Achieving strategic objectives, scaling up, and maintaining a competitive edge are the ultimate goals for every organization. To attain the same, businesses hire the best-fit resources across geographical boundaries.
But, simply hiring and assembling the team will not guarantee business sustainability and profitability. Instead, the workforce and their expertise must be effectively utilized to the highest potential on billable or strategic work. This will help maximize resource efficiency, generate the desired ROI, and meet business goals.
However, achieving optimal resource utilization rates is challenging for most businesses. Underutilization leads to lower employee morale and productivity. On the other hand, overutilization gives rise to employee burnout, poor work quality, and unplanned attrition. Both events can have a negative influence on your organization’s health index.
Therefore, it is essential to implement strategies to improve and maximize resource utilization in the workplace. This article talks about a few strategies that can help maximize resource utilization for the organization’s overall success.
Before we move ahead, let’s first understand its significance.
What is resource utilization and its importance?
Resource utilization is a KPI (Key Performance Indicator) that measures how effectively resources are used against their availability or capacity. Using this metric, managers can evaluate and monitor employees’ work and analyze if any resource is under/overworked.
Resource utilization helps gain an in-depth clarity of the ongoing work progress. Furthermore, it enables managers to view the actual time spent by the workforce against the planned ones and implement corrective measures if there is any deviation.
Based on the utilization reports data, managers can also predict when resources will hit the bench. Accordingly, they can proactively allocate resources to high-priority or billable project work to optimize the resource health index.
Thus, resource utilization enables managers to use their resources to their maximum potential and enhance profit margins, engagement and productivity. Furthermore, since the right resource is utilized for the right job, it also avoids project delays, thus improving work quality.
Given the benefits of resource utilization, let us examine how resource management software can help optimize it.
7 ways resource management software can improve resource utilization at the workplace
Optimal resource utilization is essential for enhanced organizational productivity. Below are some tips to improve resource utilization using resource management software.
1. Take stock of resource capacity and demand
The project manager estimates the resource requirement and then initiates the requisition process describing the skillset, competencies, and number of resources needed for the project. Accordingly, the resource manager will look into the resource pool to identify appropriate resources.
In case of a shortage of resources, they can hire a permanent/contingent workforce with the right skillset. Whereas for excess of resources, they can bring future work ahead or redeploy resource capacity in other projects allowing maximized billable utilization of resources. This way, they can ensure no capacity is wasted, and every resource is utilized optimally.
2. Ensure competent resource allocation
To ensure productivity, it is vital to allocate the right resource to the right job. For example, when an employee’s skills are not competent enough to execute a project, it results in project delay and compromised quality of work. Similarly, allocating skilled employees to non-billable tasks affects their engagement and morale. Therefore, competent allocation is necessary for maximizing productivity and enhancing employee satisfaction.
A resource management solution offers 360-degree visibility using which managers can assess the profile of resources on a unified platform. The tool also shows present and future bookings of resources that give insights into their availability. Based on this information, managers can optimize their allocation without overloading them.
3. Track utilization in real-time
It is essential to diligently track each resource’s utilization and progress for timely project delivery. However, it can be challenging in an organization where resources are distributed globally.
Managers can use a robust resource management solution that provides real-time reports on resource utilization. They can view color-coded utilization heatmap and forecast vs. actual reports to get visibility into resources’ current and future work. These data-driven insights help analyze if any resource is over or underutilized and implement corrective measures to ensure productivity and profitability.
4. Apply resource optimization techniques
Overutilization of resources negatively impacts the organization. For example, it leads to increased employee burnout, disengagement, and client dissatisfaction. Therefore, managers need to implement optimization techniques like resource leveling and smoothing to prevent overutilization.
Resource leveling can be implemented for projects that are not time-sensitive. Here they can adjust the start and end date of the project and ease the resource schedule. On the other hand, resource smoothing can be used for time-bound projects where managers can deploy more resources or redistribute the workload to complete the project, thereby improving productivity.
5. Mobilize resources from non-billable to billable work
When employees work on non-billable work, it decreases workforce productivity and performance. These employees exhibit disengagement and lead to low morale issues as their skillset is not leveraged productively. Therefore, to combat this, it is necessary to ensure optimal workforce utilization.
The resource management tool provides foresight into resources’ work schedules. Using this information, they can predict whether resources are allocated to billable or non-billable tasks and, accordingly, mobilize them to billable/strategic work and maximize productivity.
6. Create individual development plans for every resource
One of the most effective ways to enhance employee skills and utilize them is by organizing an Individual Development Plan (IDP) and upskilling programs. Formulating a suitable IDP based on the resource’s skill set and career plans will aid in their professional development and growth.
In addition, managers can also provide shadowing, cross-departmental work, and on-the-job training opportunities to resources. It enhances their skills and makes them future-ready for critical pipeline projects, ensuring higher utilization rates for all resources.
7. Foster shared service model within matrix boundaries
Cross-functional collaboration plays a significant role in utilizing the resources to the maximum potential. It helps employees learn about various departments’ work processes and practices to diversify their skillsets. Therefore, managers can leverage a shared services model to allocate resources across diverse projects.
The resource management solution offers 360-degree visibility and advanced filters, which help managers access all resource-related information and select best-fit resources. It ensures that the talent of these resources is effectively leveraged and, therefore, helps maximize their productive utilization.
Conclusion
As discussed, resource utilization is an essential KPI for organizations since it enhances business efficiency and profitability. Therefore, managers must ensure that resources are neither under nor overutilized against their capacity. When paired with the right resource management solution, the points mentioned above will help employers manage resources effectively and boost workforce productivity.