10 Steps to Optimize Resources in Agency Project Management

Resource optimization involves strategically allocating resources to meet project goals (on time and within budget) while minimizing waste and maximizing efficiency. It encompasses various techniques and methodologies — but ultimately, good resource management comes down to good project management.

Because there are so many ways to approach resource optimization, most advice on this topic is conflicting, confusing, or discussed at a very high level. You’ll hear tips like “adjust project timelines to account for available resources” or “schedule resources for the project’s most critical tasks first and work backwards.”

While this advice serves as a good starting point for agencies, it doesn’t address the details of strategically using resources or adjusting resource allocations to keep projects on track. So, we’ve created this guide of our best practices to improve resource management and optimize utilization.

1. Assess & understand your agency’s resources

First, understand the resources available to you (i.e., who and what you're working with).

You should consider both a) internal team members and b) external collaborators you frequently rope into agency work — thinking specifically about:

• Each person’s unique skills, experience, and development opportunities. Look at the tasks or projects they’ve been assigned to in the past and where they’ve historically excelled.
  
  

• Resource availability. Not just the total number of hours employees are available each week, but also their weekly schedules and when they’re available (think about meeting commitments, company holidays, and PTO).
  
  Note: You don’t have to know everyone’s exact schedules or planned time off, just when they’re generally available. Managers can use this as a starting point and make case-by-case scheduling decisions, considering factors like PTO, when planning new projects.

The first step to improving optimization efforts is understanding HOW and WHEN to schedule project resources. This gives you the information to schedule the right resources to the right tasks at the right times — and make the best use of resources.

It helps to create a shareable spreadsheet with everyone’s information so you can see who is on your roster, where you can schedule them, and their availability. Then, project managers can reference this when creating project templates and planning new work.

2. Establish clear, repeatable processes & resource allocation rules

Templates, templates, templates!

As mentioned above, how well you manage resources depends on how well you understand and manage your projects. (Good project management = good resource management.)

Once you know more about your available resources — how and when to use them — you can begin defining project workflows and anticipating resource requirements.

We suggest creating detailed templates for all of your project or service types:

• Assign tasks, subtasks, and task dependencies for all key deliverables. You can use your work breakdown structure to guide this.
  
  

• Set time allotments for each task and subtask. Remember to plan for feedback rounds and other issues that may arise along the way, and incorporate those resources into your project schedule. (Failing to account for feedback and potential problems is a key reason projects exceed timelines and/or budgets.)
  
  

• Determine who can complete tasks. Is there a member of your team you can place here, or do you need to bring in an outside collaborator? You can specify the persons or departments to complete tasks or flag tasks that require additional resources so managers know to source them before project kickoff.
  
  

Take a look at our example template below. It shows the key phases of each project, all the tasks planned within each phase — including revisions and client feedback — and who (or what team) each task is assigned to.

Templates help you deploy clear, repeatable, and scalable processes, and they simplify and streamline project planning so managers don’t have to do this mental gymnastics every time a new opportunity closes.

That said, you should not look at creating templates as a “set it and forget it” task — you should always look for ways to improve your processes. Are there opportunities to…

• Shave time off a particular task?
  
  
• Reduce feedback processes for specific deliverables?
  
  
• Or swap resources to complete projects more efficiently?

In addition, project managers should consider opportunities to build upon or fine-tune typical offerings so your agency can better appeal to evolving client needs, leverage available resources and their skills, and increase project ROI and agency profits.

Beyond creating and optimizing templates, managers should also communicate processes to ensure everyone understands typical workflows and how to perform in their roles.

They can do this via in-person meetings or share documents listing processes and who to ask when questions arise. This helps smooth the project kickoff, ensures employees know what they’re responsible for and how to proceed, and prevents managers from fielding dozens of questions.

3. Provide periodic training to support employees in their roles

On that note, you should provide regular training sessions or check-ins with employees, especially newer hires or younger team members, to support and help them perform better. This has two huge benefits:

1. It helps your project team members improve and evolve. They become your experts for specific tasks and develop new skills to assist in other areas.
   
