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What Is Resource Allocation? 12 Resource Allocation Tips for Projects


Resources are varied. Everything from the people you’re working with and the equipment they’re using, to the materials and other supplies you need, to even the site where you’re working: it all falls under the umbrella of resources. That’s a lot to allocate! Let’s define resource allocation and then run through some allocation tips.

What Is Resource Allocation?

Resource allocation is an important part of and resource scheduling, which is the scheduling of tasks and the associated resources that those tasks require to be completed. Part of resource allocation is knowing the availability of your resources and scheduling them to coincide with your project timeline.

When allocating resources, it can be for the project or non-project activities, such as administration, support, operations, etc. These resources can be either fully or partially available, which has to be taken into account when scheduling resources. When the project scope changes or project requirements change, resource allocation must also pivot to accommodate these changes.

As difficult as it might be to allocate resources correctly over the life cycle of a project, it’s an essential part of any thorough project management plan and should be done in the planning stage of a project. This helps keep costs down, maximizes productivity and helps with team morale, as well as facilitates client satisfaction by achieving the best outcome and successfully delivering the project.

Once you’ve identified your resources and you’re ready to allocate them to tasks, add them to your project management software. That way you can coordinate them with your project schedule and distribute them across your team. In ProjectManager for instance, you can manage your project schedule, your team and your non-human resources in one place. Build your schedule on a Gantt and track your resource distribution, progress and labor costs in one software. Try it free today!

Allocate resources on the ProjectManager Gantt chart

How to Allocate Resources on a Project

Resource allocation is a plan that you develop with the aim of making the most of the available resources at your disposal in a project, which makes it a critical resource planning activity. This is mostly a short-term plan set in place to achieve goals in the future.

This sounds challenging, but don’t worry we’ve got your back. The following are some general tips to help you with your resource allocation when managing a project.

1. Know Your Scope

Before you can allocate your resources or manage them , you have to determine the scope of the project you’re working on. Is it a big or small project, long or short?

Once you have those questions answered, then you can make the right decision on what resources you’ll need and how many of them are necessary to complete the project.

The clearer the project scope is, the better you’ll be able to figure out how to allocate your resources. Therefore, take the time to get the full picture of the project prior to doing any resource allocation.

2. Identify Resources

You know the scope, objective and tasks for your project needed to be on time and within the budget approved, now you have to get your resources together.

But that doesn’t mean you have an unlimited pool from which to pull. So, you have to see who’s currently available, what equipment you’re going to need or purchase and where are you going to perform the tasks for this project, and is that space available.

Before you can allocate resources, you have to have them. So, make a list using the criteria above and then make sure it fits within the budget allotted for the project.

3. Don’t Procrastinate

You’re a project manager. You live and die by your planning. Resource allocation is no different. Waiting until something has gone awry means you have to scramble to get it back on track if that’s even possible.

It’s inevitable that resources will need reallocation. What plan have you ever created that was set in stone? Therefore, in the planning process, you should take some time to research where and when you might have a blocked team member or task dependencies.

By setting up a resource plan and noting these red-flag warnings, and more importantly figuring out how you’ll respond to them, beforehand, you’re prepared to handle them when they arise. And they’ll always arise.

Related: Resource Planning Template

4. Think Holistically

It’s a problem when you’re so focused on the process that you neglect to lift your head up from the project plan to note what is actually happening. This isn’t merely checking your estimates against actual progress in the project, though that is important, too.

What you must always be aware of is the state of your resources. For example, what is the schedule for your team, are any taking vacation time, are they sick, etc.? Also, what is the duration of the lease for the site or equipment? These are important questions to ask when scheduling resources.

Don’t let any of these details get past you because of tunnel vision. Look at the whole project, not just the various pieces, as captivating as it can be to lose oneself in project metrics.

5. Know Your Resource Dependencies

One way to allocate resources is by not having to allocate them at all. This isn’t as mystical as it might sound. It involves something far less magical and more practical, planning.

By planning beforehand, you can avoid bottlenecks that trap your resources when you need them most in the course of the project execution . Planning also helps you keep your resources from falling short. This doesn’t mean you won’t have a bottleneck or resource shortage, but it’s less likely if you know your resource dependencies.

Part of planning for dependencies is having a contingency plan in place in case team members are blocked or you run low on needed resources. Keep your plans from being over-dependent on one resource to avoid trouble down the line.

6. Track Time

You always want to keep a close eye on the time, how your team is working and if they’re being efficient. It’s your job to make sure that a task that can be completed in a day doesn’t take a week. There are ways to improve time tracking .

To do this you must keep track of your team’s workload. That requires the right tools to give you real-time data collected on one page where you can both see and schedule ahead when needed.

7. Use Tools

Project management software, like ProjectManager , is a great asset to managing your resources more productively. With an online tool, you get project data instantly updated.

You can see where your resources are allocated across a calendar that is color-coded to note whether they’re on- or off-task, on vacation or sick. Rescheduling to help a team member who is overtasked is a simple click of the keyboard.

To see exactly how much project and resource management software can help you allocate resources, watch the short video below. It illustrates all of the benefits of our scheduling features, real-time dashboards, team management tools and more. When there are so many resources to manage, and so many stakeholders to satisfy, do yourself a favor and invest in a tool that will make your life a little bit easier.

Project management training video (cb6j12d0dg)

8. Don’t Over-allocate

Many managers over-allocate, whether because of poor planning or an inability to say no, which doesn’t help. Instead of bringing in the project on time and within budget, over-allocation threatens team burnout.

Be honest. Do you suffer from this bad habit? If so, stay vigilant and avoid it. If you don’t, there’s a good chance you’ll tarnish team morale and the quality of their project work.

It’s unfair to expect so much from your resources that they break. Re-examine your resource plan and make use of it to allocate the resources you have for the project evenly.

9. Be Realistic

While it’s good practice to be prepared for issues that might arise in your project, you don’t want to hog resources by adding too many people or days to your schedule.

When you do this, you’re skewing the project estimate and messing with the effectiveness of long-term planning. It’s going to take from your bottom line.

Remember when we mentioned comparing your estimated to actual utilization? This is where that process helps keep you properly allocated. Using a tool, as we noted above, is also key to getting an accurate sense of how the project is going.

10. Have a Routine

As a manager, you plan and then you execute and monitor . It’s all very structured. But sometimes things like resource allocation falls through the cracks, which is only going to come back and haunt you.

Therefore, you want to set up regular check-ins, say a specific day and time every week, to go through your resources, check your PM tools and make sure no one is over-tasked for the week’s work ahead.

Another thing you can do is speak with your team members, get a sense of what’s going on with them on the front lines of the project, and ask if they have any issues. By setting up a routine check-in and keeping updated with your PM software, you get a clear sense of your resources.

Related:   Best Resource Management Software

11. Know Your Resources

You can’t manage what you don’t know. You should know the experience and skills and personality of very resources that you’ve tasked or allocated to support the project.

For example, you should create a profile for each of the members of your project team. What are their skills and experience? The more you know about them, the better you’ll be able to place them in the project and assign tasks that they can best perform.

You probably have something like this already from when you were assembling your team and had written a job description for each of them. Keep those files up to date as their skills and experiences broaden. This is essential for meeting project requirements .

12. Use Resource Reports

You can reallocate if you don’t know where you’re resources are allocated. You might have planned them out well, but change happens in projects. How can you tell what is happening on the ground as compared to your plans? Reports.

You can generate all sorts of reports to give you a full picture of the project and how it’s progressing, which helps you balance your resources. For example, there are resource reports that give you an overview of your team’s workload and whether they’re over-tasked or idle.

Task reports keep you updated and variance reports help you determine whether the project is proceeding as planned. The latter gives you vital information, such as if you’re behind schedule and need to redistribute the work to get back on track.

ProjectManager's status report filter

Free Resource Allocation Templates

Resources allocation requires accurate and timely data to avoid bottlenecks that can slow down your project. Project management software is the most efficient way to manage your resources, but if you don’t have an online resource management tool there are templates that can help. ProjectManager has free templates for every phase of your project, including ones to help with resource allocation. Here are a few.

Requirement Gathering Template

Before you can allocate your resources, you need to understand what’s required. The free requirement gathering template for Word acts as a means of communication between the stakeholders and the project team. This ensures quality deliverables that meet specifications.

RACI Matrix Template

You’ll also need to organize your resources before you can properly allocate them. Our free RACI matrix template for Excel is a place where you can define the roles and responsibilities of the team members. RACI stands for responsible, accountable, consulted and informed, and the free template helps you place everyone involved in the project within one of those quadrants.

Resource Plan Template

Now you’re ready to build a resource plan to help you manage your resource allocation. Our free resource plan template for Excel lists all the resources you’ll need for the project, how much each will cost and a monthly, weekly or daily chart of when you’ll need them. This helps you organize and schedule your resources: each tab on the template can be customized to match your production schedule .

If you’re looking for a project management tool that can help you implement those tips and manage your resources properly, then look no further. ProjectManager has all the features mentioned above to help you manage your resources, and it’s cloud-based software, which means the information you’re working with is in real-time. See how it can help you by taking this free 30-day trial today!  

