Skills shortages, incorrect skills allocations and capacity challenges consistently have a negative impact on project outcomes and benefits for almost all organisations. Grant Bridger, PM-Partners Client Engagement Director, shares why your PMO is in the best position to improve resource management, reduce delivery challenges and improve benefits realisation.

Skills shortages are an ongoing issue for the project management community. In the Australian Institute of Project Management’s report The state of project management in Australia 2022, KPMG found that 73 per cent of surveyed project professionals experienced staff shortages on their projects and more than half suffered from delays in sourcing key roles or skills critical to projects. This echoes the NAB Quarterly Business Survey, which shows capacity utilisation at a record 86.3 per cent and more than nine in 10 firms reporting constraint on output due to a tight labour market.

However, this is not the only contributor to resource management challenges. Others include:

• Misallocation of skills: Failure to assign the right skills and experience to the task at hand.
• Poor metrics and visibility make demand forecasting and resource tracking highly challenging.
• Specialist resource constraints: Failure to address known choke points for specialist skills can impact in-flight projects and cause a domino effect.
• Inaccurate estimations drive supply and demand chokepoints downstream.
• Optimistic resource planning: Constant over-allocation of resources, for example, having resources assigned at 100 per cent when in reality availability is 60 per cent due to other priorities.
• Poor time tracking meaning resource allocations become almost impossible.
• Poor scheduling standards constrain the ability to plan or proactively treat risks before they become issues.
• Lack of a balanced workforce: Having an appropriately balanced workforce that suits your organisation is more important than ever. In addition to the permanent cohort, consider contractors or contingent labour; consultants and specialist providers; and on-demand services.

The solution is better resource management. As highlighted by Infrastructure NSW’s report Staying Ahead: State Infrastructure Strategy 2022-2042: “With comparatively small and targeted funding and resourcing of key initiatives, the NSW Government can better realise the social and economic benefits of the current pipeline, as well as increase the speed of pipeline delivery, create extra capacity, improve project performance and significantly reduce delivery risk.” In other words, even the smallest changes can have big impacts – and it’s an approach that has wider application for many other organisations delivering projects.

What is resource management?

Resource management is the ability for an organisation to balance both capability – ensuring project team members have an appropriate level of skill ­– and capacity, where the availability of skilled staff is optimised across personnel. Both are important: capability to ensure that the skills, knowledge and experience in the team corresponds with the complexity of the project, and capacity to ensure that the workforce can deliver the project without burning out.

In recent years a general labour shortage, often attributed to an increase in the number and scale of projects, has reduced opportunities to increase capability as organisations have little time to upskill existing staff while they are at capacity. It’s no surprise then that capability uplift and talent retention have become crucial to ensure a future skills pipeline that’s fit for purpose.

Good resource management is strongly tied to the strategic objectives of the organisation where the right projects are prioritised and allocated suitable resources to maximise benefits realisation across the organisation’s project portfolio. If this sounds familiar, that’s because this is the remit of the PMO.

The PMO and resource management

Resource management is a fundamental function of the PMO. The PMO is in the best position to manage an organisation’s resources because of its connection with the organisational strategy and its execution at a project level. An organisation may have the greatest strategic intent but without the right people on board there is no chance to deliver it. Organisations – and their PMOs – must be forward-thinking enough to invest in skills to ensure capability and capacity down the line.

Sadly, resource management is an often-neglected function, only rising in prominence too late in the project cycle when activities such as skills shortage or attrition, cost-cutting, and/or procurement constraints have had a negative impact on resources.

Used well, however, resource management can better inform decision-making and project approvals based on the organisation’s upstream and downstream capacity and capability. This includes prioritising projects, investing in the projects that will return the best benefits and pausing projects and/or reallocating resources to ensure the right projects are appropriately resourced to attain the outcomes required.

Set up your PMO for better resource management

To start, the PMO itself needs to be attuned to both the strategic side of the organisation and the resource challenges it faces. In a maturing organisation, there is a clear connection between resource management and sound portfolio management.

Resource management should begin from the project initiation and planning stage. The resource management function can advise the business of downstream capability to forecast whether a project is worth doing based on capacity and, if so, when, to maximise benefits realisation.

Resource management responsibilities include:

• strategic alignment
• portfolio management
• prioritising (and reprioritising) projects
• resource forecasting, with a supply and demand view
• capacity and capability management
• chokepoint management
• tracking and managing resources
• monitoring inter-project resource dependencies
• balancing the workforce including ensuring you have a flexible / on-demand aspect to the workforce.

One big challenge in resource management is the adept handling of choke points, particularly when it comes to high-value, low-capacity roles. For example, you might only have a few architects in a construction company but they work across dozens of projects a year; astute resource management will allow you to optimise the output of those team members without overtaxing them and prevent the need to hire more architects – or at least prompt you to develop a contingency plan that you can execute if there’s a delay that may develop into a choke point.

Not every PMO has a dedicated resource manager – though they should – but at the very least the PMO team should cover the breadth of the role. Small or growing organisations might benefit from specialist support such as mobilisation as a service or outcome-based delivery to fill in the gaps as their project team/s acclimatise to a wider-ranging portfolio.

What about agile resource management?

While the aforementioned style of resource management works well in tandem with clear scheduling and milestone standards, agile or hybrid PMOs need to find a way to manage resources according to cadence and velocity.

One method is using persistent teams, where you have a group or groups with predictable output that becomes a known constraint. You can then assign projects that suit their skills and experience and fit them within a larger portfolio as required.

At a time when many workforces are at capacity, it makes sense to be proactive about resource management to prevent burnout and skills shortages down the line. By identifying key skills gaps, investing in the right capabilities and balancing the workforce to ensure sustainable capacity, you help to prepare your organisation for its future pipeline of projects, which makes for more strategic and effective project delivery overall.

For better resource management, speak to the experts at PM-Partners for PMO guidance and targeted training programs to close the capability gap. Contact us or call today on 1300 70 13 14.