   

2. It boosts employee satisfaction, allowing them to feel seen and appreciated. Employees who feel like assets to the agency are more likely to feel invested and treat the agency as if they were owners or partners. This not only helps retain employees but also encourages them to get involved in new ways.

Human resources are an agency's most valuable asset. Investing in employee development enables you to leverage your team in new ways, leading to greater success in both the short- and long-term.

There is no “best way” or set frequency for scheduling these check-ins; you could set an initial goal of doing them every quarter and then schedule in-between sessions on a case-by-case basis.

4. Monitor & track employee hours in real-time as projects progress

While we suggest following all of the best practices on this list, this one is arguably the most critical — and the one teams have a tough time implementing.

You cannot analyze or optimize resource utilization if you are not tracking employee hours, in the context of workflows, in real-time. Let’s explain.

Most agencies we talk to track employee hours somehow — whether they use a separate time-tracking system or employees record hours in a spreadsheet. However, there are a few flaws with this:

• Employees do not consistently log hours. In a best-case scenario, they might update at the end of each day, but more often than not, we see that they only log hours at the end of each week (or after managers nag them to update spreadsheets).
  
  

• Managers have no idea which projects or tasks the time corresponds to. They might see that somebody clocked 8 hours in a particular day or 40 hours in a week, but they can’t see what employees were working on or how many hours they spent on each task.
  
  

• Managers don’t have visibility into real-time resource attributes, such as capacity, availability, and utilization, so they cannot adjust resource allocations on the fly.

In the end, managers can only gauge how much time each employee puts in.

Did team member A clock more hours than team member B? Is team member A scheduled for more hours than they usually are?

But, the analysis stops there.

Instead, agencies need to use a project management tool that includes native time tracking so employees can log time on actual task cards within the workflow.

This mitigates the points above by:

• Prompting employees to submit time more frequently. These systems will remind employees to add hours when they complete tasks and every time they work on a particular task (say, if they start a task one day, pause, and finish another).
  
  

• Providing time analysis and productivity reports that show managers exactly where employees spend their time. They can see employee hours by project, service, or client and quickly tie hours back to individual tasks.
  
  

• Displaying real-time utilization metrics in staff scheduling dashboards to guide managers when assigning and re-assigning work.
  
  

This also gives managers the insights to:

• Compare billable vs. non-billable hours, create utilization plans, and shift more resources toward billable work. For example, suppose a senior designer with a higher billing rate is spending more time on internal projects than client projects. In that case, we’d advise shifting their schedules and assigning them to more client work — perhaps somebody with a lower billing rate can take over the internal project, if you can’t pause and resume later.
  
  

• Review hours per task and measure averages to fine-tune project schedules. Then, teams can budget the appropriate number of hours per task. This helps prevent delays and write-offs.
  
  

• On that note — they can also pinpoint outliers to understand their root and troubleshoot.

• • Does person A take longer than the average because they’re new and still honing their skill?

  • Is this a seasoned employee who needs more training (or is just slacking off)?

  • Were there unique client needs that increased the complexity and made the task run longer?
    
    

• Monitor real-time project progress and shift plans on the fly to keep projects on course. Tracking hours on task cards as work progresses allows managers to easily see when tasks are nearing deadlines or about to exceed allotted hours. Instead of seeing this data after the fact and checking in once the damage is done, managers can jump into tasks, determine why they’re taking longer than usual, and find a solution.

Read more: How to Track Project Management Hours

5. Measure employee utilization vs. realization

Measuring utilization rates is important, but a best practice often overlooked — even by teams practicing #4 — is to compare utilization to realization rates (i.e., budgeted hours vs. actual hours).

This lets you measure the time you can actually bill for and reduce write-offs. You can realize employee time at their full billing rates.

An easy way to do this analysis is to highlight and review projects that exceeded timelines or budgets, and understand the why:

• Where did projects go off course? (i.e., What specific tasks caused delays?)
  
  Consider average times per task. Did the project exceed budgeted hours simply because managers didn’t plan ample time? If this is the case, the answer is to improve your project schedule, providing more wiggle room for this task so that you can avoid future overruns.
  
  

• Who was involved in those tasks?
  
  If task times exceed averages, you want to dig deeper into the WHO. Who was assigned to the work, and why did the task take them longer?