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What is Resource Allocation: A Complete Guide for Agencies

Senior Content Marketing Manager

November 29, 2022

Max 14min read

Picture this: You’re throwing a party. Your house is full of celebrating guests. Someone says, “I’m getting hungry… Let’s order some pizzas!” 

You’re trying to figure out how many pizzas to order. Too many pizzas, and you’ll be stuck eating leftover pepperoni for days. Too few and some of your guests won’t get a slice.

But you’re also limited by counter space and the money in your wallet.

How do you feed everyone while also getting the most value out of your money?

Like party organizers, every project manager should know how to allocate resources wisely. No project has an unlimited budget or amount of team members, but you can use resource allocation to maximize productivity and project success. 

It’s all about thorough preparation and strategic planning around making the most out of what you have.

Learn how to allocate enough resources to all your projects so that you get the job done—and everyone gets a slice of pizza. Let’s party!

ClickUp Flexible Time and Workload Tracking CTA

What is Resource Allocation?

The benefits of effective resource allocation, how to manage resources and set client expectations, resource allocation examples and templates, resource allocation is a constant work-in-progress.

Resource allocation is the process of identifying all your available resources—whether it’s labor or monetary—for a project and then strategically assigning them to tasks that enable them to do their best work.

For agencies juggling multiple projects for different clients, resource allocation is key to making sense of creative chaos. Matching the right person, or resource, with the right project makes everyone happier in the end. Your staff gets to work on the projects they’re best suited for, so clients are likely to receive high-quality project deliverables and results. 

As projects evolve and client expectations change, resources are reallocated to keep progress on track with project timelines.

What counts as resources?

Your resources are all the company assets necessary to complete tasks or projects. These may include:

Who’s responsible for resource allocation?

Usually, project managers are responsible for resource allocation because they have the most visibility and control over project budgets, scope of work, and task management. However, large organizations might separate these responsibilities across several roles or have dedicated resource management departments.

Related: Resource Leveling

Not allocating your resources well is like sending just one person to pick up ten pizzas on their own while the other 15 people chat at home. It’ll take one person much more effort and time to get those pizzas, which runs the risk that everyone might be stuck eating cold pepperoni. 

Why not send three people to help out, so everyone can enjoy a warm slice ASAP? 

Resource allocation enables you to use your labor, money, and assets to their full potential , so clients are likely to receive high-quality work. At the same time, your agency minimizes team burnout by distributing work evenly. 

Other benefits of resource allocation include:

Since resource allocation takes stock of the available resources for a project at a given time, it is a short-term plan—but it has long-reaching effects. It’s a critical tool for capacity planning and managing client expectations. With effective resource allocation, your project has everything and everyone it needs to be successful, including the right resources and a realistic time frame. 

Bonus: Capacity Planning Tools & Capacity Planning Templates

Define your project scope

No chef starts cooking without picturing what they’re going to cook, right? 

Similarly, the first step in project management is to define the scope of your project. Without understanding your project scope , making resource allocation decisions is impossible!

As part of your project scope, you need to define the following:

Your project scope helps you plan out and understand a new project at a high level. Use this information to:

Take stock of your resources

Before picking toppings for your pizza, you have to know what toppings are available—and what everyone’s preferences are. Similarly, to pick the best resources for a job, you must first understand what each person does best and what kind of work they prefer to do. 

When project planning, you should understand the capability of your team and the quality of resources you have at your disposal. That way you can allocate those resources where they’ll be most effective. 

What are their strengths and core areas of expertise ? Match your project requirements to the resources that can execute those needs. 

Agency resource planning example

Say your project involves running a pay-per-click ad campaign for a B2B SaaS client in the business intelligence sector. You have two PPC managers at your agency: Jason, who has worked with other B2B tech clients before, and Sara, who has mainly worked with B2C direct sales clients. 

Sara says she’s less comfortable managing PPC for this client because she doesn’t know much about B2B software, much less a highly technical industry like BI. Meanwhile, Jason is confident he’s the right person for the job due to his past B2B experience.

For this project, you’d definitely want to place Jason on the account!

What is the availability and bandwidth of your resources? Team members rarely work on just one thing at once, but everyone is limited by the number of hours per week or day they can work. You want to ensure that your team has enough work hours to assign to this specific project.

Remember that absences, whether planned or unplanned, affect availability, so assign employees to tasks with contingency periods in mind. Employees can (and should) take paid time off or sick leave, which means they’re unavailable on those days. 

Meetings can take employees away from project tasks even during regular work days. Plus, everyone needs at least 15 minutes in their day to walk the pup or get a pumpkin spice latte! 

Never over-allocate resources . Overallocation can lead to burnout and lower productivity. The success of your project is never worth sacrificing the happiness and usefulness of your team. 

Refer to calendars and schedules when allocating your resources, and adjust timelines accordingly to accommodate resource availability. Optimize resource utilization so that your projects always have just what you need. 

Directly assign tasks to team members for full visibility

Once you know what your project team can achieve, the next step is to delegate the right tasks to each person based on their skill sets and availability. 

Set your team up for success ! Provide as much information as possible to ensure everyone understands what’s expected of them. Clarify all the need-to-know details for each task—the responsibilities, expected results, and due dates. 

In ClickUp, it’s easy to cut your pizza of a project into smaller slices with tasks, subtasks, and checklists. You can then quickly assign each action item to your team members in just a few clicks!

Here’s a closer look:

For some tasks, a single person is just not enough—especially when you have tight deadlines.

Luckily, with multiple assignees in ClickUp , you can quickly assign more people to a task if needed. So the next time a task needs that extra pair of hands, you’ll be able to assign them in a jiffy.

Plan around dependencies to avoid overuse of limited resources

The pizza delivery person won’t reach your doorstep unless they can park first. If your driveway is full, the pizza party is off – and that’s simply not an option. 

Similarly, projects inherently have dependencies —relationships between tasks and resources that affect those resources’ availability. 

Consider resource dependencies , where multiple tasks require the same limited resource. Let’s say you need 10 new graphics designed by Friday, but only have one designer on the team who’s already allocated to other projects until Wednesday. 

In this case, you would need to adjust your project schedule to realistically accommodate your team’s limited availability . Or look to hire another graphic designer, whether full-time or freelance, to provide the support needed to meet your deadlines. 

Reschedule dependencies to visualize the impact

Task dependencies also occur when one task’s progress depends on the progress of a separate task. For example, you have to wait for clients’ feedback before completing project revisions in line with their requests. Like rolling out a lump of pizza dough into a perfect pie before adding tasty toppings!

Stagger and schedule tasks based on these dependencies. Keep an eye on any potential bottlenecks and make sure that no one is left waiting on others for too long. Maintain constant communication around outstanding tasks and action items, and adjust expectations accordingly around project delays.

Consider adopting an Agile or Scrum project management methodology to eliminate or circumvent dependencies. 

ClickUp’s Dependencies help you map out the links between tasks and resources . This way, you’re able to keep tabs on all your project dependencies before they ever have a chance to become blockers. 

Here are more ways that Dependencies keep your team focused:

You can add Dependencies to individual tasks manually, or visually by drawing links between tasks on a Gantt chart . 

Track progress and reassign resources accordingly

Ideally, you set resources for a project, and it goes according to plan. But if there are any delays or changes, you may need to reallocate resources. 

Don’t panic! Reallocation is a normal part of resource management. 

The first step is to keep a close eye on team capacity as it relates to fulfilling your project requirements. Ask these questions when looking at your current capacity: 

If so, the next step is communicating changes with your client or project stakeholders . Keep them in the loop about your project’s progress as early and often as possible, including any potential shifts in scope or delays. 

This helps manage expectations so stakeholders are less likely to be caught off guard, disappointed, or surprised by changes or setbacks. 

The resource allocation process may involve rescoping your project and finding additional team members to help with the extra work. Some companies create a backup resource allocation plan by identifying employees with relevant skills that can fill in as needed or maintaining a pool of freelancers who can provide support on the fly.

You also may need to adjust timelines and deadlines for all tasks in your project to reflect your team’s capacity and account for unanticipated delays. 

Allocating your resources by itself, plus reallocating tasks down the line, can be a lot of work, but it doesn’t have to be hard work!

Consider using resource management tools that keep your team on track with centralized visibility. No need to dig up all your various spreadsheets, docs, and post-its, or constantly switch between all your team members’ calendars. 

We might be biased, but we believe ClickUp is a great (dare we say the best?) resource allocation tool. It brings all that information into one place so you can keep track of your progress and team capacity in real-time. You can create customizable Dashboards to see how your team is doing and where you might fall behind. 

That’s one way Diggs uses ClickUp to stay on top of its projects. The results? Greater transparency into workload management , less time spent on back-and-forth communication, and more productive use of everyone’s time.

We’d call that a win!

Minimize scope creep

You can order what you think is enough pizza for everyone at your party, but you can’t always anticipate how much they’ll eat. What happens if you unexpectedly run out of pizza? 

Aside from shedding some tears (understandably), you now need to shift gears to meet your goal of feeding all your guests. 

