Why Are Organizations Afraid of Resource Management?

Don't be afraid of resource management.

If I had a dollar for every time I’ve sat in a meeting with a potential customer and heard the phrase, “Yes, we have been planning to look at resource management, but we’re too busy to do it,” I’d be quite a bit richer.

It’s such a “high priority” that while we talk about it delivering significant value, we don’t actually devote any time or resources to doing it. Now, why is that…? Let’s explore this a little and make some assumptions.

We Think That Resource Managers Have Monster-Sized Brains

We can possibly hold all the demand and capacity information for up to twenty people in our heads or, of course, on spreadsheets. It’s cheap, it’s feasible, and we’ve done it for a while. Beyond twenty people, however, I would really challenge almost anyone to consistently and reliably hold the information in their heads. Then we have people’s skills – can Xavier speak French? Did Yolanda complete that Java course? When will Zebedee be qualified to work on high voltage cables? We like to think we can juggle all this information because we want to appear competent and efficient – but our brains have a limit.

So, let’s go with twenty as a minimum threshold for resource management.

We Ignore the Point That Our People Cost Money

The average salary in the US is about $49,000, so let’s assume that our project staff all earn an average salary (which I think you’d agree that is conservative; realistically, PM’s, BA’s, PMO staff etc. typically earn more than this).  So then, let’s assume that the actual cost to a business is greater than this, say $60,000 per person.

The arithmetic is pretty easy – 20 x $60K is $1,200,000 annually. So as a manager accountable for getting the most from your resources, what else do you manage that’s valued at $1.2M? To most of us, that’s a lot of money.

Now, let’s break it down to the cost of your team per work day. Your team of twenty costs you $4,800 a day. A team of a hundred costs $24,000 a day, or $6M per year, which is a lot of money (even for most athletes!). A 1% savings from efficiency improvements would save you one employee’s salary, i.e. $60,000, which is much more than the cost of Meisterplan, which easily enables that efficiency increase.

We Forget That Recruitment Costs and Time Are Draining

People move on – take a look around your team. How many have been there less than 12 months? How many do you expect to move on in the next 12? Will you need to recruit or retrain? Based on your current forecast demand, do you have the right set of people with the right skills? Do you believe your forecasts…?

Most of us are nice – yes, even you

Unfortunately, I think this is exactly the reason that most companies don’t want to engage properly in resource management. Not because they don’t think it will work, but because they approach it with the mindset of ‘how many people will we lose?’, rather than ‘how can we help our current employees be more productive?’. Generally, we don’t want to make our friends/colleagues work harder, or worse, cause them to be laid off, and we fear that this will be the result of resource management.

It doesn’t need to be that productivity improvements equals less people. It should mean that you have a stable, competent, well-balanced team with a sensible workload to match.

I challenge you to honestly ask yourself why you’re not doing resource management, and then give us a call.

By | 2018-02-09T14:45:37+00:00 February 9th, 2018|Categories: Resource Management|

About the Author: John Morrissey

John, one of the consultants at our partner Sandhill Consultants in the UK, has worked in both multinational organisations and SMEs, in public and private sector, as an employee and a contractor, in roles covering manufacturing, sales, new product development, operational and strategic marketing, finance, IT and business transformation. This has involved a lot (really, a lot) of projects, programmes and portfolios. He is a big believer in KEEPING THINGS SIMPLE and avoiding drowning in too much detail!