Resource Capacity Planning Best Practices: Advice From Experts
If you’re thinking about implementing capacity planning in your business, you’re probably the kind of person who wants to make sure things get done the right way.
You probably want to make sure you’ve hired the people with the right skills to complete your projects. And that you have enough work to keep your staff engaged — and employed. And finally, you want to avoid burning out your team members.
To help you do an amazing job at capacity planning — so your employees can do an amazing job at their jobs — we compiled some advice for you. We reached out to people who take their own capacity planning seriously.
Keep reading to learn more about resource capacity planning best practices.
4 Resource Capacity Planning Best Practices to Use in Your Business
To offer you the best insights into capacity planning best practices, we reached out to business owners and managers who have actually implemented capacity planning in their organisations. Below are some of their top recommendations for effective capacity planning.
1 Focus on Humans Over Resources
Before you get too far into capacity planning logistics, it’s important to take a step back and remember that the “resources” whose capacity you’re calculating are people.
Of course, considering your employees, team members, and co-workers as human beings and not just numbers on a page should be step one in any serious business plan. But William Cannon, CEO of Signaturely, points out that it’s also critical for the accuracy of your estimates. Without “designing for the human element,” he says, your “projects are bound to experience stress and trouble.”
“Resource planning enables resource managers to consider the team members’ skills and interests before task allocation hence, enhances the team engagement on every project and assures improved productivity.”
That’s because humans aren’t machines. Their work will always be affected by factors that will be impossible to predict in either a spreadsheet or a resource planning tool. A dip in mood, chaotic personal lives, or, heck, a global pandemic, could all require major changes to your capacity plan.
The takeaway: When creating your capacity plan, consider building a cushion into your team’s available hours. That way, your plan can handle a few delays, vacations, or low productivity days.
2 Establish What a “Full” Work Week Means for Your Team
Julian Goldie, CEO of Goldie Agency, says, “Exaggerating employees’ availability is a regular mistake a project manager makes when devising project resources.”
Most industries consider 40 hours per week — or eight hours per day — to constitute a full week of work for a full-time employee. However, most people are actually only productive for four to five hours per day.
“Exaggerating employees’ availability is a regular mistake a project manager makes when devising project resources.”
This difference between an eight-hour workday and five hours of productive work is partially due to time-consuming (but necessary) work, such as meetings or answering emails. This type of work takes up time, but you wouldn’t necessarily bill any of your projects for it.
You can also chalk it up to a pesky little fact of life called context switching. Context switching is the amount of time (typically about 25 minutes) it takes to move from one task to another. That could mean switching from one project task to another. But it could also mean heading back to a spreadsheet after a meeting or simply refocusing on a task after answering an urgent email.
The takeaway: The amount of time you expect your employees to spend on “productive” — or billable — work is also known as their utilization rate. And after taking necessary lags, distractions, and delays into account, that rate should never be 100 percent of your employees’ work hours.
So if you’re considering your project workload — i.e., the work you want done well — you should probably expect fewer than 40 hours of productive work from your employees each week. ClickTime’s capacity planning template, for example, defaults to 80 percent capacity — 32 hours per week — for your team to help you avoid burnout and mitigate delays.
3 Make Time for Growth
Outside of creating wiggle room for project delays, unexpected sick days, context switching, and taking time to answer emails, choosing a utilization rate under 100 percent also allows your employees to make time for other critical tasks.
Goldie suggests that learning and development “is an essential part of guaranteeing that employees are equipped to work on their projects and produce quality.” So while L&D won’t directly contribute to completing the projects currently on your employees’ schedules, it will contribute to higher quality work done in the future.
“Finding some time for training is critical and lets you retain employees more effectively, as people like to learn new things.”
However, Goldie says, “Guess what time is L&D going to cut into? The working hours workers have available to truly operate on the projects.”
The takeaway: When calculating an acceptable utilization rate, be sure to leave time for employee growth so they can continue to do their highest quality work.
4 Create an Efficient Workflow
Ultimately, capacity planning should save you time by helping you understand how to use it more efficiently. That’s why Neal Taparia, founder of Imagine Easy Solutions, suggests “devising a workflow for data management and resource allocation.”
He points out that “capacity planning most often requires a lot of communication.” To ensure that communication is productive, Taparia recommends “properly optimizing it so as not to waste any time on trivial things.”