This is a case of scope creep —a project expanding beyond its original scope and requiring additional resources, including extra time, money, and people. Scope creep threatens your project’s success by adding extra work without extending the project timeline, creating extra pressure on your team members to do more in less time. 

You can try your best to prevent scope creep by setting firm boundaries in your project scope statement, but sometimes it’s unavoidable. In those cases, good change management puts structures and processes in place to mitigate scope creep. 

It establishes expectations that decision-makers will inform you about scope changes ASAP and give you the space and time to reallocate or add resources accordingly. 

Going with the flow is important, but so is preventing overwork by overloading your team! They have a pizza party to get to, after all.

Let’s say you’re a project manager in charge of launching an influencer marketing campaign for Marinara , a mobile Pomodoro timer productivity app. Here’s an example of what your resource allocation plan might look like:

Ready to identify and allocate your resources? ClickUp is here to help! It’s completely free to sign up and start using in seconds . Get started with these resource allocation templates , designed to kickstart your project management into hyperdrive today!

The ClickUp Resource Allocation Template

ClickUp resource allocation template

ClickUp’s Resource Allocation Template helps you keep track of the capacity and availability of all your organization’s resources in one place. It comes with these convenient Views:

This template is fully customizable to fit your resource management workflows. Leverage this template to get a comprehensive overview of your team’s capacity and progress toward project completion and deliverables.

The ClickUp Resource Planning Template

ClickUp Resource Planning Template

ClickUp’s Resource Planning Template offers a variety of ways to visualize and allocate your resources throughout your team. 

In addition to the views included in the first template, this template provides two more Views: 

This template helps you proactively plan around your available resources, including budgets and team members’ schedules. Like all of our templates, it’s customizable, so you can tailor it to your needs and make it your own. 

You don’t just allocate resources before your project starts and call it a day. You have to keep a finger on the pulse of your projects, balancing your team’s capacity carefully against your project requirements. Since factors that can impact your project success are constantly changing, you also need to be flexible enough to adjust your resource allocation strategy as needed.

ClickUp is the best project management software for teams, with a robust set of features to help you manage your resources, keep your projects on track, and get things done quickly.  We help project managers and key decision-makers allocate resources and oversee the complete project lifecycle like pros.

See how ClickUp can help you and your team by signing up for free today! 

And keep your favorite pizza spot on speed dial — because you’ll never run out of cheesy goodness with our help!

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Resource Allocation: 6 Steps Every Project Manager Should Know

Here's everything you need to assign the best available resources to tasks and projects..

Stella Inabo

Stella Inabo

Resource allocation helps project managers schedule the best team for the job, and optimize how work is assigned.

Project managers have to match team members to the right tasks to deliver projects on time and within budget. 

Effective resource allocation—the process of assigning tasks to the right team members—is at the heart of every successful project.

But there is a fine line between assigning tasks to the right people and overworking some team members while underutilizing others. According to Float's Global Agency Productivity Report, 74% of workers say they are overbooked once a month. And 26% say having too much on their plate is a regular occurrence. Burdened with too much work, team members might feel exhausted. 

While resource management isn't always easy, it is essential. In fact, 83% percent of executives said the allocation of resources was the most critical management lever for growth. In 2021, it was the third biggest project management challenge for businesses.

We created this guide to show how you can develop a resource allocation process that empowers your team, prevents burnout, and saves money.

What is resource allocation in project management?

To better understand better, let's start with a resource allocation definition.

Resource allocation is the process of assigning the best available resources to tasks and projects. 

Resource allocation manages workloads to ensure under or overutilization doesn't happen. Then, if needed, people are reassigned based on current resource availability and project timelines. It goes hand in hand with capacity planning .

The benefits of resource allocation

There’s a reason resource allocation is a top priority among enterprises, small businesses, and everything in between. Without it, things can get out of hand and lead to employee burnout, poor performance, and missed deadlines.

Let’s look at the advantages of efficient resource allocation.

Helps you plan  

Resource allocation can prevent overspending on resources you don’t need or stop you from running short of them halfway through a project. When you have the right tools, you can quickly see the availability of resources and timelines for projects in the pipeline and plan accordingly. 

Resource allocation software also gives a better view of your talent pool. It simplifies selecting the best people for each project and task, which improves the likelihood of success.

The bottom line? More profit for your business.

Improves team well-being and morale

Poor resource management can lead to burnout among your workforce. When that happens, productivity and performance decrease and happiness disappears. Consider that:

When you allocate resources effectively, you can avoid all these negative effects. This requires taking into account actual availability—not just what’s written on paper. For example, rather than calculating 40 hours per week per full-time employee, you consider potential sick days, vacation time, and other work tasks on their to-do list. 

Taking this approach minimizes the chances of overloading employees and maintains their well-being and morale. 

Keeps everybody in the loop

When collaborating on a project, it is essential to track progress. That usually means regular updates on the status of tasks, issues, and milestones. If you’re using manual tools, this will eat up your time and increase the odds of making mistakes. 

However, with resource allocation software, you can reduce errors and promote transparency. Every member of the team can track the progress of tasks, and you can quickly send reports back to stakeholders. 

It may even help you cut back on daily meetings (and make the ones you do have more productive 🤗).

How to build a resource allocation process

Here's a 6-step resource allocation process that will get your team working smarter—not harder.

1. Map out your upcoming project

If you don't have a clear picture of what tasks are needed to complete a project, it becomes challenging to allocate resources effectively. This is why we recommend mapping out new projects in advance. 

With the project spec in mind, try to come up with answers to the following questions:  

Visually seeing what (and who) you need makes decision-making easier. Maybe you have limited resources and need to hire new employees or temporary contractors to fill in gaps. Perhaps you need to assign more than one person to a task to prevent bottlenecks. 

Using a resource management tool like Float, you can create tentative projects and plan ahead of time. This helps you estimate timelines and identify available resources before starting a project. 

2. Get to know the availability of your resources

Once you've mapped out any upcoming projects, knowing your team's availability top to bottom before kick-off is crucial to success.

Your business is likely juggling multiple projects at once—not to mention you are managing your team's overall availability. Sick leave, time off, and public holidays all affect your team's availability. If you use a spreadsheet, it makes it more difficult to spot these gaps and you could end up booking someone on a project only to discover they are not available. 

Your best bet is to use a resource management tool. Float gives you a bird's-eye view of your team's schedule (including meetings) and their capacity. You can even filter team members by customizable tags to find out who is available to take on work.

allocate resources example

3. Assign tasks and get feedback from team members 

After determining your team's availability, the next step is to delegate tasks to each person. 

For your project to succeed, team members have to know their responsibilities, dependencies, and due dates for each task. Float's integrations with project management tools make it easy to drag and drop imported tasks directly onto your team's schedule. The resource allocator has a full view of availability and can easily detect an overloaded workload and prevent double booking.

Let's say you think a design brief should take roughly two hours to complete, and you assign the task as a block into their resource calendar . You check in with the designer, and you find out that your estimate is off and they need an extra hour to finish their task. All you have to do is adjust the team member's schedule, so they immediately get more time to get the task done right. 🙌

Use Float to save time on manual follow up with @mentions in the notes of any task, time off, or project. Simply type "@" followed by their name. Depending on their settings, notifications are sent via email, Slack, or mobile push. For example, you might alert your manager when you schedule new tentative time off or to check in on a teammate's progress on a task.

4. Choose a resource allocation tool

Keeping track of everything your team is working on isn't easy, so it makes sense to use resource allocation tools to shoulder some of the load. Software creates a level of transparency that meetings and whiteboards simply can't.

Project managers can put things like budget tracking on autopilot while keeping a close eye on their team's calendars in real time. Erin Ward is a studio manager at web design agency Mixd . She manages an ever-expanding team and ensures on-time delivery for all studio projects. One of her strategies is providing the team with an endless supply of homemade cakes (jealous! 🍰). But she also says keeping projects on track comes down to their agency operations. This is possible by using a dedicated planning tool (in their case, Float) to allocate project resources.

"Team visibility is important for us at Mixd. We can see at a glance where our resources are tied up, both in the immediate and near future, which is invaluable when planning future work. We need a simple tool that doesn't get in the way of this important part of running a busy studio. For us, Float is exactly that."

Float is software designed specifically for resource allocation. It works hand-in-hand with your favorite project management tools like Jira, Asana, Trello, Teamwork, and WorkflowMax via direct integrations . 

Project managers can plan tasks in their project management tool and then use Float's visual calendar to allocate them based on their team's workload. The calendar makes it easy to see who's maxed out and who can take on more work. And in cases when you need to schedule a new task, the cost (e.g., the hourly rate x billable hours) is subtracted from the project budget . The budget summary will display red when a project is over budget.

allocate resources example

5. Monitor the progress of the project

After assigning tasks, you will likely need to make changes as the project progresses. You might discover that you have too many resources at your disposal—or worse—you might have overloaded your team and are in danger of missing a deadline.

Knowing how many people are available to work on a project can make the difference in getting it delivered on time and within budget. In cases where that's not possible, it's essential to remain flexible and ready to make changes when necessary.  According to McKinsey , a fundamental goal of resource reallocation is to make moves as opportunities shift. To overcome internal problems with your most important resource (your people), it's important to:

Look out for team members who are overcapacity—especially those working on multiple projects at once. One way to spot overloaded team members is by looking at their time logged. If you notice someone is working more than 40 hours a week, it might make sense to take some work off their plate and allocate it elsewhere. 

