Resources are the backbone of any project. Even as we write this article, plenty of resources are engaged in planning, creation, and publication. And when we say resources, we aren’t just talking about the materials and tools but human resources too.
Not considering resources when planning a project is simply out of the question, much less executing it. How can one ever complete a project without the availability and engagement of proper resources?
Before setting the wheels of any project in motion, project managers go through the arduous ordeal of planning every inch of the project, from the significant items down to the minutest things. One of the main things addressed in the planning phase is resource forecasting.
Resource forecasting enables project managers to make smart decisions about the utilization of resources throughout a project. Better decisions in this aspect produce time-efficient and cost-effective results. This article will turn to everything about return forecasting, from the basics to the specifics.
What Is Resource Forecasting in Project Management?
Resource forecasting is all about making informed decisions regarding the utilization of resources in projects. Forecasting, in essence, predicts a project’s requirements and needs. By planning and forecasting resources, companies try to steer clear of any roadblocks that might hinder the progress of a project.
Resource forecast in project management allows project managers to ensure a smooth supply and demand of resources. With proper forecasting, project managers can reduce the cost of a project and even bank extra time by efficiently utilizing the available resources.
When forecasting resources, project managers identify the tools and skills required to complete a project successfully. How these resources will be employed efficiently in a project is also considered.
Forecasting helps ensure the availability of skills, finances, tools, etc. Better forecasting translates into a smoother workflow and better results. A slip in the process can result in delays or cost overruns. Resource planning and forecasting are significant aspects of any project.
What Is the Importance of Forecasting Resources in Project Management?
Forecasting resources is essential for several reasons. Not only does it help save time and cost but plays a crucial role in the smooth progression of a project. Here are a few points where planning and forecasting prove to be of considerable value:
- It helps identify potential issues and gaps in the availability of resources
- Planning finances, including labor costs, materials to be used, etc.
- Predict a near-accurate timeline of the project (how, when, and which resources will be employed)
- Ensure you have adequate resources to bring your project to completion
- Estimate workload and how it will be managed during a project’s lifetime
- Makes sure human resources employed are happy and satisfied with the workload and use their skills optimally
Robust forecasting help in the successful execution of projects, producing better results and higher levels of satisfaction overall.
Now that we have established the importance of forecasting let’s look at how forecasting is actually done in project management.
How To Forecast Resources in Project Management?
Forecasting might sound complex and difficult but is relatively simple to do. The following are the key points to be kept in mind when planning resources for a project:
Analyze Resource Utilization in Past Projects (Benefits and Losses):
Before you engage any resources or start planning, go through resource utilization trends. Analyze how resources were utilized, whether the project was successful or not, which resources were good at what, etc. A deep and thorough understanding of how resources were utilized previously will help you plan better for your projects.
With proper understanding, you can identify the best resources for the project, find members that will become a permanent part of the project, pinpoint resources that have to be outsourced or can join on an ad-hoc basis, etc.
Also, a retrospective outlook will allow you to identify potential gaps or issues you might encounter. You can then carve out a plan to resolve these issues if and when they arise.
How Is Resource Utilization Measured?
There are various ways to identify resource utilization but the simplest of all is The actual number of hours the resources worked divided by the number of hours they could have worked for.
1. Understand The Strengths and Weaknesses of Your Team:
Having all the resources in your team is not the only thing to be certain of but also ensuring that you are utilizing the strengths of your team members efficiently is essential. Before assigning a resource to any task, you must analyze if their skill set matches the needs of the task or if their performance is up to par.
Evaluate their weaknesses and strengths, their performance in the projects previously assigned, how you can optimize their performance, and if they need your guidance or training.
Knowing your team’s skills can help you optimally engage their strengths, producing better results. You can also identify if your team lacks specific skills or expertise and hire or outsource a resource to fill the gap. You can also train existing resources or guide them to equip them with the skills needed to complete the project successfully.
2. Identify The Requirements of The Project:
Project managers are individuals with a thorough understanding of projects. This includes knowing the project’s requirements and how it can be completed within the allotted time and budget.
