Why Is Agile Workforce Management Important for Project Managers?
Not long ago, businesses concentrated on hiring only a permanent, full-time workforce, upskilling their skill set according to the requirements. The employees were also expected to upgrade their knowledge as per market demands regularly. However, ever-growing competitive markets, technological advances, and the ongoing pandemic have necessitated project managers to rely on contingent resources, adopting resource management practices for their agile workforce.
The agile workforce can swiftly adapt to and embrace change in a way that facilitates innovation, development, and growth. As a result, the concept of agile workforce management emerged to address the volatility in the global market and futureproof the workforce for any business.
Here, we discuss how modern resource management practices can help project managers get the best out of the agile workforce. But first, let’s understand why workforce agility is so important in the modern business realm.
Why Is Agile Workforce Management Important?
A research report by McKinsey reveals that “Due to rapid technological development, 64% of businesses would need to train/upskill or replace more than a quarter of their workforce by 2023.”
That means agility is a new critical factor that fosters organizational and project success. For example, let’s compare a scenario where two different projects with the same initiation and closure date face resource shortages. The first project assigned a pool of permanent resources within an organization, and the other followed a hybrid pool of permanent and contingent resources.
Forming an agile workforce strategy helps create a balance of full-time, part-time, and contingent workers.
If we assume that around 70% of the project cost is related to resources, then which project do you think will drive more profitability? Undoubtedly, the latter. An organization is agile only when its workforce is agile. Thus, forming an agile workforce strategy helps create a balance of full-time, part-time, and contingent workers. This ensures that your company can constantly meet its ever-changing workforce and project targets.
Traditionally, resource plans were implemented on an annual basis, with budgets firmly set for the year. This could have been sufficient in an era when markets were more predictable. But in a period of digital transformation, hiring a contingent workforce instead of only filling full-time positions proves to be more cost-efficient.
Agile workforce management maximizes flexibility while optimizing resource costs. In addition, agile practices enable project managers to productively use resources, minimize project risk, and emphasize remote collaboration and communication.
5 Tips for Managing Your Agile Workforce
Promoting workforce agility means enabling your project team to adapt to changes quickly and encouraging them to develop new skills, future-proofing them in the long run. Here are five essential tips that help you promote agile workforce management:
1. Form a Resource Plan Before the Project’s Onset
Resources are limited; therefore, foreseeing and creating an effective resource plan helps to fulfill the project demand in advance. Hence, proactive resource planning helps project managers to deliver projects on time and budget regardless of shifting deadlines, changing priorities, and project evolutions. In addition, resource planning allows project managers to attain optimum utilization of the team members.
Resource planning can be done considering two viewpoints. First, managers need to estimate the overall resource demand by roles and skill sets. Second, they should fulfill all the key or critical positions before the project starts by requesting the resources ahead of time. Moreover, resource forecasting and capacity planning enhance business profitability by reducing last-minute hiring and firing activities, thereby facilitating successful project delivery.
2. Build Multi-Skilled Resources for Effective Utilization
The success of every business is not only determined by the size of its teams but also by the skills every people resource possesses. Therefore, to stay competitive and sustainable for future demands, companies must invest in training and development activities.
Furthermore, this multi-skill building among resources promotes billability. For instance, if a resource’s primary skills are not matching any suitable project vacancy, managers can assign them to work based on their secondary skill sets.
Resource skill development can be encouraged in various ways. For example, companies can:
- Provide learning-on-the-job opportunities to resources on client-facing projects
- Host Individual Development Plans (IDP) for training or upskilling resources
- Encourage people to expand their skills by giving monetary incentives
Thus, providing space for a learning curve within an organization can help grow a stronger team and a wealth of skills that can support future projects.
3. Ensure Alignment of Skills and Project Tasks
Assigning any available resource to projects without assessing their skills will likely slow down the project progress in the long run. Effective resource scheduling enables managers to schedule the right personnel on the right task based on skillset and availability. It ensures that the resources are completing work on time and are productive.
In case of rigid deadlines, managers can also bring in resources with similar skills and adjust task timelines to negate the chances of schedule overruns. Thus, the alignment of skills with the project tasks makes sure that the teams are working towards quality-driven project deliveries.
Read more: 6 Essential Management Skills Needed in 2021
4. Create an Optimal Mix of Permanent and Contingent Resources
With the rise of agile, the hybrid workforce is gaining momentum within service organizations. Therefore, balancing the resource pool with a judicious mix of highly skilled permanent employees and contingent workers keeps work operations agile and lean. That way, businesses can remain competitive without completely overhauling their workforce. It also fosters innovation and helps in meeting ever-increasing client expectations.
Having an optimal balance of permanent and contingent resources will help manage the workforce and projects efficiently.
For instance, when a sudden demand emerges in a project, and if an organization has only permanent resources, a firm would be more involved in the last-minute hiring/firing. Therefore, having an optimal balance of permanent and contingent resources in the 70:30 or 80:20 ratios will help manage the workforce and projects efficiently.
5. Proactively Strategize Succession Planning for Key Resources
The sudden resignation of niche or key resources severely affects the progress of a project and jeopardizes the delivery. Unfortunately, most companies do not have the right tools that can help to futureproof the workforce ahead of the curve. A robust human resource management solution can help overcome this situation by enabling a proactive succession planning process.
These tools help to identify competent resources and aid companies in preparing existing employees for higher-level roles. This can be done in advance through training and development opportunities, such as shadowing or knowledge transfer techniques. In addition, it helps companies in building a niche skill set and emphasizes both professional and personal enrichment of resources.
As Gary Hamel said, “You can’t build an adaptable organization without adaptable people.” The tips mentioned above will help formulate a full-proof plan in managing the agile workforce and enhance project profitability. Thus, managing an agile workforce is crucial for organizations working in a remote or hybrid work model across the globe. It helps them innovate, embrace market changes, and maximize productivity and project profitability.