Let's say your agency has a new project to work on, but your senior designer has a full calendar for the month. Instead of overloading them, a project manager can look at the availability of all the team's designers and find someone with free time. Or you can adjust the timeline for the project to a time when the designer will be available.

6. Run a post-project evaluation

At the end of any project, host a post-project evaluation to see what worked (and, more importantly) what didn't. Some basic post-project questions to consider are:

Don't hold back in these meetings—it's crucial everyone involved is open and honest about the triumphs and mistakes of the project. Doing so will help your project managers (and the rest of your team) plan and predict the needs of future projects more effectively.

Using resource allocation software, it's easy to pull data. You'll be able to spot which roadblocks you hit and if the estimated hours allocated matched up with the actual project lifecycle.

allocate resources example

How to handle resource allocation problems

Even if you adopt all the right tools and follow resource allocation best practices, you will probably still run into problems. Hiccups are going to happen, so it's best to be prepared! 

Let's take a look at some of the top challenges project managers face and how to overcome them. 

The project scope changes

You did your best to plan resource allocation for your upcoming projects, but there's still the chance of scope creep. Maybe the tasks were more extensive than expected or required skills you didn't account for. 

You need to be nimble and adjust your resources accordingly when this happens. To prevent scope creep , you should:

Sometimes it's impossible to avoid scope creep. In such cases, having a scope change process helps you adapt fast and get back on course. It may look something like this:

Resources become unavailable 

Uncontrollable outside forces prevent scarce resources from showing up as expected. A worker's car breaks down, and they can't get to the office. Or maybe they have other priorities in the organization that trumps working on a task you assigned them. What matters is what you do next.

Work quickly to find a replacement within your talent pool. If there's no one available with the skills you need, hiring a freelancer or contractor may be the best option. You can prevent this in the future by looking at task dependencies. Investigate other responsibilities team members have that may pull them away from the project.

Have a backup resource allocation plan if they are unavailable for whatever reason. One option is to have a pool of freelancers you can count on to fill in gaps on a whim. Temporary staff could be the backup if freelancers aren't an option. 

Resources need to be shared

It's common for projects to share the same resources. This is especially true in smaller organizations that can't afford to hire an extensive staff roster. As you can imagine, shared resources can lead to issues that bog down the pipeline. Project bottlenecks may occur if resources are spread too thin. 

Use your resource allocation software to spot gaps in advance. Closely monitor workloads of team members who move between several departments. It's the best way to prevent over-allocating resources and burnout. 

Unexpected delays 

A delay can hit when you least expect it. People get sick, labor shortages arise, and miscommunication happens. That's when scope creep may rear its ugly head. Some issues are within your control, and others, not so much.

The most straightforward way to deal with issues is to try your best to prevent them in the first place. You can:

The more organized and transparent your resource allocation, the easier it is for everyone to take accountability for their role.

Manage your team’s availability on autopilot with resource allocation software

Integrate directly with Google or Outlook calendar. Set custom work days and hours, schedule time off, import public holidays, and set a status to let everyone know where you’re working from. With Float you get a live view to plan your team’s capacity and workload, to allocate resources with confidence.

A smarter resource allocation strategy empowers your team

Managing resources effectively can make or break any project. More importantly, it can keep your team (again, your most important resource) from burning out.

Resource allocation may not be rocket science. But it's often overlooked by project managers in terms of its importance. Whether you’re a team of two or 200, allocating your resources successfully depends on your ability to identify and utilize their individual skill sets and manage their availability.

With the right tools and resource management in place, it's easier than ever to keep your team happy and deliver successful projects.

Looking for a tool to help your team allocate resources? Join the thousands of creative teams that manage their remote teams using Float. Start your free trial here . 

Plan your resources with the #1 rated resource management software

Allocate resources with the #1 rated resource management software

With Float, you can plan your projects and allocate resources with confidence. Try it free for 30 days, no credit card required.

Related reads

Resource allocation and capacity planning: what's the difference, the ultimate guide to resource planning for project managers, project planning: a 7-step guide to creating effective plans.

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What Is Resource Allocation In Project Management?

Who’s responsible for resource allocation, why is resource allocation important, what are the challenges of resource allocation, step-by-step example: how to allocate your project resources.

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A Step-By-Step Resource Allocation Example For Project Managers

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Resource allocation is a critical step in the project management process . No matter your industry or whether you are running just one or multiple projects, you need resources. This includes things like tools or special equipment, and most importantly, people, to help you deliver the work and get the job done.

Optimally planning and allocating the resources available to you will impact your ability to deliver your project on time and budget . It may also affect your company’s bottom line and your team’s performance and happiness.

In this guide, we will explain what resource allocation is and why it’s important to get this process right, go over some of the challenges you might encounter, and then dive into a step-by-step example.

In this article

Resource allocation is all about identifying and scheduling resources on various activities across your project(s) to achieve your project goals.

Resources in project management refer to anything you require to complete the project, including tools, equipment, facilities, or funding. On most digital projects, however, the key resources are people, so we’ll be specifically looking at allocating your human resources in this article.

Resource allocation often falls to project managers, but some companies may also employ a resource or traffic manager for people planning and staff allocation.

Generally, project managers are concerned with allocating and managing resources for the projects they are accountable for. In contrast, resource managers take a more holistic view and look at resource allocation on a company level. Both roles work hand-in-hand to strategically assign people to projects based on their skills, experience, and availability.

Having access to the right resources at the right time and with the right skill set is critical for project success.

Resource allocation will help you identify and mitigate any risks , such as potential resource conflicts or gaps in availability, and manage your customers’ or stakeholders’ expectations .

Doing this early and often will save you and your company a lot of time, money, and headaches!

Furthermore, assigning resources optimally across your projects can lead to better company profitability, a more balanced workload, and reduced stress for you and your team.

Allocating resources in the literal sense is relatively straightforward — it’s other factors such as resource availability and a fast-moving and ever-changing business and project landscape that make this process challenging.

Your project’s requirements may change, someone on your team might need to suddenly take days off, and your customers or other project stakeholders might throw you a curveball at the last minute.

On top of that, you likely won’t be dealing with just one project, but multiple projects, so there will be competing demands on your resources.

All of these factors will affect how much work your team can accomplish and when .

Without a proper plan in place or good resource management software , it’s challenging to maintain visibility over the constant workload and employee availability changes.

Related: Resource Allocation Spreadsheets: Free Template + Easy Example

Let’s say you’ve taken on a project for your new client, Ezycounting, a rapidly growing accounting firm with annual revenue of $20 million. They’ve come to you to build a mobile app in a timeframe of 6 months. We’ll name this Project Ezy !

Disclaimer : We’ve included examples from the Runn app to illustrate how to allocate resources to your projects. Runn is a modern resource planning and capacity forecasting app that helps project managers to plan and track their people and projects .

Having worked as a project manager myself for many years, I am well familiar with the challenges of resource allocation. I co-founded Runn to solve these issues and help provide you with company-wide visibility across your projects and the people needed to deliver them.

You can try Runn for free at runn.io .

Before You Get Started

1. know your project team’s capacity and availability.

Before you begin allocating your resources to specific projects, it is essential to figure out how much time you have available to allocate in the first place.

Do some of your people work part-time? Do some of your people only work on certain days of the week?

Begin by making sure you know your team’s capacity and how many hours per week or day each employee can work.

screenshot of the runn people planner

Runn’s People Planner gives you real-time access to your resource pool of employees and contractors so you can see everyone’s existing workload, holidays, and availability for allocation.

Related Read: Capacity Planning For Every PM: Strategies + Complete How To

2. Know What Other Work Is In The Delivery Pipeline

It’s also important to know what other work is currently underway and what work is coming up as you may have people working on multiple projects at a time. Things can start to get messy if you over-allocate some people and under-allocate others.

screenshot of runn project planner

Runn’s Project Planner displays all your projects scheduled in the selected timeframe and will show you what’s currently on.

If you’re a Runn user, the People Planner and Capacity Charts are quick ways to see where you may be going beyond capacity.

screenshot of runn capacity charts

Easily view team capacity and workload, as well as confirmed workload for team members.

Scheduling Your Project And Allocating Resources

Once you have an idea of the other projects in your pipeline and how many people and hours you have available, it’s time to get to work on allocating these resources to your project.

1. Understand The Project Scope And Delivery Constraints

Firstly, make sure you know the requirements and deliverables of your project and have identified any delivery constraints, such as:

For Project Ezy, you know you need to deliver a mobile app within six months with a hard launch date in July. 

2. Identify Roles And Skills For Your Project

Now, identify the roles, skills, and seniority level you will need to deliver the project.

Ezycounting requires a native iOS app, so you’ll need someone with Objective-C programming skills. 

As a project manager, you might not always know who will be appropriate for the job. Remember to consult the respective team leads, solution architects, and resource managers. They know their team members well and will have an idea of who on their team would be a good fit or where you may be lacking in skills necessary for project delivery.

