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Methodologies & Frameworks
4 Important Resource Allocation Methods For Project Managers To Know

In theory, resource management sounds straightforward: break down a project into tasks, apply the necessary resources to execute each task, and voilà—you’ve finished the project! In practice, however, things never go exactly according to plan.

Team members often have to split their time across multiple projects, workers have sick days, and tasks take longer to complete than estimated—these are just a few of the pitfalls that can threaten project timelines.

Your resource allocation process must be adaptable to avoid project failure, but there’s more than one method you can use to minimize and manage setbacks. Below, I’ll outline four major resource allocation methods in project management and their key benefits. Plus, I’ll go over some ways that proper planning can help prevent issues from arising.

In this article:

4 Critical Resource Allocation Methods

Without further ado, here are 4 resource allocation methods that you can use to manage projects.

1. The Critical Path Method

The critical path method (CPM) is a preemptive strategy for keeping a project within time constraints. The CPM calculates the earliest and latest possible start and finish times for a project by assuming that: 

  1. Some tasks in a project are dependent on other tasks, and 
  2. The first task must be started early enough to complete the remaining tasks by the desired deadline

The longest line of dependent tasks in a project represents the highest-priority tasks that fall along the so-called critical path. Tasks outside the critical path are said to have slack; they can be delayed without lengthening project duration.

By designating a clear priority order for tasks before a project starts, the CPM aids efficient resource planning. It also allows for close monitoring and easy adjustments during the project to make sure that the timeline stays on track.

Despite its time management optimization, one criticism of the CPM is that it does not allow for multitasking. While the critical path is in progress, the team cannot move forward on any project tasks that fall outside of the critical path. Although this means fewer resources are in use at any given time, it also means these resources need to be available for longer.

2. The Critical Chain Method

The critical chain method (CCM) is a newer technique that grew out of the CPM, with a few key distinctions. While the CPM creates a project schedule based on task dependency, the CCM alters the schedule to consider resource limitations. Therefore, it can be used independently or in conjunction with the CPM.

The CCM also doesn’t put the same emphasis on finding an optimal solution like the CPM. With the CCM, getting it done is good enough. In exchange for perfection, however, the CCM addresses the CPM’s multitasking criticism and offers more leeway for setbacks.

To account for resource availability, the CCM includes buffer time as part of the total project duration. These buffers help ensure timely project completion in multiple ways:

  1. The project buffer adds time between when the project finishes and its intended due date to absorb any delays.
  2. Feeding buffers are extra time at the end of noncritical chains that can give slack to the critical chain (e.g., adding a grace period to account for holidays.)
  3. A resource buffer is placed at the start of the critical chain, allowing time to gather necessary resources before the critical chain begins.
  4. A capacity buffer puts extra resources on hold to avoid delays in the case of sudden issues. However, since this increases the budget, it’s used less often than the other types of buffers.

While the CCM was created to streamline resource use, its use of buffers also facilitates resource monitoring. If the project manager notices that tasks are taking longer than planned and cutting into the available buffers, then they can plan how to recover and prevent the project due date from being pushed.

3. Resource Leveling

Despite methods like the critical path and critical chain that optimize efficiency and provide extra time to deal with setbacks, sometimes the project plan does need to be changed.

With resource leveling, the project manager modifies the project schedule, including the start and end dates, based on resource availability. Resource leveling is beneficial because it reduces demand and protects workers from overcommitment that can lead to burnout. It also gives the project team the time to allocate resources more efficiently based on who is best suited to complete the work, rather than rushing haphazardly to get things done.

To practice resource leveling, first calculate the amount of work team members will perform based on their capacity. Then, compare supply with demand. Are team members with the skill sets required to execute project tasks available at the time you need them? If resource availability does not match demand, reschedule the task to another time (after verifying with your project stakeholders, of course!)

While resource leveling sounds great in theory, it is not always feasible in practice. Only certain types of projects offer flexible end dates. Additionally, resource leveling can sometimes incur higher costs.

Related Read: 5 Resource Leveling Techniques That Work 

4. Resource Smoothing

Unlike resource leveling, resource smoothing attempts to reduce demand while staying within the given time constraints. In resource smoothing, the project manager modifies resource scheduling and allocation as needed, and, in some cases, brings in additional resources to get the job done. 

As a project manager, you’ve probably practiced resource smoothing without even realizing it—for example, by bringing in a more experienced person who can complete project work in a shorter amount of time.

Steps For Effective Resource Allocation

In practice, you will likely use a combination of resource allocation approaches within a single project. To practice resource allocation effectively, follow these steps:

1. Make a Project Resource Management Plan

A project resource management plan lays out the full strategy for resource allocation, scheduling, and use during a project. This includes rented equipment and facilities, purchased materials, and most importantly, team members.

I recommend sharing the resource plan with everyone involved. Proper communication can help prevent issues like resource competition, especially when it comes to overallocated or overcommitted workers.

You can customize resource plans based on your priorities, allowing you to keep track of everything you need throughout the project lifecycle. Plus, they improve accountability and team morale.

2. Use Resource Management Software

Like resource management plans, resource management software helps project managers keep track of everything they need—which is especially important if you’re overseeing more than one project! You can also use resource management software in tandem with your project management plan.

There are a lot of different options for resource management software out there, including tools focused on forecasting, scheduling, and tracking. Take a look at our list of the best resource management software. I’ve included something for every budget and proficiency level.

3. Take Advantage Of Visuals

A work breakdown structure outlines and defines the outcomes and activities of a project. Displaying tasks in an easy-to-follow chart can help clarify responsibility among your team and show them how every project component comes together for successful delivery.

While a work breakdown structure demonstrates project flow and the sequence of tasks, a Gantt chart tracks tasks with specified start and end times.

Learn more about resource planning visualizations here.

4. Be Wary Of Shortcuts

There are other resource allocation methods, such as fast-tracking and crashing. Though there are times when these are necessary, they come with high costs. Fast-tracking work can increase risk and lower the quality of the finished product. Plus, fast-tracking doesn’t work when tasks overlap.

Crashing the schedule focuses efforts on the critical tasks and adds alternative resources to complete them. This increases the budget and may delay other projects that these resources are supporting. If you don’t mind the tradeoff, though, crashing the schedule is one way to decrease project completion time.

Get The Tools You Need

While resource allocation may seem complicated and overwhelming, there are also a lot of tools at your disposal to help you prevent and address any issues. Do you have a preferred planning method or software? Is it one I didn’t mention here? Be sure to let me know, and check out our full archive of tools for digital project managers.

Related Read: 10 Best Resource Allocation Software In 2022

By Ben Aston

I’m Ben Aston, a digital project manager and founder of thedpm.com. I've been in the industry for more than 15 years working in the UK at London’s top digital agencies including Dare, Wunderman, Lowe and DDB. I’ve delivered everything from film to CMS', games to advertising and eCRM to eCommerce sites. I’ve been fortunate enough to work across a wide range of great clients; automotive brands including Land Rover, Volkswagen and Honda; Utility brands including BT, British Gas and Exxon, FMCG brands such as Unilever, and consumer electronics brands including Sony.

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