Poor resource planning costs thousands: look out for these four warning signs

18 July 2019

Employees are simultaneously your biggest cost and your biggest source of revenue. To drive performance at the bottom line, it’s therefore crucial to utilise your resources as best you can.

But effective resource planning isn’t as straightforward as it might seem. In fact, many businesses are unwittingly losing thousands of pounds per year to lost productivity, employee attrition and unnecessary spending on external resources; all stemming from inefficient resource planning.

In this blog, we highlight four symptoms of poor resource planning, consider the causes, and explore how your business can get on the road to healthy resource utilisation.

Symptom one: unnecessary spend on external resources

Every employee has a unique mixture of skills, competencies and experience. The larger the business, the more difficult it becomes to understand which capabilities exist in the workforce.

For example, consider a project that requires proficiency in a specific language. Businesses that lack a mature approach to resource planning will have no way of knowing whether one of their employees possesses language skills. These companies may have no choice but to rely on a third-party provider—a costly alternative.

Every time the business engages external resources rather than existing employees, operational cost-effectiveness suffers. Operating in this siloed way acts as a significant drag on efficiency, and can hinder businesses from achieving their strategic goals.

Symptom two: uneven work allocation

To assign work in an efficient way, businesses need to be aware of the capacity at which their employees are working. They also need to have a clear overview of supply and demand as it relates to projects in the pipeline and spare capacity in the business.

Without this insight, it’s easy for workloads to become unbalanced. In some areas of the business, people may be struggling with demanding to-do lists. In others, employees might struggle to find enough useful work to fill their day.

One of the major risks of uneven work allocation is reduced client satisfaction. If the business is unable to deploy all available resources to complete urgent projects, it is easy for deadlines and quality control to slip. In short order, companies can cause serious damage to hard-won client relationships—and even put repeat business under threat.

Symptom three: high employee turnover

Employees who are routinely allocated to high-volume, high-stress projects are at an increased risk of burnout—a leading cause of employee attrition. On the other hand, employees who lack stimulating, rewarding work will soon start to look for opportunities elsewhere. If businesses cannot allocate work evenly, then both these situations are likely to develop, increasing the rate of employee attrition.

In addition to a negative impact on overall workforce morale, employee attrition carries significant costs, some of which may not be immediately obvious. The combination of lost productivity and time spent on external recruitment and training means that it can take as long as three months to break even on investment in a new hire.

Symptom four: low responsiveness to change

To jump on new opportunities rapidly—without reducing service levels for existing clients—businesses need the ability to identify unused capacity in their workforce. Naturally, having an under-utilised, high-value resource on the bench is costly. Moreover, businesses need the flexibility to allocate new projects to employees with the time and skills to perform the work.

Without visibility into resource planning processes, organisations will find it extremely difficult to respond effectively when opportunities emerge. As a result, they may find themselves forced to turn down valuable engagements or unable to deliver optimal results—even though they may have the capacity to carry out the work to an exceptional level.

Poor resource planning: what’s the cure?

An effective approach to resource planning can solve all the challenges discussed in this blog. By allocating work in a balanced way that considers each employee’s unique skills and competencies, businesses can maximise utilisation, reduce attrition, capitalise on new opportunities and avoid unnecessary spend on external resources.

This kind of advanced resource planning is highly complex. Projects require different skills, employees have varied skills profiles and strengths, and deadlines can change at short notice. Spreadsheet-based approaches are simply not up to the task.

Retain offers a proven resource planning solution that makes it simple for businesses to optimise resource utilisation—potentially saving thousands of pounds per year through improved utilisation.

If you recognise any of the symptoms above, then there’s never been a better time to get informed about resource planning. To learn more, click here to read the Retain eBook: “Is inefficient resource utilisation hurting your bottom line?” now.