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How can you enhance your workforce capacity planning

Reports suggest that employee costs can comprise up to 70% of operating expenses in a highly skilled workforce.

Thus, optimal utilization of your resources is critical for delivering successful projects. However, is just a ‘gut-feel’ approach or conventional offline practices are suitable to manage your workforce efficiently?

Definitely not! Because these offline practices lack accuracy and cannot forecast valuable insights, which can result in the wrongful hiring/firing cycle, thereby incurring extra costs to the company. This is the reason why leading companies find it imperative to take a data-driven approach to plan for the needs of the organization proactively. It will minimize the extra costs of misaligned talent deployment.

An advanced capacity planning solution is designed to provide leaders with foresight into the workforce capacity. It provides enterprise-wide visibility into the available skills that lets them decrease the bench strength. Using these insights, leaders can tap into the right potential and allocate the right resources to the right job.

Moreover, this unmatched visibility into critical skill gaps and foresight into capacity and demand for future projects helps leaders to enhance productivity and deliver the best results. Although capacity planning can facilitate you to scale up your resource management game, one question persists,

How to leverage the tool to the best of its benefits and enhance capacity planning?

Here is the answer, followed by some useful tips:

1. Begin with assigning the key resources

The first step towards enhancing capacity planning is using critical resources with a highly specialized skillset for the high priority projects. The reason is that their talent and expertise can impact billable and strategic work in the future. This allocation will help you hit the ground running, and you can start booking more resources as needed.

By setting up a systematic and organized resource profile, you can be in the know of your resource’s abilities and competencies, and if they have taken training in any particular course. Now, how can you use these skills at your advantage? Recognize opportunities that align with your resource’s capabilities and assign them these tasks. You are not only helping your business grow but also enabling your employees to grow professionally and enhance performance. It’s a win-win for both.

2. Strategize with what-if scenarios

As a manager, you don’t want to be caught off-guard with unforeseen scenarios. A robust capacity planning tool caters to this as well. At the nascent planning stages of a project, you can modify the situations and predict the likely outcomes with accuracy. While doing so, you can plan with what suits best to your project and is profitable for the future.
What-if analysis is quite simply, a plan before the plan. The data-driven actionable insights will let you make strategic decisions and empower performance levels down the line. Moreover, you will be spared from unnecessary budget overruns, project bottlenecks when you have unmatched visibility of all the situations well in advance. It will also help you optimize resource utilization and work assignments for future projects.

3. Predict capacity v/s demand

One of the major benefits you can avail from a capacity planning solution is its ability to generate accurate forecast reports. These reports will forewarn you of the future project resource demand and the actual capacity. By leveraging these reports, you can bridge the capacity vs. demand gap (that can result in project bottlenecks) using appropriate resourcing treatment.

What’s more? These predictions will also give you a comprehensive view of excess and shortage of resources (resources gap) you might face down the line. To cater to this, you can implement adequate remedial measures and ensure uniform utilization of resources. Here is a list of potential solutions you can use:

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When there is a shortage of resources: 

  • Adjust project timelines to align with available capacity.
  • Retrain and skill up available employees to fill the gaps.
  • Hire contingent workforce before time to avoid further roadblocks.
  • Optimize Bench Management to minimize bench time.

When resources are in excess:

  • Bring forward project timelines to allocate tasks to the idle resources.
  • Fast-track projects by marketing the capacity available.
  • Bring forward initiatives to meet strategic goals and allow resources to brainstorm and contribute.
  • Allow movement of resources across departments to maximize utilization and reduce bench time.

4. Track the planned v/s actual hours 

Allocating resources is not the end of capacity planning. One major responsibility a manager has is to keep the project costs under control, maximize billability, and reduce resourcing costs. In order to do so, managers must keep a check on the project’s progress, resources’ progress, and the number of hours they log to a task. Why is this information so vital?
The reason behind its significance is, when you have a report of the actual hours utilized by resources, you can compare the same with the planned hours for each task. If your resources exceed the planned hours, you can brainstorm and identify the potential reasons behind it and take corrective measures ahead of the curve. This will keep the project costs in check and keep your firm from incurring any unnecessary costs.

5. Plan, represent and assign

Different types of projects demand different courses of planning. A mature resource manager goes for a hybrid approach to plan these projects. To streamline your staffing, you can follow a 3-step approach of planning, representing, and assigning resources. Here is the detailed explanation of each step:

  • Plan – the most important step to a successful project is a well-channelized plan. You can opt for the best approach that suits your project. For example, you can use work breakdown structures to detail the stages and allocate resources. In other cases when you are not sure of the resources who will work on the tasks, you will require high-level planning and approvals from senior managers to proceed further.
  • Represent – A capacity planning solution is flexible enough to let you represent the resource demand in different units. You can directly represent the demand in headcounts, or FTE (Full-time equivalent- standard working hours of a firm per week), or a number of hours at your convenience. For instance, if you require 4 FTE, that means you need four employees to work for 4 weeks or 4 employees to work for a week and complete the task.
  • Assign – After creating a meticulous plan and listing the resource demand, the last step is to use the advanced filters of the tool, enter your requirements based on role, department, competencies, location, availability, and a number of hours/FTE/headcount and assign the right resources to the right task.

The takeaway

A powerful, advanced, and comprehensive capacity planning tool is pivotal to utilize the talent pool to their best extent. When a resource manager has 360-degree visibility of the resources and their skills, has a provision to toggle and compare scenarios before planning for a project, he/she can build the highest value project and eliminate potential pitfalls.

The above-mentioned tips to scale up your capacity planning process will enable you to empower your decision making, enhance productivity, and help your resources add a more valuable contribution to the firm. Now that the potential benefits of a structured process are clear, have you thought of revitalizing your planning process?

Mahendra Gupta

Mahendra Gupta is a PMP-certified professional with over 18 years of experience in smart workforce planning and resource management domain. He leads Saviom Software’s technical research and development wing. His expertise has helped multinational businesses around the globe diversify their project portfolio.

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