AGENCY GUIDE

Resource Planning
Guide for Agencies

Gain more control over your agency’s resources so you can achieve better results, in the short and longer term.

This guidebook is meant to provide information to all—from agency novices to agency leaders.

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    Introduction

    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.

    Resource Management: Balancing Workloads

    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.

    Resource Management: What’s In It for Me?


    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:

    Understanding the current and maximum capacity of your resources

    The ability to forecast revenue and profit for your agency

    The possibility to better manage a sudden increase in demand

    Quickly scaling when demand increases rapidly

    Effective resource management and hiring

    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.

    BRENDON NICHOLAS
    CO-FoUNDER and technical director,
    dotdev

    There was a lot of guessing before. We knew that there were hours spent and the hours that were quoted, but that was about it. Definitely not down to a level of individual resources or how much time we spent on internal projects. That’s a key thing that we get out of the reports that really feeds into our utilization and resourcing. If we know we’re spending 30% of our time on internal projects, then we know we’ve got the capacity to take on more work.

    Phases of Resource Management

    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.

    What Successful Resource Management Relies On: Operations Managers and Project Managers

    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:

    Your agency’s resource management will be far more efficient because a few people will have a strategic overview of your agency’s entire workload.

    There’s a clear line of accountability and responsibility.

    Teammates have a single point of contact for all things related to their workloads.

    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

    Phase 1: Estimating Resources

    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.

    Sales funnel

    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.

    Scheduled resources

    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.

    Hiring timelines

    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.

    Delivery backlog

    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.

    Phase 2: Scheduling Resources

    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.

    ORION JENSEN
    CEO,
    CLEAR LAUNCH

    I feel like consistency and predictability has been very hard to get in our world. Some clients have a release every six weeks for years, other clients have one-time, three-month projects. Being able to take all that variability and put it into a consistent process allows us to actually manage it with transparency.

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

    Phase 3: Delivering Projects

    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.

    Phase 4: Optimizing Resources

    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.

    Phase 5: Analyzing Profitability

    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.

    Potential Blockers and Challenges

    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.

    Lack of Visibility to Available Resources

    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.

    Sudden Increase in Demand 

    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.

    Remote 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.

    Leave Management

    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.

    Onboarding New Teammates

    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.

    Using a Resource Management Tool

    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.

    Patric Osburn,
    Service Operations Manager,
    Quintica

    Productive has alleviated a lot of the meetings that we used to have to discuss resourcing. We had different sheets all over the place. It’s live, easy, it’s made life simple…and it made our people productive! As a Project Manager, it definitely gave me more confidence to make decisions because I’ve got the data to do it now. If I need it to move resources around, add a change request, pull things back, I have the visibility to do that. So I’m more in control now.

    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.

    Essential Resource Management Tool Features

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

    Display all your bookings per person or per project.

    Edit, duplicate, repeat, split up, or delete bookings.

    Use filters to zoom in on what you want to see (teammates, teams, budgets).

    Turn on heat maps or capacity indicators to see who’s overbooked.

    Add placeholders as upcoming bookings, for people who are not yet a part of your team.

    Allot time for different teammates and turn on Automatic Time Tracking so their time starts getting logged based on the hours you scheduled. 

    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 Insights. The Insights Library is a collection of over 50 prebuilt insights templates, where you can easily find the data you need. 

    Among many insights in Productive you can choose between:

    1. Billable utilization through time or by people

    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.

    2. Forecasted billable utilization through time, by people, or by department

    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.

    3. Overtime by people 

    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.

    4. Forecasted time off usage by people or by department

    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.

    5. Scheduling accuracy by projects

    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.

    6. New booking insights

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

    7. Capacity insights

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

    Orion Jensen
    CEO,
    Clear Launch

    The truth is, we can quickly get a pulse for where we are, at any given time. One way to get a pulse on the business is to get the monthly financials, but for the monthly financials to come in, it takes the Accounting department about 15 days after the month ends before we get a picture of how we really did that month. Whereas, with the financial tools that Productive offers, you can check it on a daily basis. We have clear visibility at any given time.

    Conclusion

    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.

    Glossary

    Resources in the agency business are mainly human resources.

    Resource Management is a process within project management used to efficiently and effectively manage human resources and other tangible assets to achieve desired outcomes.

    Resource Management Tool is a software application for managing resources within an agency, or a feature within an end-to-end agency management system used for resource planning and scheduling.

    Resource Forecasting is the process of predicting your agency’s future resource requirements.

    Scheduled Resources are employees planned within a work schedule to perform certain agency services or tasks to deliver a project.

    Sales Funnel is a visual snapshot of where prospects are in the sales process.

    Remote Work is a flexible working style that enables employees to work from anywhere, in which employees do not commute to a central office.

    Leave Management is the process of handling time-off requests made by employees for different reasons within the larger process of resource management.

    Billable Utilization is the percent of time agency employees spend working on tasks or services that will be billed to clients.

    Forecasted Billable Utilization is the projected percent of time agency employees will spend working on tasks or services that will be billed to clients.

    Overtime is time worked by an employee that exceeds their agreed upon working hours.

    Agency Profit is the difference between the revenue your agency earned and the amount of money your agency spent on expenses.

    Agency Profit Margin is the ratio of a company’s profit (sales minus all expenses) divided by its revenue. The profit margin ratio compares profit to sales and tells you how well your company is handling its overall finances.

    Agency Project Management includes the five stages of project management developed by the Project Management Institute (conception and initiation, planning, execution, performance and monitoring, project close) delivered by an agency business.

    Agency Utilization Rate is a percentage that shows the amount of an employee’s available time used for effective, billable work. An employee’s utilization rate is a key metric for agencies to track. It’s a measure of billing efficiency that helps the company understand if it’s billing enough to cover its costs plus overhead.

    Overhead Expenses are all your agency’s costs that don’t directly generate revenue. Overhead costs of an agency typically include facility costs, salaries of non-billable employees, professional services, licenses, and plans.

    Billable Utilization, also known as “client time”, defines the time that an employee spent working on projects that are billable to clients.

    End-to-End Agency Management encompasses running complete workflows that happen within an agency business: from sales to billing projects.

    Project Management Workflow is the process of ordering tasks and activities between key milestones in an efficient and meaningful sequence. 

    Time Tracking is a system of recording work done by employees to ensure that those employees are compensated accurately.

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