If the employee is new, the problem could be short-term and resolved without manager's intervention. On the other hand, if the employee is more seasoned, managers may want to check in with the employee to determine if they encountered unusual hiccups or need more training.

You should perform this analysis — comparing budgeted hours to actual hours and measuring write-offs — after every project (more on this below) and troubleshoot on a case-by-case basis.

There may be cases where issues stem from poor scheduling, and you can adjust templates as a quick, agency-wide solution, but it’ll often come down to the WHO. Managers will need to determine those solutions with employees individually.

6. Review vendor performance to improve sourcing decisions

Now, let's shift our attention to external resources.

It’s common for agencies to outsource work when they require a complementary service to fulfill client requests or simply need an extra hand.

While agencies may pay less attention here, selecting the first vendor who replies or the vendors with the lowest bids, they should pay as close attention to external resources as they do internal ones to ensure they’re using budgets effectively and seeing the most ROI from work.

Managers should periodically review vendor reliability by assessing:

• Accuracy: Do invoices typically match quotes, or do vendors invoice for more than initially stated?
  
  

• Responsiveness: Are vendors quick to respond, or are requests typically waiting for days? Do vendors provide updates along the way?
  
  

• Timeliness: Do vendors complete work by the deadline, or are they consistently running late?

These questions let you weed out vendors that cost you more than anticipated or hold up projects with late replies or missed deadlines. Then, you can narrow in on preferred vendors and determine which vendors you need to replace.

When filling gaps, you want to think about those above points — in addition to comparing rates — to have proactive conversations with vendors, get everyone on the same page, and devise more detailed work orders or contracts to avoid issues.

Pro tip: Some agencies benefit from finding an “all-in-one” vendor who can fulfill multiple service areas, as they can easily schedule the resources they require across various project types. This prevents them from bringing multiple outside groups into projects (and the time of sourcing numerous vendors). It can even simplify invoicing.

7. Prioritize high-margin projects (especially when you have fewer available resources)

As mentioned, resource management and optimization directly relate to how well you manage projects. Another way you can optimize resource usage is by prioritizing high-margin projects and scheduling resources for the projects that bring the most ROI.

Shifting project schedules and resource assignments to prioritize projects is primarily done on a case-by-case basis. A few pointers:

• Look at projects that don’t have a strict timeline to shift around first. Internal projects usually fall into this bucket, but you may have client work with looser deadlines.
  
  

• Consider swapping resources. Say you have a senior designer on a lesser-priority project and available junior designers who could step in. You could move your senior designer to the high-margin project and slot in more junior designers for the lower-profit work.
  
  

• Remember that passing on lower profit work or loss leaders is okay. While many agencies, even more so new agencies establishing a client base, may feel obligated to be yes-men and take on every new project request (in other words, overextend themselves and take on more work than they can realistically manage), it more often than not results in disappointed clients and employee burnout.
  
  

8. Review projects after they wrap to identify wins & losses

Circling back to our points in #5, reviewing projects that run beyond budgets or timelines helps troubleshoot issues that hurt profitability, but you should also review every project at wrap to uncover the wins and losses.

So, not only can you troubleshoot issues for future projects, but you can identify opportunities to leverage and build upon wins.

We suggest making this practice part of the typical workflow so projects don’t slip through the cracks or managers don't allow too much time between reviews. It could even be helpful to assign a dedicated manager to this responsibility.

In addition, you should schedule quarterly or annual reviews to discuss overall project success and brainstorm the main themes from individual project reviews. This is where you could address broader, organization-level issues that impact project profitability and resource optimization.

For example, if you notice a particular service requires a lot of resources but doesn’t bring substantial profits (or have a longer-term benefit, like hooking recurring clients), you could discuss this with other managers or administrators and decide whether to keep or cut the offering.

9. Monitor the proper utilization metrics

While on the topic of reporting, let’s review the best metrics to hone in on:

Overall utilization

In other words, what does your staff currently have allocated to them (now and in the following weeks)? What percentage of their time is utilized, and how many available hours remain?

Note that the Workamajig staff scheduling dashboard provides these metrics so you don't have to calculate them yourself.

