What is Resource Allocation? 12 Best Resource Allocation Tips

Updated Dec 2, 2022.

Effective resource allocation is a crucial project management skill for every project manager and team leader. Many project managers struggle to allocate resources, especially when there are changes to the project requirement.

Effective resource management is one of the biggest project management challenges. The nightmare scenario for a project manager is overworking some team members by assigning them more tasks while underutilizing other team members.

Proper scheduling and allocating tasks to the right team members on time and within the project’s budget is essential for project success. This guide will teach you how to allocate resources on a project effectively.

Let’s get started.

What is Resource Allocation?

Resource allocation is similar to proper resource management or resource scheduling. The resource allocation process involves the proper scheduling of tasks and available resources needed to complete and deliver the project deliverables on time and within the budget.

Ensuring limited resources are sufficient to deliver the organization's strategic goals as and when due is the main resource allocation goal.

Resource allocation is part of the project management plan you should carry out in the project initiation phase.

By incorporating it into this strategic planning phase, high costs likely to be incurred are cut down, and a successful project outcome is guaranteed.

Resource allocation is not a rigid process. It is subject to change if the project requirement or scope changes during project execution.

Resource Allocation Planning
Source: SlideTeam

Benefits of Effective Resource Allocation

Resources, if properly allocated, can lead to client satisfaction and many other benefits. There are several benefits that organizations stand to gain through effective resource allocation.

1. Bringing a Sense of Direction to the Planning Process

Effective resource allocation largely prevents large-scale waste of already scarce resources. Including resource allocation strategies in your project plan ensures adequate information on resource availability and project timelines for ongoing projects.

Resource allocation provides direction to the project plan by detailing the hands of talents and their availability to project tasks.

Project managers play a vital role in allocating resources. They can boast of the best outcome by easing the selection process of employees' work.

Simple Project Plan Template
Source: Smartsheet

2. Improves Project Team Member's Morale

The absence of a proper resource management plan would ultimately lead to poor performance on the part of team members.

Resource management is vital in determining a project's productivity and performance. You can use resource management software for flexible and effective resource allocation.

An effective resource allocation plan takes a significant bulk of stress off the backs of the project team as they are not constrained by poor resource distribution.

Resource Allocation Report
Source: OrangeScrum

3. Keeps the Project Team in Check

Resource allocation tools such as resource scheduling software and strategic planning software provide project managers with real-time updates on the status of tasks and their deadlines.

These tools keep an eye on the resources in use and ensure you manage projects well. A resource allocation plan makes the resources allocation process transparent.

How to Allocate Resources on a Project

Allocating resources effectively involves managing available resources. It is often a short-term plan that guarantees an organization the skills required to achieve goals in the future.

1. Know Your Scope

The project scope is an important prerequisite to determining before considering managing resources. This essential project plan determines the resources and amount to be utilized for a project.

Project scope changes cause you to accommodate changes to your project. With proper project scope management, you are better positioned to consider the most efficient way of allocating resources to ensure they span the project length and result in success.

Product Scope Statement
Source: TemplateLab

2. Identify Resources

Identifying the needed resources to deliver the project successfully is easy if you outline the project’s goals and objectives in the project scope statement.

Emphasize identifying the needed resources and ensuring efficiency in resource distribution. The resources identified should be in line with the project's budget.

You can use project management tools to coordinate the identified project resources to their project schedule and assign them to team members more easily.

Project resources include material and non-material resources, which you must account for during resource identification.

3. Stick to the Project Schedule and Have a Reallocation Plan

The essence of creating a resource allocation plan is to bring ease to the project process. Following your project schedule in detail is one way to ensure a project achieves its goals and objectives.

Project Title - Project Schedule
Source: Vertex42

The act of procrastination is one of the biggest enemies of resource allocation and should be avoided at all costs.

Resources most times would need to be reallocated to other projects as resources often are either under-allocated or overallocated. A swift reallocation plan is important to ensure the project's successful outcome is not compromised.

Your reallocation plan should contain a list of likely allocation bottlenecks and the best approach to dealing with them.

4. Think Holistically

You need to be dynamic in your thinking concerning a project process. Placing unnecessary attention and focusing on the project plan and lesser attention on the execution process can breed a series of setbacks.

In as much as it is good to keep regular tabs on your project estimates and compare them to the progress made, you should not neglect other key project processes that need the same attention span, like resource allocation.

The project manager must be aware of the state of available resources at all periods. By doing this, he can make well-informed choices and adapt to changes not planned for during resource allocation.

Having a thorough overview of project activities provides an advantage in ensuring no key detail gets past you.

