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Resource Allocation: 5 Step Guide For Project Managers

James Elliott James Elliott Last Updated:
Resource Allocation - 5 Step Guide For Project Managers

According to PMI, barely 50% of projects deliver on time. Drilling down, 23% of those failures cite poor resource allocation as the primary factor.

Resource allocation works the same way, whether for a project or for day-to-day operations. But, allocating the right resources at the right time could be the difference between success and failure.  

In this article, we’ll give you the full rundown on resource allocation. We cover what it is and how to master it.

Specifically, you’ll learn: 

  • What is resource allocation?
  • Why is resource allocation important?
  • Common resource allocation challenges managers face
  • How to allocate resources effectively?

Let’s get started!

What is resource allocation?

Let’s start with the resource allocation definition:

Resource allocation is the process of assigning assets in a manner that supports your team’s goals.

In practice, it means having what you need to get the job done on time.

Resources come in many different shapes. Here are some common examples:

  • People: Team members, often with different skill sets, who contribute to the project.
  • Equipment/Tools: Anything from computer software to a chainsaw, depending on the organization.
  • Facilities: The environment needed to do work, most commonly office/meeting room space.
  • Materials: Consumables to create your outputs. Think paper, pens, or even fuel for travel.
  • Budget: The actual cash you’ll need to purchase any of the above resources.

Our focus in this article is on managing people resources. But the same concepts apply when managing other types of resources.

What is the importance of resource allocation?

Having the right resource at the right time is critical to project success.

A project is made up of tasks. Often tasks depend on other tasks. This means, your entire project can be delayed if a single task misses a deadline. And often, tasks get delayed because a resource to get it done is not available.

Not having access to the right people, tools, or materials will lead to delayed tasks, missed deadlines, and failed projects.

By following a systematic resource allocation process, you ensure the resources you need are available when you need them. Also, an upfront resource allocation plan avoids resource conflicts with other teams.

Pre-planned resource allocation also helps identify gaps in resource availability. That way, you can plan around the unavailability of key resources.

Common resource allocation challenges for managers

We live in a world where change is constant. And, to deliver projects on time, you need to adapt your plan constantly. That’s what makes resource allocation so difficult.

Here are some common problems that can trip you.

Changes in project scope

Workloads can change at any moment. Scope changes will undoubtedly lead to your resource requirements changing, so you need a resource allocation plan that’s flexible.


Fully assess scope changes before they’re approved. Then identify if the current resource allocations remain sufficient or whether changes are required.

Changes in resource availability

Resource allocation is rarely static and there are many scenarios that bring changes. Whether that’s a team member off sick or a late supplier delivery, try to factor contingency into the resource allocation process.


When building your initial project plan, try to factor in some resource contingency. This will give you room to maneuver for minor changes. If the consequence is major, take immediate action to source replacements.

Task delays

No piece of work is without its dependencies. That’s why a delay in one step of your process has a cascading effect on other work. Because of this, you may lose your resource availability window.


When building your initial project plan, identify key dependencies and plan contingency for those resources. Understanding Critical Path Analysis will help here.

Location and timezone differences

A remote/distributed team comes with it’s own set of challenges. Timezone difference is a big one. This is especially true when bringing people together for collaboration as the window of the crossover will be small and the risk of delay is higher.


Work with your team to maximize resource crossover. For example, could team members work flexible hours to maximize their effectiveness? The greater the crossover the lower the resource allocation risk.

Not acknowledging resource allocation challenges can be costly.

On the other hand, things can go a lot smoother by identifying these challenges and planning for them.

How to allocate resources effectively?

So far, we’ve covered what resource allocation is, why it’s important, and the key challenges. Now let’s answer the key question — how exactly do you allocate resources?

Step# 1. Map out your project timeline

First, depending on the project methodology, identify project phases.

Second, estimate how long each phase will last and set clear milestones at the end of each phase.

Third, identify the major tasks for each phase.

And finally, map the phases, milestones, and tasks on a project timeline.

This may seem like a lot of work. But, creating a project timeline with Toggl Plan is really easy. Click on the date to add a task. You can also import all your tasks in a CSV file to create your timeline in minutes.

Project Timeline

Step #2. Identify project resources

With a detailed task timeline ready, it’s time to identify the resources required to complete each task.

Past team knowledge and experience come in handy for this.

For example, for a complex task, you may want to identify a team member with advanced skills or experience. On the other hand, for simpler, resource-intensive tasks, a bunch of interns may suffice.

Step #3. Find available resources

Now that you’ve identified the tasks and resources, it’s now time to check the resource pool. This is the key to mitigating the resource allocation challenges we covered earlier on.

Remember to look out for resources that:

  • Aren’t on other assignments,
  • Aren’t on an absence such as a holiday,
  • And meet any time zone restrictions the project may have.

Some team members often work on multiple projects. In such cases, you want to look at their capacity. And, find if they can spare some hours for you.

Just like the Project timeline, Toggl Plan also has a team timeline.

This makes it really easy to identify available resources. On the team timeline, you can see what each team member’s schedule looks like, across projects, and including their vacation off-days.

Team Timeline

You can also add estimated hours to each task to identify capacity opportunities and manage team workloads.

Step #4. Allocate resources

So far you have answers to:

  1. What tasks need to be done, by when?
  2. What resources are needed to do these tasks?
  3. And, what resources are available?

Next, depending on your organization, you may have to request a resource for your project. On the other hand, if you’re a small team, you can go ahead and add the resource to your plan.

In either case, you want to include some buffer time to deal with runtime challenges.

Step #5. Monitor project schedule

Any changes to your project schedule can and will impact your resource allocation plan. That’s why you need to keep a close eye on any changes to the project schedule.

Watch out for:

  • Delayed tasks that cause a significant delay in dependant tasks.
  • Unplanned off-days.
  • Over-worked team members.
  • Changes in business goals and objectives that may adversely affect resource availability.

Combined together, the project plan and team timelines in Toggl Plan give you a clear overview of your projects and resources.

How to deal with runtime resource allocation problems?

Often, after all the planning, things may still go wrong.

Depending on the flexibility of your project’s delivery date, you can use two techniques to deal with runtime resource challenges.

  • Resource leveling
  • And resource smoothing

Resource leveling vs. Resource smoothing

What method you use to deal with a resource crunch situation depends on the type of project and time constraints.

Resource leveling is used for projects with flexible time constraints. For example, research projects. In resource leveling, the project schedule is adjusted to work with depleted resources.

With resource leveling, a manager reworks to schedule to identify when the project will be completed with given resources. That’s why, resource leveling is also known as resource-constrained scheduling (RCS).

On the other hand, resource smoothing is used when a project’s deadline cannot be extended. That’s why resource smoothing is also known as time-constrained scheduling (TCS).

Here the manager optimizes existing resources to ensure that all tasks still get completed on time.


Every one in four projects fails, because of resource dependencies.

Understanding how to allocate resources and planning project resources can be the difference between a succesful and a failed project. That’s why resource allocation becomes so critical.

Also, allocating resources is not a one-time planning phase activity. Situations change. And, that’s why, the need to continuously monitor your project schedule to identify resource risks.

Toggl Plan is a beautifully simple project planning and execution tool that can help you manage your resources and deliver a project on time.

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