Based on the size of Project Ezy and the timeframe given, you predict you’ll need:

3. Map Out Your High-Level Project Timeline

Next, build out a high-level project plan . Work with your team to break down the scope into tasks and activities and estimate how much time you think you will need to deliver the scope of work. The number of hours or days your team will need to complete each task will feed into your project’s resource plan and schedule, so this is an important step.

It helps to visually draw-up the project phases and make a note of any critical milestones, key deliverables, or deadlines throughout the project schedule.

Once you have lined these all up, you’ll be able to see a timeline with start and end dates for the project.

screenshot of runn project phases and milestones

In Runn, you can quickly draw out project phases and add project milestones.

Project Ezy spans from February to July and has seven significant milestones and 5 phases.

4. Allocate People To The Project

Choose the available resources you want to assign to the project, ensuring that they can take on new work.  Remember:

screnshot of runn team capacity

Resolve any overbookings or conflicts by re-allocating the work to someone else or moving the timeline.

You’ve allocated Michelle, Monica, Kenny, and Beyonce to Project Ezy.

screenshot of runn capacity management

Runn allows you to add people to a project by role and skill, as well as alerts you of overbookings and time off in real-time so you can adjust things on the fly.

What if I don’t have the right resources at the right time?  If you don’t have anyone on your project team with the right skill set, you might need to hire a contractor to help you deliver the work.

screenshot of runn placeholder team member

In Runn, you can use placeholders to indicate demand for a role or if you’re not sure yet who on the team will be taking on the work.

You’ve added a placeholder for the developer role while you continue allocating your other resources.

Once The Project Is Underway

As you progress through your project, things don’t always go as planned.

What if your resource allocation plans were too conservative, and you now run the risk of going over-budget?!

An easy way to see how your plans fare against reality is by using project management software with time tracking capabilities and having your team log timesheets throughout the project.

This allows you to identify how you track against your original resource allocation plan and identify any resource or scheduling risks early before they become issues. Frequently checking important resource planning metrics such as utilization and capacity will inform your decision making and avoid over-allocation and team burnout .

screenshot of runn variance report

Runn’s variance report shows the variance between your actual and planned resource allocations.

To stay on track and mitigate any risks, you might have to:

You’re two months into Project Ezy, and you think things are going pretty well. You log into Runn and discover that your staff has all been working over-time. 

You talk to Ezycounting, and they agree to extend the project by two weeks.

An effective resource allocation process involves having a resource allocation strategy before a project starts, assigning the right people at the right time, and keeping track of your plan along the way to ensure optimal team utilization and successful project delivery.

Visibility over your pipeline of work and your team’s capacity and availability is critical, so you can react to changes quickly and adjust your plan effectively.

Subscribe to The Digital Project Manager for more concrete project management information and actionable insights.

Related Read: 10 Best Resource Allocation Software In 2023

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Resource allocation examples

The examples below are designed to give you an idea of how the Hardware resource allocation rules apply as the capabilities of the Pexip Infinity platform are extended in the various scenarios:

Gateway calls — all clients

Gateway calls to Google Meet

Gateway calls to microsoft teams.

In each of these cases, the hardware capacity requirements are described in terms of the HD resources required for a connection. A connection can be a call or presentation from an endpoint to a Virtual Meeting Room or Virtual Auditorium , a backplane between Transcoding Conferencing Node s, or a call into or out of the Infinity Gateway . In this context, a connection is analogous to a port . Note that a Skype for Business client may require two connections (one for the video call, and one for presentation content).

All of these examples are based around using the default Maximum call quality of HD . A Full HD connection typically uses twice the resource of a HD connection and a standard definition SD connection typically uses half the resource. WebRTC connections are assumed to be using the VP9 codec. VP9 calls consume around 1.25 times the resource for calls for main video (i.e. 1.25 HD resources for 720p, and 2.5 HD for 1080p).

All of the examples assume that the endpoints are connecting directly to Transcoding Conferencing Node s. However, the Teams examples also show the effect of routing those calls via a Proxying Edge Node to the Teams Connector . (When a connection is proxied via a Proxying Edge Node , the proxying node also consumes connection resources in order to forward the media streams on to a Transcoding Conferencing Node . A transcoding node always consumes the same amount of connection resources regardless of whether it has a direct connection to an endpoint, or it is receiving the media streams via a proxying node .)

Virtual Meeting Room s

Single non-distributed vmr.

allocate resources example

Pexip Infinity requires 4.25 HD resources . 3.25 HD resources are required by the endpoints (the two standards-based endpoints each use 1 HD resource and the WebRTC VP9 client uses 1.25 HD), and 1 HD resource is reserved by the backplane.

Pexip Infinity requires no additional resources .

The conference uses 3 concurrent call licenses.

Single distributed VMR (standards-based, WebRTC and SfB endpoints)

allocate resources example

Pexip Infinity requires 3.25 HD resources on Node 1 (2.25 for the connected participants, and 1 for the backplane), and 2 HD resources on Node 2, (1 for the connected participant, and 1 for the backplane).

Pexip Infinity requires no additional resources on Node 1. But it requires 1 additional HD resource on Node 2 for the SfB client to receive presentation, so the total resources used on Node 2 is now 3 HD . The same is true if the SfB client were to send presentation.

Single distributed VMR — 3 nodes

allocate resources example

Pexip Infinity requires 2.25 HD resources on node 1 (1.25 for the WebRTC participant, and 1 for the backplane) and 2 HD resources on nodes 2 and 3 (1 for the connected participants, and 1 for the backplane).

Pexip Infinity requires no additional resources on Node 1 for the WebRTC endpoint to send presentation, but does require 1 additional HD resource on Node 2 for the SfB client to receive presentation, so the total resources used on Node 1 is still 2.25 HD and Node 2 is now 3 HD .

Multiple distributed VMRs

allocate resources example

Pexip Infinity requires 5.25 HD resources on node 1, 4 HD resources on node 2, and 3.25 HD resources on node 3.

Pexip Infinity requires no additional resources on node 1 but it does require 1 additional HD resource on node 2 (for the SfB participant to receive presentation), so the total resources used on node 1 is still 5.25 HD and the total resources on node 2 is now 5 HD .

The conferences use 7 concurrent call licenses.

Non-distributed gateway call (standards-based endpoint to SfB client)

allocate resources example

Pexip Infinity requires 2 HD resources : 1 for the inbound leg (endpoint to Pexip Infinity ) and 1 for the outbound leg ( Pexip Infinity to recipient). It also reserves 1 HD resource for a presentation backplane (in case either participant starts sending presentation and it is handled on a different node), so a total of 3 HD resources are used (see diagram).

If a presentation is sent from the SfB client, Pexip Infinity will use the 1 reserved HD resource for the SfB client to send presentation.

However, if the RDP or VBSS presentation call from the SfB client lands on a different Conferencing Node to the video call, then the call will require an additional 2 HD resources (as a backplane is required in each direction between the node handling the video call and the node handling the presentation call, making 5 HD resources in total — 2 video + 2 backplane + 1 presentation).

The conference uses 2 concurrent call licenses in both cases.

Distributed gateway call (WebRTC to SfB client)

allocate resources example

Pexip Infinity requires 4.25 HD resources : 2.25 HD on node 1 (1.25 for the connected participant and 1 for the backplane), and 2 HD on node 2 (1 for the connected participant and 1 for the backplane).

allocate resources example

Pexip Infinity requires no additional resources for node 1 for the Connect app to share its screen. However, it requires 1 additional HD resource on node 2 for the SfB client to receive presentation (a total of 3 HD resources on node 2 ).

If the SfB client was to send presentation rather than receive, we would still require the same 3 HD resources on node 2, and no extra resources on node 1.

In both cases, the conference uses 2 concurrent call licenses.

Gateway calls to Skype for Business meeting s

Single non-distributed gateway call to sfb meeting.

allocate resources example

Pexip Infinity requires 2 HD resources . The standards-based endpoint uses 1 HD resource, and the connection to the SfB meeting uses 1 HD resource.

Pexip Infinity requires 1 additional HD resource for the SfB meeting to receive presentation, so a total of 3 HD resources are used. The same is true if a SfB user were to send a presentation within the SfB meeting .

The call uses 2 concurrent call licenses in both cases.

Single non-distributed gateway call (standards-based endpoint to Google Meet )

allocate resources example

Pexip Infinity requires 2 HD resources . The standards-based endpoint uses 1 HD resource. The connection to Google Meet uses 1 HD resource (it uses VP8).

Pexip Infinity requires an additional 1 HD resource for Google Meet to receive presentation. However, no additional resources are required if presentation content is sent from Google Meet .

Single distributed gateway call (standards-based endpoint to Google Meet )

allocate resources example

Pexip Infinity requires 2 HD resources on node 1 (1 for the connection to Google Meet and 1 for the backplane), and 2 HD resources on node 2 (1 for the standards-based endpoint and 1 for the backplane), so 4 HD resources in total .

