Project resources are finite, so project managers need a reliable way to negotiate resource constraints without derailing their project planning. But how should it be done? What are the constraints to watch out for—and how can you solve them?
Hey 👋 I’m Sara Hogan, a Program Manager and Strategy Consultant. In this article, I define resource constraints, explain how they impact resource management, and share tried and tested tips for how to handle them.
What are resource constraints?
Resource constraints refer to limitations or restrictions on the availability of resources essential for achieving a particular objective or completing a task. In project management, potential resource constraints play a crucial role in influencing decision-making processes, managing risk, and determining the feasibility of successful projects.
The main types of resource constraints
Resource constraints are an inevitable part of managing projects. Since projects are temporary endeavors with fixed start and end points, resources are limited by the following factors:
Note: this list only discusses three main resource constraints. It is not exhaustive, as there are also constraints related to people, materials, and equipment.
Time
Time is crucial as most projects have at least a high-level due date based on stakeholder expectations or external policy.
Time (or the lack of it) dictates everything from how the project is planned to the intensity of the work to how many people should work on it.
Imagine your agency has two weeks to run a marketing campaign for a client’s Black Friday event. With such a short timeline, you must balance the time constraint with the team’s size and project requirements to ensure the campaign is live on time. But you must also do that without compromising quality or team well-being 😱
You might decide to prioritize certain features or increase the number of people on the team to meet the timeline.
Scope
When it comes to scope, even though your stakeholders may wish for it, you won’t be able to include everything in the project (which is a good thing because you don’t want scope creep to set in).
This constraint means decisions must be made on the most important features or tasks, as you can’t do it all.
For instance, if you’re leading a team developing new software, you might have to choose which features are necessary for launch and which can wait. This could mean focusing on the core functions that meet most user needs and leaving out the nice-to-have extras until after the initial release.
Cost
Most projects have a fixed budget that limits how many hours team members can spend on project execution.
Since the money is finite, you need to plan carefully so your team completes the project without exceeding the budget. If you overspend in one area, you may have to cut back in others, potentially compromising the project’s success.
Let’s assume your videography agency is to produce a commercial for a car company on a tight budget. You might decide to allocate a larger portion of the budget to high-quality video shoots of the car to emphasize its design and features and then opt for more cost-effective solutions for post-production effects.
The limitation of this iron triangle—the interdependent constraints of scope, time, and cost, where changes to one constraint affect the others—is that you can only achieve a maximum of two of the three elements. For example, you’ll have to cut scope if you want to reduce costs and shorten your schedule. If you can’t make any changes to scope or cost, then it will take longer to execute the project.
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5 tips to handle resource constraints and ensure effective resource allocation
If resource constraints are inevitable, how do you allocate resources properly without risking your portfolio and project health? Here are some tips on how to handle resource constraints:
1. Implement a robust project selection and prioritization process
Finite resources preclude organizations from taking on every project they’d like. Establish an objective decision-making framework for project prioritization and to ensure that you’re assigning resources to your most important projects.
Examples of that decision-making framework might include alignment with organizational goals, any external dependencies or deadlines, cost-benefit analysis, team capacity, and estimated complexity.
If you’ve been planning projects in Float, your historical data can help you do a quick cost-benefit analysis.
The People Report in Float shows you past data on billable and non-billable hours that could help you estimate the cost of resources for a new project.
You can also determine if you should take on a project by looking at the work your team is currently doing and their future capacity in Float.
The visual Schedule lets you quickly see all ongoing and planned projects, who’s working on them, and their timelines. The clear view of capacity makes it easier to say yes or no to incoming projects.
2. Allocate resources to critical project components
To ensure effective project execution, optimize your resource plan around those components that are critical for project success.
Identify the critical path—i.e., the sequence of tasks that represents the longest path to project completion—and make sure those tasks get staffed correctly. If your critical path slips, then the project timeline does too.
You can use resource planning software like Float to help you spot projects that might be missing key team members.
The Project Plan view shows a list of projects, providing a quick overview of the number of people assigned to each project. For instance, if a project is planned with four people, this view helps you quickly identify any discrepancies, such as noticing that the team lacks a designer. From then, you can investigate further to determine if this was intentional or an oversight.
From a budget standpoint, make sure you allocate funds to the project elements that are essential for delivery (e.g., a piece of heavy equipment may be essential for completing a construction project.)
3. Build in contingencies
When you’re making your resource plan, don’t sell yourself short. Make sure to build in sufficient slack for your team's schedule and cushion for your budget to account for unforeseen emergencies. A 10% contingency is usually a safe bet, regardless of your project or organization.
Also, be sure to develop backup plans for how you’ll address project risks. For example, what if a key team member becomes unavailable during the project? What if a key supplier falls through? I typically assume something won’t get done on time and then develop a plan B and C to address that risk.
Fortunately, tools like Float offer scenario planning capabilities so you can map out different contingency plans and understand their impacts on project time frames and budgets. For example, you can scenario plan with tentative tasks and placeholder roles or use scenario forecasts for capacity and budget.
4. Manage stakeholder expectations
Be transparent with stakeholders about the decisions you are making with regard to resourcing and get their buy-in upfront. To be clear, clients don’t necessarily get to choose the specific team members who will work on their projects, but they should agree on the relative prioritization of projects and tasks.
You’ll also need to ensure that stakeholders align on project scope definition to avoid potential misunderstandings later in the project life-cycle. To manage expectations, you’ll want to err on the side of caution by underpromising what you can deliver. Trust me—it’s better than the alternative.
5. Monitor and control resource allocation throughout the project life-cycle
Use resource planning software to help you keep on top of resource allocation as the project progresses.
Specifically, you’d want to track key metrics related to resource constraints, including team utilization, resource availability, and time spent.
Resource utilization rates tell you what percentage of time people allocate to your project versus others.
Note that team members shouldn’t be spending 100% of their time on project work. They’re only human and need time in their schedule for things like sick leave, paid time off, or career development.
The Data range insights in Float shows your team’s utilization rates so you can see if they are overloaded or if their schedule is realistic.
Your organization should set a sustainable utilization rate–one that avoids underutilization and lack of engagement yet also averts overutilization and burnout.
You can use Float to keep tabs on resource availability across your project team. You can search for a specific role or department using the Filter function and see their capacity displayed on the Schedule.
You can also view time tracking data in Float to see how much time people are spending on your project versus others and also forecast any shifts in planned work across the portfolio. You’ll gain insight into how time spent impacts project costs, which helps you to make better decisions on resource allocation.
