Agency Resource Management Guide: The Blueprint to Streamlined Success

There are two types of agencies: the proactive and the reactive types. Proactive agencies have a clear sense of what they can offer. Reactive agencies, on the other hand, let their clients guide their path to new opportunities and—their success. 

Agencies with a growth mindset know that resource management is fundamental to be at the cutting edge, keep the quality of their services high and their profit margins consistent.

In the following chapters, we cover everything you need to know to gain more control over your agency’s resource management so you can achieve better results, in the short and longer term.

In the agency business, the resources that you manage are your teammates. With an average workday in the western world being eight hours long, resource management is here so that you can plan out and apply your team’s time wisely.

Resource management is a method of allocating and planning resources to deliver different tasks within a business. Though resource management is needed to carry out complex projects and meet various deadlines and maximally utilize resources, effectively managing resources is a challenging job for agencies and services businesses.

Resource management is essential for balancing teammates’ workloads, especially in the agency world, where a sudden increase in projects is just as normal as dry periods. Thus, properly handling agency resource management is key for keeping both clients and employees happy.

As with any type of planning, resource management requires a commitment to understanding where your agency has been so that you can improve and grow in the future. Once set up and committed, the many benefits of resource planning start becoming apparent:

Read the top three reasons why forecasting is important for your agency.

Small agencies or studios may call their resource management pure planning. However, once your agency exceeds even five employees, you should look into having a dedicated place where you will manage your resources. Proper resource management tools should bring your team maximum efficiency and enable giving proper attention to priorities. Therefore, resource management is critical for the success of projects and an agency’s growth.

Before we get into the phases of resource management, it’s important to note that planning efforts should be organized around one or a few people. In agencies, this person is usually the operations manager or project manager. Sometimes, though mostly in the early stages of an agency, this person can be the CEO or general manager.

Operations managers and project managers are the glue that holds an agency together. Operations and project managers lead the charge and oversee incoming, current, and future work. Depending on the size of your agency (whether you consist of 10 or 100 people), you’ll have a couple of responsible people to oversee all the phases of resource management.

By assigning one (or in the case of larger agencies—a few) people to deal with all your resource planning, you can free up your production teams to focus on what matters most to your clients: delivering quality work on time. This offers several other benefits:

Now, let’s get back to the phases of resource management.

In an agency, generally, there are five main phases of resource management:

1. Estimating resources
2. Scheduling resources
3. Delivering projects
4. Optimizing resources
5. Analyzing results

To estimate resources, you need to collect and analyze data from the perspective of demand and supply. What will help you collect data and estimate in the first phase of resource management are: your sales funnel, scheduled resources, hiring timelines, and your delivery backlog. Let’s take a closer look at each of these.

A sales pipeline is an integrated, dedicated space within your agency management system for organizing leads and conversations with potential customers, and closing deals. When you know which stage the leads from your sales funnel are in and when potential clients will be closed, you have insight into increases or decreases in resource demand for the near future.

Are any of your teammates overbooked? Are there resources that are underused? Because your agency’s profitability heavily relies on the utilization of your resources, agencies need to be able to answer these questions at any given moment. Getting the answers to these questions is possible with a scheduling tool that links your agency’s services and time tracking to actual people. Scheduling enables you to plan your teammates’ time in advance. It quickly helps you to see who’s overbooked, under-booked, on vacation, or out sick.

Using an agency resource management tool, you can get a clear perspective on current and upcoming work, and it will tell you whether your agency needs to hire new talent or onboard contractors in the near future.

In an agency, it’s natural that certain projects and clients get put on hold to balance out the needs of others. Taking a look at the projects in your backlog will essentially tell you where resources will soon be assigned, and how you can further estimate for new projects coming along.

When scheduling resources, what’s key is to understand your agency’s actual capacity. So, you’ll need to find out how many hours a day your teammates can devote to the project in question. Now, no two resources are the same. It’s important to measure skills and deliverables against time, identify typical bottlenecks, and determine how much work a project will require. 

Combining that knowledge of time and resources with project expectations and timelines will enable you to outline a rough schedule, then get more and more specific with scheduling resources as things become clearer.

In the next five chapters, we’ll cover the pillars of running your business in agency project management software:

Delivering complex projects includes multiple stakeholders. That’s basically the main reason why project delivery is so complex. Ensuring optimal collaboration and as-smooth-as-possible delivery depends heavily on effective and transparent communication. When all your tasks and stakeholders are using the same tool and updates are available in real time, there’s less of a need to align during long meetings or update teammates and stakeholders individually.

Read how to streamline workflow in an agency management tool.

To optimize your resource planning, utilization reports will show you how effectively your team is working. With utilization dashboards, you can zoom in on departments, teams, and even employees. Having saved reports like this will help you discover blind spots and bottlenecks that are consuming your agency’s time.

If you’re a project manager or operations manager, you probably won’t necessarily wait until the end of a project to check your key metrics and analyze how your project is going. The key metrics you’ll most likely be looking at, perhaps on a weekly basis, are your utilization rates and profitability.

