Resource Capacity Planning for Services Businesses

Written By Kymberlii Cassidy and Matt Van Vleet

What is Resource Capacity Planning?

For services businesses where your inventory is your people’s time, Resource Capacity Planning is about how you make plans for and strategize around your people. That’s why we typically call it people planning instead of resource planning. Resource planning usually gets us asking questions like:

• Who do we have available?

• Who will we have available soon?

• What projects do we need people for now and in the near future?

• What skill sets do our available people have?

• Do we need to hire more people to fill future or present needs?

Resource Capacity Planning needs to take place on two levels, the macro and the micro. On the macro level, you need to think of things like next year’s growth and how that plays against how many people you have now. That way you can do some preemptive resource planning for it. Or maybe you’re going to go into new technologies next year, so you need to make a plan to hire people with skills that match those plans.

You may need more roles for the people but also more people for the roles. You need to ensure you have the right amount of projects for the people you have and also know who you’ll need for upcoming projects that you don’t yet have on staff so you can start hiring ahead.

The bigger picture goals and plans for where your people will be and need to be should match what’s happening and what will be happening for the organization.

At the same time, your greatest resource is your people and their time—and your people have real skill sets, hopes, passions, and plans for where they want to go in their careers. So your plans for how you’ll serve your clients need to also take into account how you will help your people go where they want to go in their careers while also fulfilling the direction the company and projects need to go. It’s all about balance.

Resource Capacity Planning in Project Management

There’s a lot on a project manager or delivery lead’s plate when trying to deliver a project. Good planning reduces the stress of a project. You need to set up projects to succeed, and that will enable your project managers to succeed.

The best case is to hand a project manager a plan for a team that has the right set of varied strengths to deliver on the project. It’s not just going to be about capacity, or if we have just anyone available. It’s about making sure we have the right people for that project, taking into account skill sets, experience levels, and temperaments, along with the timing of their availability and the project timeline.

Create teams that are set up for success. You want balanced teams, with a mix of junior and senior and mid-level people. If you don’t mix your junior with your senior people, the junior people don’t get a chance to learn, and the senior people don’t get a chance to lead and teach. And from a cost perspective, putting too many senior people on a team gets expensive very fast.

Without the right team on a project, you can’t deliver effectively. And when you don’t deliver on a project on time and with quality, the client’s view of your business can be damaged and lead to lost business and a poor reputation. Ultimately, what you need to do for a project manager is simply respond to what they need with the right set of people for the project.

Business Benefits of Resource Capacity Planning

The way you do your Resource Capacity Planning will have a dramatic effect on your company’s bottom line. To maximize how you do your resource scheduling and resource planning across the board, you need to look at your sales pipeline, forecasting, and projections alongside your hiring and retention. Again, you have to balance what the business needs to succeed and get clients what they need, alongside keeping your people fulfilled and engaged.

Turnover costs money, period. So you want to retain your people for as long as possible, and you do this by ensuring they’re fulfilled, so they stay on board. Anytime you lose a person, you lose the time it takes to hire, onboard, and train the new person.

Resource Capacity Planning Best Practices & Tooling

There are a few key factors to keep in mind when tooling up to create your ideal resource capacity plans. Here are a few best practices for how to make that happen:

• Focus on getting good at matching people to projects and managing your capacity. See what’s in your pipeline for the next upcoming 3, 6, and 9 mos. Match that with the people and skill sets you’ll need, keeping in mind retention rates. For example, you may need five people on a project coming up in 3 months, but you have to keep in mind that those same people might not all be with you, depending on your retention rates and other projects they may be on.
  

• Layer people on projects so that they will be happy and not feel stuck in a rut or on a trajectory they aren’t happy with. Consultants tend to want to do 3 things: learn, teach, and create/do.
  

• Communication is also a big part of keeping things flowing and your people happy. For example, you hire someone and have big plans for them on an upcoming project that’s a few months out. For now, they’re on the bench. They may leave thinking they are stuck on the bench for too long, while you had a big plan for a great project for them. But you didn’t communicate that to them, so you lose out on someone great you hired.
  

• Always discuss what your people are doing now in their role and see what they’d like to do in the next project or what is possibly coming up, so they feel fulfilled and know you’re invested in their fulfillment.

Resource Planning Tooling

When you’re selecting the right tools to help you do your resource planning effectively and efficiently, a handful of factors are key to helping you be successful:

Utilization. You need to see all of the people you have in the company and where they are allocated so you can maximize the value you’re able to deliver to your clients and proactively manage your bench and upcoming and currently open positions.

Sales Pipeline. See all projects and forecasting for all those we know exist and those in sales pipeline.

Forecasting, Staffing, Estimating. Match your current people on the bench with future open positions forecasted. You may want to move someone who is on a project onto another project. You need to know more than who is available, you also need to know where everyone is.

Financials. You need a way to know the implications of any staffing changes and how they impact your finances. Use a tool with forward-looking financial modeling so you can view your financials based on how you run your business.

Ultimately, you need a way to see the full impact of all your decisions all in one place. If everything is always ad-hoc, it’s going to be nearly impossible to get good at making the best possible decisions. When there are a lot of projects and a lot of people, the impacts aren’t obvious.

You need a system that can keep up with the information you have and the decisions you’re making. Especially if your business is separated into different books of business or regions. If you have multiple regions, you need to be able to slice the information and see what you’re doing with your piece, but also see the local markets and the overall impact on the organization.

Resource Capacity Planning Is About Balance

Resource capacity planning is a key aspect of any services business. Doing it optimally means balancing three things, your people, your clients, and your company.

Your people. If you don’t plan well for your resource capacity, you may have excessive turnover because they aren’t getting the experience they are seeking or the work they want to do, or they are on the bench too much.

Your clients. If you don’t plan well, you may not put the best team on the client to get the work done well for the clients so they are happy and keep coming back.

Your company. You won’t make the money you need to invest in new things and grow if your customers aren’t happy.

Having all the information in front of you is key. Without visibility into all of your people and business, including what’s happening now, and what’s on the horizon, you’ll constantly struggle to make ad-hoc decisions that aren’t as informed as they could be. When you can see everything in front of you in one place, Resource Capacity Planning becomes exponentially more valuable to your business by helping you keep your customers and people happy.