Best for real-time project tracking
5. 5. Kantata — Best for real-time resource utilization
6. 6. monday.com — Best for simple workload planning
7. 7. MRPeasy — Best for small manufacturers
8. 8. Resource Guru — Best for hassle-free resource booking
9. 9. Productive — Best resource planning and capacity forecasting
10. 10. Hub Planner — Best for midsize and large companies

Best Practices For Calculating Resource Capacity

1. Know your team’s strengths: List everyone’s skills and expertise so you know who can tackle what.
2. Track and analyze time: Use time tracking tools to see how work is distributed and identify bottlenecks or overuse.
3. Learn from the past: Look at previous projects to understand what kind of resources you’ll need for future work.
4. Prioritize what matters: Focus on high-value work, and don’t overcommit to things that aren’t essential.
5. Use the right tools: Sync your project management systems to get a clear, centralized view of all your projects and resources in one place.
6. Plan for the unexpected: Always leave some breathing room for surprises or last-minute changes.
7. Build flexibility: Train your team members to handle different roles so they can step in when needed.
8. Use a template: A capacity planning template (such as the one available through our membership community) can help speed things up by automatically calculating capacity and availability.
9. Communicate clearly and often: Be upfront about workloads, priorities, and constraints. Regularly check in with your team to see how they’re doing and adjust as needed. Also, keep stakeholders in the loop so everyone’s on the same page.

More Resources

Struggling to understand the difference between capacity and resource planning? Read more about capacity planning vs resource planning here.

What’s Next?

Whether you’re focused on keeping project demands on track, avoiding burnout, or maximizing your team's utilization, these tips and tools are here to help. It’s all about finding the right balance and managing workflows effectively while staying flexible and adapting to project delivery surprises. 

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