5. Know your Resource Dependencies

The easiest way to ensure prompt allocation of resources is by creating adequate measures and structure for it. Draw up a near-perfect plan of various steps and link these steps with similar steps that depend on similar resources for ease of allocation.

Creating dependencies goes a long way in reducing the likely occurrence of bottlenecks or shortages of resources during the project execution phase.

Always draw up a resource allocation contingency plan to counteract the effect of likely resource shortages both in material and non-material capacities.

Create your resource allocation plan so that there is no overdependence on one resource at the expense of others.

6. Keep Close Tabs on Project Schedule

Regularly check in on the status of tasks and projects against their expected due dates. This singular act would go a long way in minimizing project delay to a large extent.

Keeping close tabs on project schedules is a good avenue to check in on the activities of your employees and ensure they are well on track to deliver on their assigned tasks.

You can track the utilization of key project resources and improve time tracking to ensure it does not affect the project due date.

One of the most efficient ways to do this is by keeping track of your team's workload and schedule for the project process. This information allows you to be able to allocate resources better.

7. Use Project Management Tools

Online project management tools can come in handy as one of the greatest assets to effectively managing your resources.

These tools come with real-time dashboards that provide organizations with ready information on the status of their resources deployed to various projects. Project management tools are easily accessible to any project team member.

Another notable feature of a project management tool is its calendar function. It comes with various color options, distinct information on employees, their assignment, and availability for tasks.

You can use project management software to replace a key team member with another employee. With the dilemma of managing many project processes, this tool makes resource allocation relatively easy for project managers.

Most Important Factor in Project Management Software Purchase
Source: TrueList

8. Avoid Over-Allocating Resources

There is always a huge risk of over-allocating resources to specific tasks and projects. This factor can be traced down to poor planning.

Over-allocating resources might look like a relatively safe option in the short term, but it poses more harm than good.

The major disadvantage is that it negatively affects the efficiency and productivity of the project. The excess resources left under-utilized would be accounted for in the overall project cost.

A project's budget is a scrutinized detail that is supposed to attend to the needs of a project. By over-allocating resources, the project team is threatened with burnout.

The best bet is to ensure the resources are distributed evenly in the resource allocation plan to bring out the best quality.

9. Be Realistic

Keep it as realistic as possible to ensure no stone is left unturned in planning your resources. Overcrowding your project with employees or adding extra days to the schedule to give room for expectancies may push your boundaries too far.

Compare your project estimates with the actual utilization plan and ensure they are not far apart before going ahead with resource allocation.

10. Have a Routine

Set up regular check-ins to monitor the use of your allocated resources. Human resource is one of the key resources regularly subject to stress. The project manager must ensure these resources are not overtasked.

Hold regular meetings with employees and get a feel of what is going on that has gotten beyond you. Regular meetings improve team morale and gear it towards the main goal. Create a team meeting agenda plan to help you maximize your meetings.

Team Meeting Agenda for
Source: eForms

11. Compile Resource Allocation Reports

The essence of drawing up a resource allocation report is to track the overall progress of your allocated resources.

This report is compared with the project's initial resource allocation plan and scrutinized for deviations. These deviations might be good or bad depending on how far away the project is from its set outcome.

A resource allocation report helps organizations balance resources by monitoring the team's workload.

Task and variance reports are relevant information birthed from your resource allocation report as they point out the status of assigned tasks against their respective schedules.

Resource Allocation Reports
Source: OnePager

Resource Allocation Methods

Project management offers a series of effective methods that aid in the better management of allocated resources. You can easily tweak these methods based on resource scheduling.

1. Critical Path Method (CPM)

The critical path method (CPM) ensures projects do not deviate from set timeframes. This resource allocation method is based on task dependencies, and the line having the most dependent tasks is the critical path.

CPM efficiently identifies high-priority tasks by calculating the earliest and latest delivery time.

The order of priority given to tasks by this method promotes efficient resource planning by monitoring closely and effecting needed changes in meeting set project timelines.

With all its time management benefits, the CPM method comes short when utilized on a project that depends solely on workforce multitasking. Priority is given to tasks on the critical path above all other tasks.

2. Critical Chain Method (CCM)

The critical chain method (CCM) is a revised version of the critical path method. Unlike the CPM, which depends largely on task dependencies, the critical chain method creates its project schedule based on resource limitations.

This method tackles the challenges of multitasking that the CPM faces by reducing the emphasis on task perfection by providing room for considerable setbacks.

In accounting for resource availability, the critical chain method assumes a system of buffer time as part of a larger project timeline to absorb likely delays. The critical chain method is best utilized alongside the critical path method.

3. Resource Leveling and Smoothing Method

This resource allocation method is effective for a project plan subject to significant changes. The changes would determine if the organization would opt for resource-leveling or smoothing.

