6 Effective Ways to Mitigate Resource Risks in Project Management
Do you face challenges securing specialized skills for your projects in advance?
Is your organization experiencing frequent unplanned employee attrition?
Are you finding it hard to identify suitable candidates for critical positions?
If your answer is “yes” to the above questions, it’s high time to develop strategies to mitigate these resource-related risks. If not managed well, these resource risks can lead to project delays, compromised deliverable quality, budget overruns, reduced profitability, etc.
Thus, organizations should anticipate and address them to ensure successful project completion and delivery.
This article elucidates several techniques to prevent resource-related risks and how SAVIOM can help.
But first, let’s understand:
- Resource-related risks: definition & types
Resource risks are unexpected events that have the potential to adversely affect the project and the business in case of their occurrence. If not managed properly, it will affect the project scope, timeline, and budget, resulting in sudden halts or failure.
Some of them are:
- Lack of skilled resources
In multifaceted projects, skilled resources are required to fulfill the project demand. However, these resources might sometimes be unavailable due to inaccurate forecasting of project requirements, resulting in last-minute firefighting.
- Employee burnout
When managers lack visibility into resource schedules and availability, it can cause double bookings and overallocation. This results in stress, burnout, disengagement, and eventually unplanned attrition.
- Absence of succession planning
When critical resources leave the organization, replacing them becomes difficult. The absence of a backup plan can widen the demand gap and suddenly stall the projects. Further, the unavailability of resources may overburden the existing employees with additional work, impacting the project’s progress.
- Increase in bench size
Frequently, during projects, when substantial tasks are accomplished, there is a sudden ramp-down of resources, increasing the bench size. Furthermore, last-minute project cancellations due to budget constraints can increase the bench size, resulting in talent and financial loss.
Given the various resource-related risks, the following section elucidates the ways to combat them.
- 6 Ways to Mitigate Resource-Related Risks in Project Management
Managers must be prepared with a few proven strategies to reduce resource-related risks, as follows.
2.1. Forsee project demand to identify resource shortage/ excess
When a pipeline project reaches a certain probability of approval, the project manager must estimate the resource requirements and raise the request accordingly. The resource manager can then evaluate the demand and examine the internal pool for availability to identify and mitigate any resource shortfall/excess.
For instance, they can implement upskilling, training, hiring, out-rotation/ backfill strategy, etc., to prevent resource shortage. Conversely, to avoid resource excess, they can bring forward the project timelines or sell the extra capacity. This will reduce unnecessary hiring/firing cycles and ensure the project’s timely initiation.
2.2. Hire the right mix of resources to prevent project delays
Based on the project’s requirements, managers should create a judicious mix of employees for successful project delivery. For instance, an accounting firm requires a data analyst to prepare a financial report. Managers should first leverage internal channels to identify and deploy the employee with analytics skills.
If this skill is unavailable, they can hire contingent employees if the requirement is one-off or short-term. However, they can hire permanent analysts if the demand is recurring or long-term. Thus, maintaining the right resource mix helps organizations fulfill project demand effectively, control overhead costs, and avoid delays.
2.3. Facilitate competent resource allocation to enhance productivity
Allocating less experienced employees to critical projects can lead to stress and burnout. Contrarily, assigning highly skilled resources to low-priority projects can cause disengagement and lower productivity. Therefore, managers should have clear visibility into resource attributes like skills, interests, experience, qualifications, etc., and allocate the best-fit employees to projects.
Deploying the right workforce to suitable projects will help managers maximize employees’ productivity. Further, it will ensure that projects are completed within the estimated timeline, enhancing the firm’s profitability and brand reputation.
2.4. Optimize resource utilization to eliminate employee burnout
Uneven workload distribution can cause resource under/overutilization, leading to low morale, disengagement, stress, burnout, etc. Therefore, managers must assess the availability and capacity of the employees before assigning them to tasks/ projects. Further, managers can track their utilization levels regularly to identify under/overloaded employees.
Accordingly, they can implement optimization techniques like resource leveling/ smoothing to optimize resource schedules. Further, managers can mobilize employees from non-billable to billable tasks periodically to maintain a healthy resource index.
2.5. Facilitate effective bench management & boost billability
An increased bench size can negatively impact the organization’s financial health and lead to revenue loss. Therefore, it is necessary to implement measures to reduce bench size and improve resource billability. For this, managers should foresee the resources being rolled off from projects and find suitable work to redeploy them before they hit the bench.
This ensures continuous billability of the resources and enhances revenue. Further, on-the-job training/shadowing opportunities can be implemented for benched employees with partial skill matches. It will enable them to become versatile and deployable across multifaceted projects, reducing their idle time and increasing productivity.
2.6. Create a backup strategy for succession planning
During the project execution phase, unexpected situations like a critical resource suddenly going on leave or quitting can affect the project delivery. For example, a product development project has reached the validation phase, and the lead analyst unexpectedly takes a long leave. This can potentially lead to a delay or standstill.
To mitigate these unplanned absenteeism or attrition risks, managers must identify potential talent for critical roles. They can then create a succession plan that provides appropriate training/upskilling measures to prepare the employees for key positions. It helps reduce the over-dependence on limited critical resources and boosts the organization’s ability to take up more multifaceted projects, enhancing revenue.
Now that effective ways to mitigate resource-related risks are clear, let’s understand how resource management software can help.
- How can advanced resource management software help?
Organizations must leverage advanced ERM tools like SAVIOM to manage and reduce resource-related risks effectively.
- The tool’s 360-degree visibility of resource attributes like skills, competencies, availability, etc., enables managers to allocate competent employees to projects.
- The skills matrix allows firms to facilitate training and formulate a backup strategy for critical positions.
- Forecasting and capacity planning help managers predict the pipeline project demand, identify resourcing gaps, and take remedial measures to bridge them.
- The utilization reports and color-coded heatmaps enable managers to identify the over/underutilization of resources and take remedial measures to prevent burnout.
- BI offers people-on-the-bench, and project vacancy reports to help organizations assign benched resources to billable/strategic projects.
- The simulation technique allows managers to create and compare various scenarios in a resource-constraint environment and determine the best-fit plan.
- Final thoughts
Companies must manage their resources and effectively alleviate risks to keep projects on track. Implementing the techniques discussed in this article and futuristic resource management software will help organizations mitigate workforce risk, boost profitability, and successfully deliver projects.