Project management
min read

What is resource allocation and why is it important?

What is resource allocation and why is it important?

Cooking for a lot of people is hard. You don’t know exactly how much everyone will eat, and you don’t want to be wasteful by buying too many ingredients and ending up throwing stuff out.

But if you don’t get enough, someone might go hungry. While some people have offered to help, you don’t know who’s a good cook or who’s more likely to chop a finger off when dicing the mushrooms…

This is a classic resource allocation issue. Think of cooking as a work project. You need to decide what physical resources you need (ingredients), identify the people with specific skills (who’s a chef vs who’s setting the table), and allocate enough time to finish on time (having the food ready when everybody is hungry).

So what does that look like in a work context? Why is good resource allocation helpful, and how do you achieve it? Find out all of this and more with some helpful tips and tricks below.

What is resource allocation in a work context?

At work, resource allocation is figuring out how to best use the resources at your disposal to maximize the success of your business. That could be a lot of things – it could be figuring out who’s got the most expertise related to a new project you just took on and then assigning it to them.

Or, it might be budgeting for the next month, or looking at the time you have and making sure you’re spending it most effectively. Basically, it really is what it says on the tin – it’s using and allocating your resources and (hopefully!) doing so in a way that optimizes your business’ efficiency and productivity.

What counts as a resource?

The short answer is that anything that you can use is a resource. Money, time, space hardware, computer programs, techniques, ideas, skill sets – all of these are resources. Even people, teams and departments – although you definitely shouldn’t think of people just as a resource!

What are the challenges of resource allocation?

Resource allocation can be hard: whether it’s inadequate employee communication with employees or a lack of prioritization. Here are a couple of resource allocation challenges:

Poor communication

If not everyone’s in the loop, it’s easy to do a bad job at allocating your resources. If you don’t know what’s going on specifically in your projects then you don’t know what resources are needed.

When team members don’t know what resources are available, they will encounter challenges in determining what to request or how to effectively utilize them. When people are assigned to tasks they’re not good at or lack the time, money or physical resources to do well, they become disheartened and don’t perform well. So, good resource allocation relies on good communication.

Resource scarcity

This is when there isn’t enough time, money, or people to do something. Or when it’s difficult to decide what resources to prioritize. This can easily happen if you have lots of projects and lots of things going on, particularly in teams where certain skill sets or people are in high demand. Knowing how to prioritize effectively is crucial to good resource allocation.

Scope creep

Scope creep is when the scope of a project keeps changing and increasing, meaning more resources are needed than initially anticipated. It easily happens, and avoiding it means you won’t use extra resources you didn’t intend to on a project ballooning way beyond its original and intended size.

What’re the benefits of good resource allocation?

Allocating resources badly feels like trying to get way too many groceries in from the car all by yourself in one single trip. You’ll probably hurt yourself, a bag will definitely break, and you’ll have the messy aftermath of spilt milk and smashed jars of olives all over the driveway.

But if your partner helps you, the job can be done in one trip with the effort shared between both of you, minimizing the chances of spills, waste, and injuries.

Distributing tasks and allocating your resources well helps you be more efficient, get things done to a higher quality, and reduce time wasted cleaning up. The perks of good resource allocation are endless:

Maximize your efficiency and productivity

When it comes to task delegation, it’s best to play to people’s strengths. Putting the people on your team who are best at coding on a project that involves lots of coding obviously makes for a better project: the job will be finished quicker, using less money and other resources. Good resource management helps you do more with less, all whilst ensuring high quality.

Reduce costs

If things are taking less time, it costs less and uses fewer physical resources. And if you know exactly what resources you need for a project, you won’t waste any extra on something that didn’t need it. The resources that you’ve saved can then be reallocated to a project where they can be made much more useful.

Keep your team happy

Having the right amount of resources available is key to the success of a project. Attempting a job without having the resources required is an easy road to disaster: employees become disheartened, tasks are botched and things take longer to complete.

However, having too many resources at your disposal can also be detrimental to a project, it can become overwhelming and less enjoyable. Burnout is very real, and good resource management can help to avoid it in you, your employees and your team.

So how do you do it?

Resource allocation shouldn’t be a daunting task, and it is definitely worth doing properly. Here are a few good tips on how to do it:


This one sounds obvious, but it’s easier than you might think to let things slide and not prepare enough. If you don’t have a good plan for your projects, it’s very hard to allocate resources well. 

Establish specifically what the project needs, how long it will take, who should work on it, and when you’ll do the project alongside everything else. And crucially, stick to the plan! Set reasonable goals and schedule meetings making sure you’re on track to meet them, and you’ll already be on your way to better resource management.

Know your team’s capacity

You need to know what your team can realistically do before you give them a project that might stretch them a bit too far. You need to know your team really well – their individual strengths and expertise, their availability, ongoing tasks, their pace, and their areas of specialized knowledge.

Then you have an accurate picture of what your team can actually do well, and what they’re likely to need to do those things. Once you know that, you can assign work and other resources accordingly.

Track performance and time

If you don’t know how your team is doing, it’s hard to know what they need. Tracking your teams’ performance and time can vastly increase productivity and reduce burnout. You’ll be able to see where the team is falling behind, when their peak hours of productivity are, and whether resource distribution is holding them back. Time data from previous projects also allows you to better set goals and deadlines for future projects without causing overloading on the team.

Review and optimize

Continue to review how things are going with meetings, review data from time tracking, and pay close attention to the plan you made at the start of the project. Make sure you’re not stretching your team’s abilities or workload and cut out inefficiencies you see through the time data.

At the end of a project reflect on the metrics. Did you meet the goals you set? Where did you fall short? What went well? What will you do differently next time? Keep reviewing and optimizing and you’ll be in great shape to allocate your resources better in the future.

How Timely can help

Timely has a complete toolkit to help you with resource allocation in project management. The people dashboard gives you a centralized location to effectively manage capacity, overtime, and planned work, enabling you to optimize your resource utilization.

You can easily identify areas where you’re under-resourced, assess team members’ workloads and assign tasks accordingly, while still ensuring work aligns with capacity in real-time.

“At a higher level, Timely gives us an overview of how we’re doing with our projects: if we are fulfilling the hours, if we are spending less or more time on client projects, and we look at people's performance and capacity.” Ivan Rainovski, Delivery Director at Corsearch


Good resource allocation really can make or break a project. It’s not always easy and comes with challenges but, getting it right is well worth the effort. It will allow you to do better work with less time, money and physical resources, and empowers people to work on what they enjoy and excel at.

With a thorough plan and sticking to it, reducing team burnout by keeping an eye on progress and capacity, and continuously optimizing resource allocation, you can position yourself for success.

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