Multiple distributed gateway calls (mixed endpoints to Google Meet )

allocate resources example

Pexip Infinity requires 4 HD resources on node 1 (each of the 2 gateway calls requires 1 HD for the connection to Google Meet and 1 for the backplane). It also requires 4 HD resources on node 2 (the standards-based endpoint requires 1 for its connection to the gateway, and 1 for the gateway's backplane; the Skype for Business client requires 1 for its connection to the gateway, and 1 for the gateway's backplane), so 8 HD resources in total (see diagram above).

allocate resources example

Pexip Infinity requires an additional 1 HD resource on node 1 to send the presentation to Google Meet , but does not require additional resources on the other connection that is receiving the presentation from Google Meet . The Skype for Business client requires 1 additional HD resource on node 2 to receive presentation, so 10 HD resources in total across the two nodes.

Single non-distributed gateway call (standards-based endpoint to Teams)

allocate resources example

Pexip Infinity requires 2.5 HD resources . The standards-based endpoint uses 1 HD resource, and the backplane connection to the Teams Connector uses 1.5 HD resources.

Pexip Infinity requires no additional resources for the Microsoft Teams meeting to receive presentation. The same would be true if one of the Teams clients sent presentation content.

Single gateway call via Proxying Edge Node (standards-based endpoint to Teams)

allocate resources example

Pexip Infinity requires 0.2 HD resources on the proxying node , and 2.5 HD resources on the transcoding node (1 for the standards-based endpoint and 1.5 for the backplane connection).

Multiple distributed gateway calls via Proxying Edge Node (mixed endpoints to same Teams meeting)

allocate resources example

Pexip Infinity requires 0.4 HD resources on the proxying node and 5 HD resources on the transcoding node (the standards-based endpoint requires 1 for its connection to the gateway, and 1.5 for the backplane; the Skype for Business client requires 1 for its connection to the gateway, and 1.5 for the backplane) (see diagram above).

allocate resources example

Pexip Infinity requires no additional resources on the proxying node . The Skype for Business client requires 1 additional HD resource on the transcoding node to receive presentation.

* WebRTC connections are assumed to be using the VP9 codec. VP9 calls consume around 1.25 times the resource for calls for main video (i.e. 1.25 HD resources for 720p, and 2.5 HD for 1080p).

© 2023 Pexip AS v 30.1

Resource Allocation: Definition & Examples

Resource allocation - toolshero

Resource Allocation: this article provides a practical explanation of resource allocation . After reading, you’ll understand the basics of this powerful strategy tool .

Highlights include: what resource allocation is, how it is done efficiently, how it is used in practice, what the four production factors are, what scarcity is and what frequently used resources in business are.

What is Resource Allocation?

Resource allocation is the process in which a company decides where to allocate scarce resources for the production of goods, creating merch or services. A resource can be considered a production factor that’s used to produce goods or services.

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Resources can be many things, including labour, machinery, technology, natural, real estate, financial resources, etc. Resource allocation is a fixed element of a successful project and project schedule.

Effective resource allocations allows for team members of a project to keep momentum and respect project timelines. Strategic resource allocation is important because the project scope can change during its execution phase.

Resource Allocation is a management activity that’s closely related to strategic planning and strategic (resource) management and resource scheduling.

The value of these programmes is in meeting organisational objectives. The relationship between resources and strategy is a two-way street. The strategy determines which resources are required, but the availability of resources can also limit a strategy.

Efficiently allocating resources to the right places is complex and often hampered by a number of factors, including scarcity, financial criteria, organisational politics, ambiguous objectives, risk aversion, and a lack of knowledge and information .

Production factors and Resource Allocation

We mentioned that resources are production factors. These production factors are scarce and are considered essential for all businesses. There are four production factors.

These are land, labour, capital, and entrepreneurship . These inputs are essential for producing output.

At a larger scale, you could say that production factors produce all goods and services within a nation’s economy. The sum of all goods and services is called the Gross Domestic Product (GDP).

Land as a production factor

Land as a production factor refers to all natural resources that are available to produce supplies. It includes untreated properties and everything that comes from the earth.

This can also be non-renewable resources, such as oil and gold. Renewable resources, such as wood, are also part of the land production factor.

When people change the condition or composition of land, it becomes a capital good. Crude oil is an example of a natural raw material, while petrol is a capital good as it has been refined. A grassy meadow in the Alps is a natural resource, but the adjacent farm is a capital good.

The income of this production factor, or the reward, is called land interest.

Labour as a production factor

Labour is the second production factor and encompasses all the work done by people. The value of the worker depends on their level of education, skills, and motivation . Productivity is also an important gauge for the success of labour. Productivity measures how much output is produced every hour.

The reward of the labour production factor is wages.

Capital as a production factor

Capital is the third production factor and includes all capital goods, such as machines, chemicals, equipment, and more that are used for the production of goods or services. There is a clear distinction between capital goods and consumable goods.

Capital goods are intended to support production, while consumable goods are the output of the production process. Examples of capital goods are industrial or commercial buildings, or an airline’s aircraft. A private jet is usually not a capital good, since it isn’t used to produce a good or service.

The income that owners receive on capital goods is called interest.

Entrepreneurship as a production factor

Entrepreneurship is the final production factor that’s essential for the production of goods or services.

Entrepreneurship is what drives people to turn an idea into a successful and profitable business. An entrepreneur combines the other three production factors and adds his own entrepreneurship to expand the supply of goods and services.

The income entrepreneurs earn is called profit.

Scarcity refers to a foundational economic problem: the gap between scarce resources and the theoretically limitless needs and desires of consumers. The situation requires that people such as managers and entrepreneurs make choices about how to effectively allocate resources to supply as many consumers as possible with their basic needs , as well as as many additional desires as possible.

Money and time are prime examples of scarce resources. Most people have too little of one, too little of the other, or too little of both.

An unemployed person has lots of time, but little money. A successful manager may be able to retire a little earlier than lower-level employees, but will have had little free time during their working life. People with lots of money and lots of time are rare.

In a hypothetical world in which every resource such as water, expertise, land and food was in abundance, economists would have nothing to study. It wouldn’t be necessary to decide how to allocate resources.

Things work differently in the real world. Everything costs something. In other words, all resources and production factors are scarce to some degree.

Most resources are therefore scarce. This means society (as well as individual businesses) has to make decisions about what to produce and how.

Frequently used resources in business

The following types or resources are often used in business. The categories are derived from the Business Model Canvas .

Physical resources

Physical resources includes assets such as buildings, machines, vehicles, systems, distribution networks, and production facilities. Retailers in particular are highly dependent on physical resources. These are often capital intensive. Wal-Mart, for example, has a huge network of stores and related logistical infrastructure. Others have extensive IT solutions, warehouses, and logistical infrastructure.

Intellectual resources

Intellectual resources include brands, patents, copyrights, proprietary knowledge, and customer databases. These are becoming increasingly important components of a strong business model.

Resources for intellectual property are hard to develop, but once developed, they offer significant value, usually. Companies like Microsoft and SAP are strongly reliant on knowledge and software for intellectual property.

Human Resources

Every company needs human resources, but some businesses rely on them more than others. Human resources are vitally important in creative or knowledge-intensive industries, for example.

An average pharmaceutical company tends to rely strongly on human resources like highly-trained medical professionals. The business model of a company like this has an army of scientists and competent smart people at its core.

Financial resources

Financial resources include lines of credit, cash, financial sureties, or shares. The financial resources can be used to procure the other resources discussed earlier.

How do I ensure Resource Allocation is done efficiently?

The scarcity of resources poses a major challenge for managers in efforts to improve business. How do I find the right people for the right job? Resource allocation in the workplace is often the diligent allocation of resources to tasks based on requirements, skills, and timelines.

This forces managers to allocate these based on a specific situation rather than that it’s a purely strategic choice. Applying practices for effective resource management can make a big difference.

One of the methods is the optimising of the extent to which all involved resources are available. In addition, there has to be a focus on the visibility of resources. We’ll discuss these methods in more detail and offer some tips below.

Resource allocation steps plan - toolshero

Figure 1 – The Four Steps of Efficient Resource Allocation. Want to learn more? Become a member .

1. Apply redistribution

It’s important to make room for strategic redistribution. This is a good first step. Reallocation doesn’t mean that the work being done with an assignment of resources becomes strained.

Strategic reallocation means looking for alternatives to get some extra manpower who can take on more responsibility. This way or reallocation is strongly dependent of the overall visibility of projects and resources. This is essential to employ staff optimally.

2. Diversify

It’s always good to have resources and staff equipped with a broad range of skills, or who are used to performing different tasks. Therefore it’s hugely important that managers recognise and cherish both primary and secondary skills.

If the manager is aware of the abilities of their resources, he or she can quickly resolve any problems that may arise by making the right resources available in the right places.

Take an engineer at a pharmaceutical company, for example. This guy also minored in communication, and vlogs in his spare time. He could be a big asset for the internal marketing department. In addition to product knowledge and knowledge of the technical aspects of the production process, he can also add value to the company’s branding.

This is also good for the employees themselves. Nobody likes to stagnate, and employees will be motivated when given the opportunity to diversify and grow. A good manager doesn’t just understand this concept, but also applies it in his strategy for resource allocation.

3. Stimulate automation

One of the most obvious challenges when allocating resources is the complicated process managers have to comply with when they want to assign new resources to new tasks. This often involves multiple phone calls, email messages, or sending requests to other managers.

