5 Best Practices for Efficient Workforce Optimization in an Organization

5 Best Practices for Efficient Workforce Optimization in an Organization

“A Gallup survey shows more than 85% of employees are not engaged & productive in their workplace.”

Low employee productivity and disengagement can lead to substandard quality of deliverables, project delays, unplanned absenteeism, and attrition. Subsequently, this can adversely impact an organization's profitability and sustainability.

Therefore, firms need to implement measures to improve employee productivity and performance. One of the effective methods managers leverages to achieve this is workforce optimization. 

It allows them to ensure competent allocation, utilize their resources to their fullest potential, enhance productivity, boost engagement and morale, and deliver projects on time. 

This article explains how Saviom’s resource management solution can help build an optimized workforce in the organization.

Let's begin with some basics. 

Workforce optimization: definition, types, and significance

Workforce optimization is the ideal technique or strategy for enhancing employee productivity, efficiency, and performance in an organization. It involves planning, forecasting, allocating, and scheduling available resources and utilizing them diligently till their maximum potential.

The employees of a company can be optimized at multiple levels to ensure profitability and sustainability.  

The following are some different categories- 

  1. Cost optimization- It involves analyzing the project budget and identifying cost-effective employees across the organization without hampering the project quality. 
  2. Utilization Optimization- This management strategy prevents over- or underutilization of resources and ensures that workloads are assigned evenly.
  3. Location Optimization- This helps managers to hire or allocate resources from the most appropriate locations based on the project needs by taking into account cost, skillset, and other factors.
  4. Capability Optimization- Capability optimization helps meet every skill and competency requirement of the projects by bridging existing capacity gaps and future-proofing the workforce.

Now coming to its business benefits, 

Workforce optimization enables managers to assign the right resources to the right tasks according to their skill set. As a result, when employees work on projects that align with their skill set and availability, they will not be overwhelmed, eventually boosting their productivity and performance.  

Further, by tracking the utilization rates, managers can immediately identify which employees are at risk of being under/overutilized. As a result, they can take course corrective actions ahead of time and ensure uniform distribution of workload. This will boost their work efficiency, prevent burnout and disengagement.

In addition to that, it also allows organizations to form the right mix of senior and junior resources. This will help reduce the workload of critical resources and enable non-critical resources to gain more hands-on experience and diversify their skill set.

Now that we know the nitty gritty concepts of workforce optimization, let's understand how to improve it.

5 ways to improve workforce optimization in a firm

Here are five ways in which you can create efficient workforce optimization in an organization-  

1. Forecast and bridge capacity vs. demand gap in advance

The resource managers should initially analyze the existing talent pool and identify the requirements ahead of time. This helps them identify resource excess or shortages in advance and take measures to bridge the gap. If there is an excess of resources, managers can bring forward certain project timelines, or sell extra capacity.  

Alternatively, in case of resource shortfall, managers can implement methods like out rotation and backfill strategies or training and upskilling programs. Or else, they can go for planned hiring of cost-effective resources. These measures can help the resource manager to bridge the capacity vs. demand gap and ensure the productive utilization of resources. 

2. Allocate competent resources to the suitable projects

Competent allocation of resources across various projects is crucial for maintaining improved productivity. When a manager assigns a less experienced employee to a high-level project, it becomes overwhelming and hampers their performance and morale. Additionally, assigning a skilled critical resource to simple tasks leads to disengagement.   

To avoid this situation, managers can get insight into various resource attributes like- availability, schedules, skillsets, competencies, etc. This will allow them to allocate the best-fit employees to the suitable tasks. As a result, it will reinforce employee engagement and improve their performance, thereby ensuring the timely delivery of projects. 

3. Monitor and track employee performance in real-time

When resources are not utilized optimally, it affects their performance, resulting in compromised project quality. If resources are over-utilized, they can face stress and burnout. Thus, to combat this, managers can leverage various optimization techniques like resource smoothing/leveling. As a result, it will ease their work pressure, reduce stress and improve productivity.   

On the other hand, underutilized employees can experience low morale, which decreases billability. To prevent this, managers can track the utilization levels of employees and mobilize them from non-billable to billable activities. As a result, the employees will be utilizing their capabilities and skills effectively, thereby ensuring productivity.

4. Facilitate training and upskilling opportunities to future-proof the workforce

When employees work on similar projects or tasks, it can create work monotony and stagnancy. In the long run, it can cause disengagement, low morale, and unplanned attrition. To prevent this, employers can provide career development opportunities, upskilling programs, on-the-job training, etc. This helps employees to hone their skills, and diversify their portfolios, thereby futureproofing them.

For instance- if there is a web developer in an organization with the primary skills of HTML, it will be challenging for the project manager to find a project relating to only a particular skill set. But if the resource is provided with a multi-skill building opportunity, then the resource can easily be assigned to multiple projects. This increases their billable utilization and also reduces the bench size. 

5. Use what-if analysis to address the resource constraints

When multiple projects require similar skills, organizations encounter resource constraints. To overcome this issue, managers can perform a What-if analysis to determine the feasibility of different resource allocation plans, compare and contrast various strategies, and select the most viable outcome.  

Thus, they can easily prioritize the projects and assign resources accordingly. As a result, the best-fit available resources are allocated to suitable projects for enhanced profit margins and higher ROI.

Now that we know the steps let's look at how resource management tool can help achieve the same. 

How can advanced resource management software help? 

Resource management software assists managers in maximizing the efficiency of their workforce.

Here’s how-  

It facilitates enterprise-wide visibility of all the resources and their attributes, such as skills, experience, capacity, availability, etc. This allows managers to find the best-suited resource with the right skills for the projects. 

Further, the tool’s forecasting capabilities and capacity-vs-demand report help foresee the skill gaps and proactively fill them through appropriate channels. Thus, it reduces the last-minute firefighting of resources. 

In addition, utilization reports help managers track employees’ real-time utilization levels and implement optimization techniques like leveling or smoothing if they are overutilized to ease their workload. On the contrary, if a resource is underutilized or working on non-billable/BAU tasks, managers can mobilize them to billable work can help enhance their billability.   

Lastly, the resource management software enables managers can leverage modeling and simulation techniques. It helps analyze various scenarios and compare different outcomes by changing multiple metrics such as availability, cost rate, etc. This allows them to arrive at the most viable outcome and apply it to the actual resource plan. As a result, it helps prevent potential bottlenecks while fulfilling resource requests, thereby retaining healthy profit margins.

The Bottom Line

With the steps mentioned above and the right resource management tool, managers can optimize their resources in the workplace. This will also boost their engagement and morale, thereby helping businesses deliver the projects successfully within time and budget, increasing the market reputation.

So, are you ready to take these steps and create an efficient workforce in your firm?