However often you do analyze the results of your initial resource planning per project, the closing of a project is the time when you’ll wrap things up, bring all the data together, and set an appointment to go through the results. From this review, you’ll be able to identify where your team did well and how you can improve your next project.

Utilization is an indicator of how much revenue you’re generating. Read more about utilization metrics for your agency.

Now that we’ve covered all the phases of resource planning, let’s take a look at potential blockers and challenges to be aware of when managing resources. As resource planning is a tricky business, there are quite a few to look out for.

When teammates don’t track time on a daily basis and resources are shifted amongst teams, what can happen is that you can lack visibility to your available resources i.e. their actual available time to work on a certain project. Agency owners and project managers need the ability to forecast work in advance, to make sure that in six months’ time, everyone will be getting a paycheck and business will be moving forward.

Many agencies see rapid changes in project management and sudden increases in demand. This is why resource management is a balancing act that relies on resource forecasting so you have a clear perspective on current and upcoming work.

Though the benefits of remote work are clear (reduced overhead costs, increased flexibility, and greater employee satisfaction), communication between remote working teams can suffer—and so can efficiency. How can you tackle the problem of resource planning when your agency is working remotely? 

Firstly, communication is key. Let your teammates know what you need from them and what you expect them to achieve. Ask them how they’re finding their workload and how they are doing on a certain assignment. Secondly, by scheduling resources teammates will understand who should be doing what and for how long.

Vacation and sick leave aren’t the first things we think of when resource planning, but it’s something to include and assume when planning out the next few months. If it’s wintertime, an employee can easily get sick, and if summer is rolling around, people will be going on vacation. Your teammates should also schedule their leave in your agency management tool.

Usually, when your agency hires new staff members, it’s a great relief for your team because it will eventually take some burden off of their backs. However, it takes time for new teammates to adjust to a new agency and projects. It’s important to keep onboarding timelines in mind, especially if onboarding new team members remotely.

As we mentioned in earlier chapters, having a macro and micro overview of your resources isn’t just nice to have, it’ll define your agency’s growth. The only way to effectively manage resources is to know exactly who is working on what, and when. 

The biggest pain point for resource managers and project managers is lack of visibility, because often, resources are assigned to projects across teams or departments and coordination of resources without software can be tricky.

See also: 12 Best Resource Management Software Solutions

Forecasting resources and scheduling teammates on different projects and services will tell you whether your agency needs to hire more people or not in the near future.

How does resource management work in Productive? Read Pro Tips: Master Resource Management in Productive.

When forecasting resource management in Productive, you can do the following:

Placeholders are a Productive Premium feature that gives you a new way to book upcoming work—ideal for planning resources in the short to long term.

In Productive, you can get a macro and micro overview of your resources and your future utilization using Reports. The Reports Library is a collection of over 50 prebuilt reports templates, where you can easily find the data you need. 

Among many reports in Productive you can choose between:

Simply said, utilization is the number of billable hours your team is delivering. Those are the hours you will eventually charge to your clients. Take into account time off (vacation, sick leave) too, because you need to know how much time your team has actually had at their disposal. That’s what we call available time in Productive.

You should aim for an average of 75% billable utilization across your team, which should bring enough revenue to cover your costs and make a profit. Utilization can also tell you if some services are requested more or less often by your clients.

If you want to check out utilization forecasting per staff member for a future project, you can do that in this report. 

See what will be the forecasted cost per employee and forecasted profit per employee. Based on the resources you’ve allocated to your project, you can already predict how busy you’ll be in the upcoming months and what kind of utilization rates you can expect. 

Go a step further and compare the future utilization of different teams or team members with specific skills. Once you know that, use it as a basis for your hiring plan and align it with your sales efforts. Once you’ve synced it all, there’s going to be perfect harmony in your agency—where everyone has just enough work on their plate.

Every agency has dry periods or holiday seasons when you’re producing less billable work. When planning for the future, it’s important to learn from history. If you realize you usually peak in some months, try planning your project start dates and resources accordingly.

Get a clear picture of which employees are working extra hours. Overtime by departments filtered by the last 2-3 months can show you which employees had overtime constantly. This is your red flag—you should plan to hire.

You can see forecasted time off usage by department. For example, if you notice that next month, three employees from your design department are going on vacation, you can plan for freelancers to take on a job.

If worked time and scheduled time differ, it can mean two things. Maybe you scheduled people incorrectly, or maybe the timeline of the project is going to extend for another month. You have to take this data into account when further scheduling. 

Also, you can filter all delivered projects by service type and have more accurate scheduling for these types of projects in the following months.

For a new hiring plan, you can group bookings by month and service type and accurately see where you are short with resources.

This report gives you insight into all your employees and their capacity. Who is available and who can take more work?

Agencies with a growth mindset recognize that resource planning is fundamental for optimizing performance so that profit margins can consistently increase.

Data and experience are crucial for making the right decisions when balancing your agency’s resources. Hiring a dedicated Resource or Operations Manager and having a resource management tool makes a dramatic difference when balancing schedules, utilization, and project management.