How To Do Resource Allocation: Key Steps & Template
Strategic resource allocation helps avoid missed deadlines, burned-out teams, and wasted budget by aligning the right resources and people to the right work at the right time. I’ve seen well-planned projects unravel when workloads, capacity, and priorities aren’t managed (this is especially true when you aren't using resource management software).
This guide breaks down how to allocate resources effectively, improve utilization, and keep work moving without overloading your project team.
What Is Resource Allocation?
Resource allocation is the process of assigning and distributing the available project resources that are needed to complete projects on time successfully.
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As part of the broader resource management process, project managers allocate team member's skills and capabilities (as well as other resources like tools, financial resources, and physical resources) to execute project tasks and milestones on time and meet deliverables.
How To Allocate Resources
Here are the resource allocation process steps to follow for your projects:
1. Determine Scope & Objectives
Start by defining your project objectives, project requirements, deliverables, workflow, project timelines, and stakeholders. You'll need to break tasks down into smaller sub-tasks and identify any dependencies between them. This will help you figure out what resources are required.
2. Determine Required Resources
Next, determine the skills and capabilities that are required to complete the work that you outlined in the previous step. If you have the required skills and capabilities already available in-house, match them to specific team members. If not, you may need to outsource work or bring in freelancers.
3. Determine Available Resources
If you've got multiple projects on the go, your required resources may already be allocated elsewhere. Check resource availability and whether the team members or capabilities you need are occupied with other work.
If they are, you have a few options:
- Reprioritize their existing work to make room for the new work
- Allocate a more junior team member and have the team member you originally wanted to allocate check their work
- Cross-train a team member on the skill or capability required
- Enlist a freelancer or contractor
If resources aren't available when needed, it can delay your timeline, increase your budget, and jeopardize your entire project scope. This is why it's crucial to have a plan B in place.
4. Schedule & Assign Resources To Tasks
After assessing availability of resources, you can schedule and assign resources to specific project tasks using a resource scheduling tool. Create a detailed resource management plan or schedule that outlines the allocation of resources over the project duration.
Distribute resources in a way that maintains a balanced workload and optimizes productivity. This also helps with informed decision-making and avoids overcommitting or underutilizing resources, which might lead to bottlenecks on the project and team burnout.
5. Track Progress, Utilization, & Capacity
Once you've assigned resources, continually monitor and track metrics like resource utilization and project progress. You can also track and calculate resource capacity (this is best done using capacity planning software, which can automate this for you in many cases) to avoid overloading individuals or teams.
This will help identify blockages and maintain optimal productivity levels without overburdening them.
6. Re-Evaluate & Adjust As Needed
As projects progress and circumstances change, re-evaluate resource allocation and adjust accordingly. Remain flexible and adaptable to optimize utilization and address resource allocation challenges or changes as they arise.
Resource Allocation For Agile Projects
Resource allocation in agile environments requires more flexibility, collaboration, and ongoing adjustment than traditional resource planning approaches:
| Typical Resource Allocation | Agile Resource Allocation |
|---|---|
| Resources are assigned based on fixed project plans and timelines. | Resources are adjusted continuously based on sprint priorities and changing workloads. |
| Teams are often organized around departments or specialized roles. | Cross-functional teams work collaboratively across multiple skill sets. |
| Creating a resource allocation plan is done upfront at the start of the project. | Resource allocation is reviewed and refined throughout each sprint or iteration. |
| Project managers focus heavily on long-term forecasting and scheduling. | Agile teams prioritize adaptability, velocity, and short-term capacity planning. |
| Changes to scope or priorities can require significant reallocation efforts. | Teams are structured to respond to changing priorities and customer feedback. |
| Individual utilization is often closely tracked to maximize efficiency. | Team collaboration, sustainable workloads, and delivery outcomes take priority over individual utilization rates. |
| Success is measured by delivering against a predefined plan. | Success is measured by delivering incremental value and responding effectively to change. |
Benefits of Resource Allocation
Effective resource allocation offers numerous benefits for organizations. Let's explore some of the key advantages:
- Increased productivity: Resource allocation helps makes sure your resources can work optimally to achieve the desired project outcomes.
- Reduced waste: Proper allocation helps save your company money for other initiatives.
- Improved resourcing clarity: Resource allocation provides visibility into your resourcing, which helps keep everyone on the same page.
- Increased morale: Effective allocation sets the team up to succeed, which helps to increase performance and buy-in, as well as reduce absenteeism and turnover.
- Decreased turnover: With proper resource allocation, projects experience lower turnover rates, which means higher resource availability.
- More project success: When resource are optimally allocated, you'll see increased resource efficiency, higher success rates, and improved project profitability and ROI.
Challenges with Resources Allocation
Here are some challenges you might run into when you're allocating resources:
| Challenge | How to Overcome It |
|---|---|
| Skill sets and capability shortages | Build resource contingency plans, cross-train team members, and maintain a skills inventory so you can quickly identify backup resources when turnover or staffing changes occur. |
| Skill and leadership gaps | Invest in leadership development, training, and mentorship programs to strengthen project oversight and close resource gaps before they impact delivery timelines. |
| Scope creep | Establish a clear change management process with documented approvals, impact assessments, and resource reviews to prevent uncontrolled changes from disrupting workloads and timelines. |
| Conflicting priorities | Create shared visibility into project priorities, align stakeholders early, and use centralized project management software to reduce miscommunication and prevent resource conflicts. |
| Poor project support | Secure executive buy-in early by clearly communicating project goals, business value, resource requirements, and risks associated with underfunding or deprioritization. |
| Budget constraints | Prioritize high-impact work, improve resource utilization tracking, and use forecasting tools to allocate limited budgets more strategically without overcommitting teams. |
Recommended Tools for Resource Allocation
Here are my picks for the best tools to help you track and optimize project resources:
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Resource Allocation Spreadsheet Template
A resource allocation template can help you create clarity and visibility. You can use it alongside your resource scheduling software to monitor and track resources.
Quick tips for using the template:
- Make a copy before downloading the template.
- Formatting: cells shaded in yellow (e.g. project start date) require your input; cells shaded in gray auto-calculate based on the information you enter.
- Adding team resources: Insert additional rows above the subtotal rows.
- The assumptions column: Use this to track whether human resources are full-time.
- The resource plan sets contingency at 10%. If you'd like to use a different percentage, adjust the formula.
- Use the template's "Remaining Budget" counter to track the project budget.
What’s Next?
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