Time productivity (billable vs. non-billable hours)

You should gauge productivity by role, considering employee skillsets and billing rates, to devise utilization goals and improve resource allocation.

Pro Tip: Non-billable does not equal unproductive or not valuable. Non-billable tasks can include development opportunities, training, or events, all of which create long-term value for employees. When measuring productivity and shifting resources, you should always consider tasks' short- and long-term value.

Utilization and realization rates (budgeted hours vs. actual hours)

Utilization and realization rates measure allocation efficiency.

Utilization is the difference between billable hours employees are scheduled for based on their budgeted hours. Realization compares planned resource allocations to actual logged hours.

Resource Cost Variance

Finally, an extension of the above, resource cost variance compares the budgeted cost of resources to the actual cost incurred during project execution.

Resource turnover rates

Another metric to monitor is resource turnover rates. High turnover rates can indicate employee dissatisfaction and create more work for managers, who must adjust and readjust project schedules as employees come and go.

10. Use new software technologies to your advantage

We briefly introduced this in #3 above and have mentioned how Workamajig assists at each step. Still, it’s important to reiterate that following these best practices or using resources effectively is nearly impossible without the right tools to assist.

Most project management tools with native time tracking include the tools and reports agencies need to analyze and optimize resource utilization. However, a separate software category has emerged in the last decade (give or take), expanding on basic project management functionalities and combining all of the tools agencies require to manage operations — agency management software.

Workamajig is an all-in-one agency management solution that combines:

• Project management software — including project intake tools, templates, task management, project planning, and real-time project monitoring (with alerts).
  
  

• Resource management — including resource planning tools, native time tracking, and time productivity reports.
  
  

• Vendor management — to review past requests and bids, compare estimates and work orders to final invoices, and gauge responsiveness and timeliness.
  
  

• Financial management — including automated estimating, budget tracking, notifications about at-risk projects, and a financial reporting dashboard.
  
  

• Accounting software — to support all standard accounting processes and replace tools like QuickBooks and Xero so agencies can manage finances in the project workflow.
  
  

• CRM — to manage your sales pipeline and improve new client acquisition. It includes user-friendly Kanban boards to manage opportunities to close and an array of performance reports to measure closed rates and identify the reasons behind lost opportunities.
  
  

• User-friendly collaboration tools (for internal and external users) — so project teams can easily share files, join feedback discussions, track changes, compare file versions, and view the entire version history.
  
  

• Flexible automation to streamline administrative tasks, like invoicing, and free up more time for billable work.
  
  

Our goal is to provide a unified solution so that enables teams to:

• Bring all project stakeholders into one hub to improve collaboration and transparency.
  
  

• Manage people, projects, and finances in real-time to proactively monitor progress and adjust course, rather than waiting until completion to assess profitability and success.
  
  

• Condense tech stacks and reduce redundant operational costs.
  
  

All of these aspects promote team efficiency, successful project management, and agency profitability.

Our solution includes one-on-one onboarding and training — and a dedicated account manager — so our team can configure each instance of Workamajig according to individual client requirements and show users the best ways to use our system.

Then, account managers are always available to answer questions, assist with training, or adjust Workamajig settings to better suit your needs.

This approach promotes faster software adoption, prevents failure to launch, and allows clients to reap all the benefits Workamajig has to offer.

You can read more about Workamajig and other top-rated agency management tools in our guide or contact our team for a personalized demo.

FAQs on Resource Optimization in Project Management

What are the most common resource optimization techniques?

Some common techniques include:

• Resource leveling: This is when managers shift project start and final delivery dates to accommodate required resources and their availability. This typically works for projects with looser due dates or low-priority projects.
  
  

• Resource smoothing: This is when managers monitor and redistribute resources on the fly to keep projects within budget. This method is preferred when projects have firmer deadlines or fixed budgets, and managers must oversee resources to avoid exceeding original estimates or affecting the critical path.
  
  

You can read more about resource leveling vs. resource smoothing here.