The timely delivery of products and services is highly dependent on the skillset of human resources. If teams have all the skills required for the execution of the project, then there will be nothing hindering the project’s progress.
If the team’s skillset does not match the project’s requirements, then project managers must start planning to fill in the gaps. Only if the project managers understand the requirements of a project can they forecast the right resources to be used in the process.
3. Communicate with Stakeholders:
Project managers must regularly communicate with stakeholders when carving the workflow plan to ensure all requirements are met. Maintaining smooth communication throughout the process helps ensure that you are on the right track and those goals are met effectively.
With stakeholders’ involvement, you can accurately forecast resources and optimize the use of resources. Uninterrupted communication will also come in handy in reducing costs and timely delivery the goods and services.
Establishing good communication with stakeholders also builds their confidence and trust in the team. Good communication goes a long way and can effectively add to the productivity and efficiency of the team.
4. Consider Attrition Trends and How to Minimize Them:
Losing a resource midway can be detrimental to the progress of a project. When forecasting resources, you must pay special attention to attrition rates to ensure it does not throw your project off track. Understanding hiring trends in the past and attrition can help you prepare for the worst.
- Skills: Determine if people with specific skill sets are leaving because they lack growth opportunities. For example, if graphic designers leave your company, they are offered better opportunities elsewhere. Here’s how you can identify attrition trends in your organization:
- Project Progress: Identify if members leave a project mid-way or at the end. If so, it can indicate their dissatisfaction with the process, work overload, dissatisfaction with the task assigned, or communication gap.
- Type of project: Check if a specific project has higher attrition than others. Try to take on projects liked and preferred by your team members. This will lead to higher productivity and better performance overall.
Next, we will highlight some of forecasting resources’ most common benefits.
4 Main Benefits Of Human Resource Forecasting
At the very beginning of this article, we pinpointed the importance of forecasting. In this section, we will highlight how exactly forecasting can help your business.
1. Reduce Project Costs:
Most of a company’s budget is invested in its resources. With the right project resource forecasting, you can ensure you have the right resources to accomplish a project’s goals. This, in turn, can significantly reduce the cost spent on hiring new resources, outsourcing skilled workers, or hiring new talent.
Good forecasting can help you keep project costs in check by ensuring the availability of resources.
2. Improve Employee Satisfaction:
By efficiently utilizing the strengths and skills of resources, project managers can improve their satisfaction with the workload and the organization. Planning how and when resources will be utilized can also help make sure that the workload is distributed evenly, and employees’ abilities are utilized optimally.
Higher employee satisfaction ultimately leads to higher productivity, better work, and increased profits.
3. Prevent Bottlenecks:
One of the best things about forecasting is that it prepares you for the inevitable. With robust planning, you can always stay prepared to encounter and fight any bottlenecks hindering your progress. any delays or issues can be tackled on the spot, and the project can progress without any hitch.
All the planning can help avoid last-minute hiring, project delays, and sudden changes in the project.
4. Avoid Resource Unavailability or Shortages:
For one reason or another, you might encounter a shortage or unavailability of some resources one day. As a project manager, it is your responsibility to power through these issues and ensures projects are not delayed or put on hold because of resource shortages.
The same goes for resource excesses too. If, for example, you have more than the required resources, then your finances are going to waste. Since resource optimization and cost-efficiency are a need of every project, you have to make sure your resources are always in control, and that you have access to the best resources at all times.
In case your team lacks some skills required for the project, you can also train and guide existing resources in that particular skill set. This will enrich your team and equip them with skills that might come in handy in the future.
Here’s The Takeaway
Forecasting helps you prepare for the future. With resource forecasting, project managers can equip themselves to fight any possible problem they might encounter. They can prepare themselves to resolve potential issues, ensuring project progress is not obstructed.
So, if you are still unsure of forecasting resources, we will encourage you to go for it. Once you realize how effective and efficient it is, there will be no going back for you.
Best of luck!