The resource leveling and smoothing method modify the project schedule based on the availability of resources, thereby reducing the demand for resources.

Resource Leveling vs Resource Smoothing
Source: PM Training

Resource Allocation Best Practices

The resource allocation process involves using stringent and essential strategies to guarantee the future of a project. Allocating resources is a necessary skill that has prevented several organizations from achieving their goals.

1. Create a Visual Map of Your Upcoming Projects

The lack of a clear picture of the tasks yet to be completed further complicates the effective allocation of resources.

A good and easily understandable guide for upcoming project tasks would go a long way in making the decision-making process much easier. Visual project management tools help make the resource allocation process less hectic and ensure timely delivery.

2. Know the Availability of the Workforce

Having an idea of the project team's availability is as important as mapping out upcoming projects. With organizations constantly dealing with executing multiple projects simultaneously, project managers need to be regularly informed on the availability of their best-skilled hands.

Issuing of vacation time and sick leaves are factors that constantly cause a lack of availability and need to be closely watched.

The biggest danger of not having this information is causing the project team to assign tasks to an unavailable team member. This error can bring significant risks to the project delivery schedule. Knowing your project team's workload is an essential part of resource allocation.

3. Assign Tasks and Get Feedback from the Project Team

With an idea of the employees available at any time interval, you can now delegate tasks effectively based on employees' availability. Each assigned task should carry its dependencies and due date.

Before approving assigned tasks, project managers need to get feedback from their project teams on their availability for these assigned tasks.

4. Choose an Effective Resource Allocation Tool

Using the right tools to link project schedules can go a long way in affecting project productivity. Project managers face the difficult task of keeping close tabs on all the processes that affect a project.

With the use of an effective resource allocation tool, the major workload of the supervisory function is taken from the list of to-dos.

5. Monitor Project's Progress

By putting in place a mechanism to keep and provide regular status reports on the progress of projects, organizations can now plan better for a new project by simply monitoring the outcome of ongoing projects.

If there is a need for changes regarding resource allocation, this is the stage to enact those changes.

How to Handle Resource Allocation Problems

No matter how detailed and constructed your plan for allocating resources is, there is still a huge likelihood of stumbling into resource allocation problems.

The only way of avoiding these bottlenecks is by taking a more proactive measure to counteract their effect. Some of the most widely faced bottlenecks by organizations and effective ways of mitigating their effects include:

1. Change in Project Scope

A scope creep is one of the biggest problems in allocating resources. It amounts to unplanned expenses and changes to the initial project plan.

There is a need for necessary adaptations to accommodate these new developments.

Project Scope statistics
Source: IEEE Xplore

You can avoid scope creep by properly defining your project scope, goals, and objectives and regularly using the readily available tools to track projects' progress.

2. Unavailability of Resources

There are situations even after allocating and distributing resources appropriately that resources fall short of what is required to complete a project.

You can attribute it to a myriad of controllable and uncontrollable factors, but both can cause significant damage if not curtailed.

Work your way around sourcing for immediate replacement for projects where resources are grossly inefficient, be it material or non-material.

You can get this from your backup resource allocation plan or find effective ways of pulling resources from other projects that seem to have excess without disrupting their schedule.

3. Unexpected Delays and Interruptions

For several reasons, there might be a seemingly temporary halt to the project process. If not properly managed, these unexpected breaks can derail the project from meeting its deadline.

The best way of effectively dealing with these unplanned interruptions is to prevent them in the first instance by promoting organization and accountability in resource allocation.

Resource Allocation Example for Project Managers

Resource allocation is different for various organizations, and it all depends on the type of project. Resources can either be in a material form or non-material form. These resources are limited in quantity and often amount to a non-negative number.

A typical resource allocation example is the communication sector taking a network as a case study; the channel's bandwidth offers the resources.

In contrast, the active communication connections are the ones in need of the resources. Or in the manufacturing sector, the machines offer production capacity as a resource while the customer orders are the ones in need of the resources.

In most technical systems, one resource is not used by one entity as they are all required to share limited resources. Using alternatives in the resource allocation process ensures it is a decision-based strategy.

Setting up adequate structures to deal with a wide variety of problems encountered during resource allocation is one of the ways project managers can help guarantee a timely and successful project outcome.

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Anastasia Belyh

Editor at FounderJar

Anastasia has been a professional blogger and researcher since 2014. She loves to perform in-depth software reviews to help software buyers make informed decisions when choosing project management software, CRM tools, website builders, and everything around growing a startup business.

Anastasia worked in management consulting and tech startups, so she has lots of experience in helping professionals choosing the right business software.