• Reverse resource allocation: This is typically reserved for highly technical or complex projects with tight due dates that require niche resources to assist with specific project phases. Managers allocate resources to the most complex or critical tasks first, then work backwards through the project schedule. This helps managers ensure they’ve outsourced all resources necessary and covered each task before projects kick off and enter the first phase.
  
  

• Modeling & Simulation: This is when project managers create a model of a project team or workflow (templates work here, too) to simulate and analyze different scenarios and then optimize creative resource allocation based on factors like availability, skills, and budget.
  
  

• Critical Path Method (CPM): Project managers map the sequence of essential tasks and dependencies to identify the critical path (the longest sequence of dependent activities) and determine the minimum project duration and timeline. This helps focus on the most complex tasks, considering resources and constraints, to keep projects on schedule and avoid delays.
  
  

What are the primary benefits of resource optimization?

There are countless benefits to improving resource optimization strategies, including:

• Improved cost savings and increased agency profits

• More successful project outcomes and enhanced ROI

• Happier, balanced, and successful (more efficient and productive) employees

• Clear structure and better organization during project workflows

• Increased transparency in project monitoring

• Faster growth and scalability

• The insights and ability to make more strategic project planning and resource scheduling decisions
  
  

What are the primary challenges to anticipate?

Here are the primary obstacles teams experience when analyzing and optimizing resource utilization:

• First, this is a complex task that requires multiple heads of brainstorming. This isn’t a task for a single project manager or department lead. You should get all the decision-makers involved in a team-wide meeting to discuss the issues impacting agency success and the goals of investigating resource utilization.
  
  

• Then, you will always have competing priorities, and finding the right balance is an ongoing process. Almost all agencies have multiple goals they’re balancing or projects in the queue, so managers must collaborate about where to expend resources and the best ways to prioritize projects. We mentioned prioritizing high-margin work above, but you should also consider the long-term value of lower-profit projects or non-billable work when determining where to slot them in.
  
  

• In addition, you will often run into resource constraints. No agency has an unlimited budget or plethora of backup staff, so you need to understand your available resources (#1 above), determine where to use them best (#2 above), and know where you’ll need to fill gaps (#1, #2, and #6 above).
  
  

• Many projects also have complex resource dependencies or interdependencies, where the optimal allocation of one resource can impact the performance or availability of others. This is another ongoing challenge that can lead to project bottlenecks and missed deadlines, ultimately impede your agency’s overall performance, and hurt client satisfaction. Proactive project management and shifting resource assignments can help avoid these issues and stick to project plans.
  
  

• Of course, change is another unavoidable (extremely common) issue that can throw projects off course. No project follows the exact templated outline; some tweaking is always involved in finalizing project plans. Then, managers often battle with out-of-scope requests and scope creep after kickoff. Having a strategic, solutions-oriented project manager in the driver's seat helps here, but we also suggest implementing a change management plan, so your teams can incorporate out-of-scope requests as they arise — and prevent them from pushing projects beyond agreed-upon budgets.
  
  

Lastly, agencies face challenges when they lack the best software tools to support their initiatives and operations.

Manual methods and spreadsheets can only get you so far; if you’ve reached the stage where you’re researching strategies to improve resource utilization, it’s safe to assume you’re ready to upgrade to a more advanced solution to assist in managing resources and agency operations.

How Workamajig Supports Agency Resource Optimization

Workamajig is developed to support our best practices and centralize all the software agencies required to oversee their operations. Our resource management module enables you to effectively optimize resource utilization and improve on-the-fly decision-making with tools to:

• Understand available resources

• Plan resources proactively

• Monitor real-time usage and reallocate resources to keep projects within budgets and on course

• Track employee hours and real-time labor costs

• Review resource utilization metrics and compare utilization vs. realization rates
  
  

Our team can walk you through the ins and outs of Workamajig in more detail, showing you our resource management module and the tools to support your initiatives. We’ll set up Workamajig to your specifications and then show you how to improve and manage processes with our system’s toolset.

You can learn more about Workamajig by requesting a free demo with our team.

Additionally, you can watch a brief introduction to our platform below:

Related reads:

• Creative Resource Management for Agencies: Software + FAQs
• Creative Workflow Management: Best Practices + Software Tools
• Best Agency Time Tracking Software for Creatives