An automated resource-allocation process is a special route by which managers can do this independently within a certain scope.

Combined with visibility and transparency, valuable time can now be allocated in other areas. Furthermore, a streamlined process makes it easier to monitor which resources were allocated to which department. This prevents the confusion that can arise when resources cannot be traced.

4. Strive for optimal use of resources

Optimal use of resources means a healthy resource-allocation process. When the use and allocation level of resources is optimal, this means that under no circumstances are too many or too few resources being used.

As a result, the output produced by the company is created as efficiently as possible. Optimal use of resources should be the overall result, rather than a lucky outcome. Each method that is used to allocate these has to meet this criterion.

Resource management in practice

Allocating resources to the right departments is part of resource management. Resource management includes the planning, tracking, and optimising of the use of resources such as space, equipment, and personnel.

This process covers planning and management, checking resources, planning start and end dates for certain projects and resources, conflict management, and regular monitoring to be able to implement any needed changes in a timely manner.

Resource allocation and resource management software

Naturally, resource allocation is relatively easy in smaller companies. Larger companies require more tools. One such tool is so-called resource management software. This is also referred to as planning software for resources.

The software is similar to project management software used by managers to plan, allocate resources, and monitor who is working on what project and what resources are needed.

Effective use of such software makes it easy to track the organisation’s capacity in terms of resources and available skills and report on this. It also makes it easier to analyse historical results and use those to make forecasts regarding resource usage.

Advantages of resource management software:

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What do you think? Are you familiar with the explanation of resource allocation? Are you involved with resource management? Are resources used optimally where you work? Do you ever run into issues related to the effective allocation of resources? What do you consider important in resource management?

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resource allocation

What is resource allocation?

Resource allocation is the process of assigning and managing assets in a manner that supports an organization's strategic planning goals.

Resource allocation includes managing tangible assets such as hardware to make the best use of softer assets such as human capital . Resource allocation involves balancing competing needs and priorities, and determining the best course of action to maximize the use of limited resources and get the best return on investment .

In practicing resource allocation, organizations must first establish their desired goal, such as increased revenue, improved productivity or better brand recognition . They then must assess what resources will be needed to reach that goal.

While resource allocation often refers to activities related to project management, the term is also used in other contexts, including the following:

How to allocate resources on a project

The following five steps are important when allocating available resources as part of project management:

list of project management skills

Benefits of resource allocation

Effective resource allocation offers the following benefits:

Challenges of resource allocation

There also are challenges associated with the resource allocation process, including the following:

Business intelligence is an important component of resource allocation, especially for tracking project performance. Learn about some common business intelligence challenges organizations face and how to handle them.

Continue Reading About resource allocation

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monday.com Blog

Resource allocation: how to complete projects on time and on budget

allocate resources example

Managing a project from start to finish is no easy task. Although project management software is more accessible than ever, a lot of projects still struggle to come in on time or under budget. In fact, many outright fail.

And projects can fail for many reasons , but a big one is poor resource allocation. You don’t have an infinite supply of each resource, so you need to know how to use each effectively without running out.

Below, we’ll explain further what resource allocation is and why it’s vital to managing projects. Then we’ll give you a few tips on how to improve your resource allocation management on monday.com so your projects succeed.

Get started

What is resource allocation?

Resource allocation is the process of strategically planning and managing your project resources so that you can complete tasks based on their availability and capability.

In other words, it’s the process of maximizing the returns on your resources.

Imagine you and your friend are building a rocking chair for your neighbor. But you only have one toolbox. You have one saw, one hammer, one piece of sandpaper, and one bottle of wood glue. Resource allocation involves determining how to best split those tools between members of the team to build a high-quality chair as efficiently as possible.

So, if your friend can hammer in nails more quickly than you (and without hurting themselves), you’d allocate the hammer to them. Meanwhile, you might be more efficient with the saw. And maybe you split the piece of sandpaper in half. Resource allocation saves the day.

What kinds of resources do you have?

Resources comprise any assets that you can use to make progress on a task or project.

Project managers have 2 kinds of resources that they have to allocate:

Who’s responsible for resource allocation?

In small and medium-sized organizations, the project manager is most often the person responsible for making resource allocation and strategic planning decisions.

Larger enterprise organizations, though, may have entire departments dedicated to project management. Said departments may have resource managers on staff whose primary job is allocating resources adequately. See how monday.com can help any size organization resource management with a free trial.

Why is effective resource allocation so vital to project success?

Proper resource allocation helps you achieve the most results with the least possible use of resources. In fact, a 2009 study found that as an organization’s resource management practices mature, its overall organizational performance tends to improve.

Sure, this was a decade ago. But do you really think robust resource management processes have gotten any less important — especially given the increasing number of resources and variables organizations must consider? On the flipside, improper resource allocation can cause plenty of problems, such as wasted money, dissatisfied employees, and lower work quality.

Say you run a restaurant. You have a server on staff who is fast, friendly, and excellent at upselling customers. They bring in hundreds of dollars more in revenue per week than your next best server.

One day, your host quits, and you need someone to fill the vacancy. Proper resource allocation is knowing that the last person you’d want on host duty is your star server. You can’t split them between both positions, either, as that would burn them out.

Instead, you’d look for another server that isn’t performing as well to fill the host position.

A few challenges resource allocation helps you overcome

How to allocate resources effectively

Allocating resources properly is tough, especially for large projects. Here are some tips on how to do so.

#1. Determine project scope and resources

Project scope influences what resources you need and how much of each. Knowing the scope helps you assign tasks to the right people when that time comes. So, before you give your team their to-dos, know the project’s goal, budget, and timeline.

Additionally, you’ll want to make a list of every available resource. Most organizations have multiple projects running at once , which leaves limited resources in some areas. See if you can move task priorities around to get the resources you need within your budget.

Cheeky little note here — You can track budgets with monday.com super easily:

monday.com budget template

( Image Source )

#2. Evaluate your human resources objectively when assigning tasks

It can be tempting for managers to assign certain tasks based on their rapport or relationships with team members.

Not a good idea.

For example, say your project involves creating a complex website. Your best bet is to assign only your best web developers to the project, even if you’re friends with some of the more novice developers. Using monday.com, for instance, you can quickly assign team members to tasks.

Then, you can see how good they really are as you monitor project progress — this is great for future resource allocation decisions.

monday.com task assignment

#3. Use project management software with resource allocation features

Software makes everything easier, especially when it comes to tools for project management . In fact, the Project Management Institute found that 66% of companies that use software stay within budget on projects.

But you want to make sure your software has the resource allocation functionality to aid in maximizing returns on your resources. We’d recommend this monday.com resource allocation template .

monday.com resource allocation template

#4. Create a backup plan

Projects change. A lot. The budget, scope, and timeline are all candidates for changes throughout the life of a project. Always have a Plan B if you want to be prepared for these changes.

Returning to our website example: your client may suddenly want new features or functionality. You’ll likely need to allocate more developers to the project, especially if you need a particular skill to implement these new features.

#5. Don’t over-allocate your resources

Over-allocation is simply giving too much work to one resource. If you over-allocate, you’ll end up with a less productive resource. Once again, human resources offer the clearest look at resource over-allocation. If you split one person between too many projects, you can overwork them. That means more stress, lower quality work, and the chance that they quit.

To avoid over-allocation, you’ll either have to assign more resources to a task/project, substitute resources, or deprioritize certain tasks for the time being.

monday.com task prioritization

#6. Review your resource allocation process regularly

Continuous improvement is the name of the game in your resource allocation process. Analyze each project after its completion to see how effectively you allocated and utilized resources, and whether or not you met deadlines and budget constraints.

Prioritize resource allocation for better performance

Creating an effective resource allocation plan is the key to ensuring a smooth project process with on-time and on-budget delivery. It helps get you the best possible return on each of your resources by decreasing delays in work, adapting to scope changes, and more.

Follow the tips mentioned above to create a resource allocation plan that carries your projects to success. Make sure that you use a project management software platform with resource allocation functions — like the one included with monday.com’s digital workspace. It makes the process much easier.

To get started, we recommend our pre-built budget tracker template to help you track your next project’s finances.

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With monday.com work os.

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Resource Allocation

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How does a society decide what to produce and how much to produce? Why is it important to know what to do with available resources? Well, the fact of the matter is that resources are limited. No society has a bottomless well of resources available to them, therefore, there must be a system created to know what and how much to produce and how to distribute it all. To learn how to allocate resources, types of resource allocation, and more, read on!

Resource Allocation Definition

Resource allocation is the distribution of finite resources to specified purposes selected from among several feasible possibilities. However, no society has endless resources; resources are limited. Because they're limited, it is vital to choose which commodities and services to create in order to assure efficiency.

Resource allocation is the distribution of finite resources to specified purposes selected from among several feasible possibilities.

How does one choose which commodities and services should be created? Well, it depends on the type of system that society has. The economic system used by society, like a market, command, or mixed economy , has a substantial impact on resource allocation. Each system has its own set of legal frameworks for allocating limited resources and output.