“To ensure that communication is productive, properly optimize data so as not to waste any time on trivial things.”
An efficient workflow could look different for every organization. But it could involve creating deadlines for everyone to submit project estimates or using a centralized resource planning tool everyone can update as needed.
The takeaway: Capacity planning shouldn’t add significantly to your own workload. Nor should it create more bottlenecks that get in the way of getting things done. Streamline the process to help it move along smoothly.
How to Act on Your Resource Capacity Planning Data
To plan your capacity well, you should follow the advice mentioned above. However, there are also best practices you can follow when deciding how to act on your capacity plan. Below are tips for how to proceed with your capacity data once you have it.
Find the Best Way to Balance Your Workload
You might find that you don’t have as many employee hours available to you as you thought you would after defining a reasonable utilization rate and making room for training. If that’s the case, you need to figure out the best way to get things done with less capacity.
You could always increase capacity by hiring more employees. If you think you’ll continue to experience the same level of project demand, bringing more people on board is likely your best move.
You could also meet project demand in the short term by hiring contractors or freelancers. If you need to meet seasonal fluctuations in demand, for example, you can hire a handful of contractors to meet your needs. You might also consider hiring contractors if you’re missing a skill that you won’t need for the long term. If you have a client particularly focused on high-quality graphic design but don’t employ any designers, for example, you can hire one for the duration of your project.
On the other hand, if you’re finding that you’re overstaffed, you might need to go out and win more projects. Ramp up your sales and marketing efforts to win more clients and find more work for your underutilized staff.
If you’re in a really bad place with overstaffing, you might also need to consider layoffs to bring your capacity closer to your project demands. However, you should remember that layoffs are a last resort. Once you start letting your skilled employees go, you likely won’t get them back. And you might also hurt the reputation of your business, making it more difficult to hire new staff when demand picks up again.
Prioritize Your Projects
You might find that you’re running low on available resources — a.k.a. employee hours — and hiring just isn’t in the cards. However, your projects still need to get done on time. In this case, Jacek Ptak, co-founder of Krakow Direct, suggests prioritizing your projects.
First, he suggests rating them by priority to your company. For example, a client who doesn’t need anything from you urgently might be lower priority than a client who will become irate if you mention a delay.
“Seeing that our employees are assigned to the most suitable tasks, they became much happier with the job.”
Second, Ptak recommends “prioritizing the projects that need more resources than others.” If you have an urgent project that requires 70 percent of your staff, completing that project should become your top priority. That way, employees can move on to other, less urgent projects when they’ve done what they can on your most important work.
Use Time Tracking Tools
Capacity planning will tell you how much time you have available to you. Time tracking tools will tell you where that time actually goes. And understanding how time is actually spent will help you create more accurate capacity plans in the future.
Ptak adds, “Time tracking also provides invaluable insights in terms of which tasks are going well, and which need their workflows improved.” With this information, he says, you’ll be able to streamline your processes and make improvements to future projects.
William Cannon, CEO of Signaturely, also points out that time tracking is critical for managers. While higher-level employees might not undertake most of your company’s day-to-day project work, they will likely create time estimates. He says, “You might believe [a task] only takes 30 minutes, but it could truly be more time-consuming. So you want to begin with a reality check.”
In addition to using time tracking or timesheets, Cannon recommends starting to better understand your employees’ hours by asking them to “rate their general tasks by the level of energy required” to create better time estimates.
He also recommends that when you decide to start tracking time, good examples and encouragement should come from your leadership. Cannon suggests letting your team know that time tracking will “not just profit the business, but also each of them individually by increasing overall productivity and decreasing workload.”
Use a Tool That Allows You to See Resources in Real Time
Remembering that you’re creating a plan that involves humans — and, therefore, human error — is the first step in successful capacity planning. Creating an efficient workflow, building time for training, and balancing your workloads are also critical steps for an effective capacity plan.
But using a system that shows you where your team’s time is going in real time will make you a master capacity planner.
ClickTime’s Resource Planning Tool helps you keep track of utilization rates, project budgets, billing rates, and time spent on your projects, all in one place. Your resource plan will update in real time as employees fill out their timesheets. These immediate insights into your team’s time will help you avoid overservicing, better understand how your employees’ time is spent, and even identify bottlenecks.
Chat with a ClickTime expert to start your 14-day free trial and see how our software can help you improve your organization’s capacity planning capabilities.