Decisions on how to distribute resources in a market economy are often made by millions of families and thousands of enterprises — the exact figure will, obviously, vary according to the size of the economy. The critical part is that they engage in the market for products and services as consumers and sellers. A product that is low in supply but in high demand will carry a high price. Meanwhile, one with low demand yet a high supply will have a considerably cheaper price. That which is in the best interest of people and enterprises, as well as prices, serve as the basis of the choices that are to be made with resource allocation.

Market economy is a type of economic structure in which two forces, supply and demand , govern the creation of products and services.

In a market economy, the government has quite a limited role to play.

With the command economy, the government plays a prominent role in all choices made, and, different from the market economy, the focus is on centralization. As a result, central planning tends to define economic goals that contrast with those of market economies. They have a primary goal of obtaining the highest economic rate of growth feasible in order to keep pace with the advances achieved by far more sophisticated market economies.

Command economy is an economic structure in which a central governing body determines the permissible levels of output.

The mixed economy is unquestionably the most distinctive kind of economic organization in the global economy. As the name implies, it involves both the private and public parts of the economy in the distribution of resources. As a result, most major economic choices entail some type of preparation (by private and public firms) and cooperation between government, corporations, and laborers.

Mixed economy is an economic structure that consists of elements of a market economy and those of a command economy.

Check our articles on the different types of economic systems to learn more:

- Command Economy

- Mixed Economy

- Market Economy

How to Allocate Resources

Addressing three essential questions about resource allocation lets us know how to allocate the resources:

What products and services to produce?

Out of the three, the first topic for society to address is, "What products and services should we create with our finite resources?" Should there be more t-shirts made or more button-ups? Notebooks or planners? Ammunition or laptops? The answer to this is important because resources are limited, whereas needs and desires are not. While it's understandable that a lot of products and services are desired, unfortunately, society cannot produce everything that everyone wants — there are limits. There must be a decision made as to what is best to produce.

How to produce the products and services?

The second topic to be addressed is how society's finite resources are utilized to generate products and services. For example: Should water be sold in plastic bottles or glass bottles? Are books to be made with new paper or recycled? Should there be more self-checkouts made for the stores or more human employees kept instead? The decision must be made as to how to allocate limited resources to which commodities. After all, not all products can be produced with the same resources.

Who gets the goods and services?

The third of three allocation issues is, "Who obtains the commodities and services created by society's resources?" Should all of the commodities be supplied to the best workers? Should products be allocated based on age? Income? What about the unemployed then? The production of products is constrained due to limited resources, and due to that, not everyone can get everything they want. There has to be a way to figure out who gets which products and by which criteria they get them.

Resource allocation is like combining several pieces of a puzzle. The intent is to make all of the pieces fit to show the big picture, and to show that all pieces are needed to make a whole. This is exactly what resource allocation does. It combines several factors at once in order to make everything work. All things need to be taken into consideration when it comes to resource allocation, in order to figure out where the resources are most needed.

Resource Allocation Strategies

Resource allocation techniques are the procedures used to allocate products and services. There are nine fundamental ways, and they are occasionally combined. They are:

Command : a central authority provides the product or service.

Random : the service or product is distributed at random, with everybody getting an equal chance of receiving it.

Arbitrary characteristic : a service or product is granted to an individual due to the fact that they fulfill particular criteria, such as age, location, ethnicity, sex, and so on. Because they can alter, the qualities are seen as arbitrary.

Competition : the item or service is given to the winner of a tournament, game, or event.

Force : someone takes the product or a service using legal or illegal means, such as stealing.

Price : the item or service is awarded to the individual capable and willing to pay more than anyone else for it.

First-come, first-served : the very first individual to claim a commodity or service, gets the resource. An example of this would be if there are only two copies of a popular book available for purchase. This would be first-come, first-served!

Majority rule : the individual who receives a majority (or occasionally a plurality) of votes, as in an election, receives the commodity or service.

Resource Allocation Examples

Let's run through an example of resource allocation in order to get a clear picture of what it entails.

Imagine you were to decide to remodel a room in your house. The questions to ask regarding resource allocation would be the following:

Who are you going to hire?

What type of materials are needed?

What's your budget for the remodel?

How much of your budget is going to go towards paying the workers and how much of it has to go towards materials?

By when do you want the remodel to be done?

After you've completed answering all of those questions, there are still parts that need to be given attention. Let's say you wound up having three workers doing the remodel, two ladders, two tool-kits, 2 buckets of paint, and a deadline of a month. These are the resources. But who is going to remodel which part? Which two of the three workers get to use the tool kits? How are they to divide their time equally to get the remodel done in time? What is the optimum daily workload? These are all questions that need to be answered.

One of the most critical components of resource allocation is assigning the appropriate people to a certain job. If you assign a basic, entry-level assignment to a skilled employee or a hard job to a new employee or trainee, you will not receive a great outcome. The cost would be unreasonably expensive in the first instance, and the latter would be stressful with disappointing outcomes.

Types of Resource Allocation

Continuous - It requires a steady intake of the resources necessary. To operate the organization, financial resources, for example, are required on a regular basis.

One-time - It indicates that resources are only assigned and used one time in a process. For example, technology and equipment is something that is only needed once for a company to run its business; more of it is not needed every day. Thus, it is a one-time allocation.

Importance of Good Resource Allocation

One of the main reasons that good resource allocation is important is due to scarcity. Scarcity pertains to a fundamental economic issue: the imbalance between finite resources and buyers' potentially boundless necessities and wants. Time and money are two major examples of limited resources. The majority of people have insufficient amounts of one, the other, or both.

In a perfect world, there would be an abundance of all resources, like water, knowledge, property, and food. There would be no need to figure out how resources are to be allocated. In real life, things are different. Everything has a price. To put it differently, all commodities and production factors are finite to a certain extent. Therefore, good decisions must be made about what products to make and how to make them, which is what resource allocation is all about.

Resource Allocation - Key Takeaways

Frequently Asked Questions about Resource Allocation

--> what is resource allocation, --> what's an example of resource allocation.

An example would be figuring out all of the details of remodeling a room in the house.

--> What are the types of resource allocation?

Continuous and one-time.

--> What are the strategies for good resource allocation?

Command, random, arbitrary characteristic, competition, force price, first come first-served, majority rule.

--> What is the importance of resource allocation?

One of the main reasons that good resource allocation is important is due to scarcity

Final Resource Allocation Quiz

What is resource allocation?

Show answer

Show question

Define market economy

Market economy is a type of economic structure in which two forces, supply and demand, govern the creation of products and services.

Define command economy

Define mixed economy

There are three questions that are asked to determine how to allocate resources:

What products and services should be produced? How will such products and services be produced? Who will get to have these goods and services?

How many strategies are there to resource allocation?

What's an example of resource allocation?

What are the types of resource allocation?

What are the strategies for good resource allocation?

What is the importance of resource allocation?

What's scarcity?

Scarcity   is when there is a high demand, but not enough supply to meet the demand.

Resource allocation techniques are the procedures used to allocate ______ and _______.

products, services

One of the most critical components of resource allocation is...?

Assigning the appropriate people to a certain job

What's an example of the first-come, first-served strategy for resource allocation?

An example of this would be if there are only two copies of a popular book available for purchase.

Why is it necessary to allocate resources?

To ensure market efficiency.

Examples of finite resources are...

In a print shop, the paper that books are printed on requires a  ________ allocation of recourses.

What can be remedied with proper resource allocation?

What is NOT a question you would ask yourself if you were building a house and had to allocate your resources accordingly?

How do I budget my money?

Which are examples of one-time resource allocations?

Buying a car.

Your firm has to produce 15,000 cars annually so that the government will renew your business permits. What type of economy do you most likely live in?

A command economy.

Decisions on how to distribute resources in a ____________ are often made by millions of families and thousands of enterprises.

market economy

Why is "What to produce?" an important question for proper resource allocation?

It will tell us what is most important to produce with our limited resources. 

What do economists mean when they ask "How will products and services be produced?"

They mean which method is the most efficient for production.

"Should we use 3D printers or plaster molds to shape our figurines?" is an example of which question about resource allocation?

How to produce the products and services.

when a service or product is granted to an individual due to the fact that they fulfill particular criteria, such as age, location, or ethnicity, it is an example of which resource allocation strategy?

Arbitrary characteristic.

How does first come, first serve work as a resource allocation strategy?

It means that whoever claims a commodity or a service first, gets it.

If resources are awarded to a winner of a tournament, event, or game it is...

Resource allocation in the form of a competition.

If everyone has an equal chance of receiving a resource the allocation strategy is...

Random allocation.

What is the majority rule?

An individual who receives a majority of votes, as in an election, receives the commodity or service.

Resource allocation is about fairness and not efficiency.

False, resource allocation is about maximizing efficiency even if it is not always perfectly fair.

"Should the best resources go to the highest producers in the society?" answers which of the 3 questions about resource allocation?

"Who gets the goods and services produced?"

A mixed economy is a combination of arbitrary characteristics and random resource allocation.

False, it  is an economic structure that consists of elements of a market economy and those of a command economy.

A mixed economy is the most common structure.

True. M ost major economic choices entail some type of preparation and cooperation between government, corporations, and laborers.

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