At service firms of any size, the efficiency of your team has a large influence on your profitability. Large teams are capable of producing big profits, but they can also be more susceptible to costly inefficiencies.

That’s one reason why capacity planning for large teams is essential. Capacity planning is the art of matching your supply of resources to the demand you have from customers or clients. By successfully balancing your capacity with demand, you'll be able to reduce bench time for your team or mitigate your staff becoming over-resourced to meet ambitious deadlines.

Long-term capacity planning

Communication is key to creating any good plan. When you're planning long-term capacity for your team, especially while chasing company growth targets, it pays to know what is in the sales pipeline so that you can match it to your resource pool and existing project pipeline.

So, long-term capacity planning is helped by actively communicating with your sales team. Clear communication with your sales team will help with long-term capacity needs as well as help the sales team understand when they can promise project deliveries.

Weekly meetings with project managers and the sales team can provide a roadmap for your resourcing that will enable you to fulfil project expectations that match the volume that is coming through the pipeline.

To ensure your teams are going to have the right resourcing to fulfil your long-term growth goals, you need clear mechanisms to show who's resourced where and how often.

If you're a company that's still running spreadsheets to manage the project pipeline, to account for the extra headcount needed to fulfil the work obligations of growth, you want to consider a platform that handles capacity planning, such as Projectworks.

With clear communication between the sales and project teams and a tool that accurately shows who is going where you can plan capacity for the long term and know in advance what work you can take on and where you're going to need new resources.

Something to consider that adds a huge amount of value to long-term capacity planning is the ability of your resourcing to contribute automatically to other key reports that benefit the business, without having to export or double-handle any data.

Projectworks can do this. When you enter planned work into the resourcing screen, the data automatically fills utilisation reports to give estimations of utilisation rates before the team hands in their timesheets.

Another benefit that Projectworks offers is the ability to use shadow resourcing to pencil in the hours that need to be worked before you assign someone to the job.

The great thing about shadow resourcing is that once you have hired or identified someone with capacity, you can simply swap the shadow resource out for a real person.

Short-term capacity planning

Short-term capacity planning deals with immediate capacity issues facing your firm, anywhere from the next few days to the next six months. Often these issues can be fixed by reshuffling resources or bringing in an external contractor in the short term.

For example, if there are workforce gaps leading to project delays, you will need to quickly address them to ensure you don’t disappoint your clients. This can include training or upskilling current staff, offering entry-level internships to support skilled staff, or identifying a specialised contractor with a good reputation on standby to fill in at short notice.

Another important element of capacity planning is managing unscheduled absences. A crucial staff member becoming unavailable at a key stage of a project can derail progress and even cause knock-on delays in other pieces of work.

Aim to streamline the way staff work to create efficiencies, either with technology or better systems that increase productivity.

Comparing long-term and short-term capacity planning

Plainly, the goals of long-term and short-term capacity are the same.

One key difference between short-term and long-term capacity planning strategies is the scale. Neither is less significant than the other and at the time, can seem like big problems if they occur during high-pressure moments in a project.

Another difference is that long-term capacity planning looks at the overall company growth trajectory, which can include significant changes to your firm's structure. Geographical expansion, professional diversification, and technological advancements can all be taken into account, requiring more elaborate, tactical steps.

It’s important to consider both long-term and short-term capacity plans when making resourcing decisions. For example, if you’re consistently using a short-term resourcing solution to make up for a shortfall, it may be that you need to consider more long-term options such as making a full-time hire or restructuring your staff to better cater for business needs.

Read more: Resource Planning Strategies For Large Projects — Projectworks

Read more: Resource Overallocation: Ways You Can Avoid It Effectively — Projectworks

Using tools for capacity planning

As with many other workforce management strategies, capacity planning is made much easier with specialised technology. Capacity planning tools such as Projectworks have been specifically designed to provide data-driven insights to assist decision-making. Visibility is one of the big capacity management challenges, which is where technology comes into its own.

For example, you can see future utilisation to help with planning and individual project resource allocations.

You can also assess historical resource utilisation rates to see exactly how close to capacity your people are operating. This helps to recognise when staff are under pressure and need relief, or when it’s time to start implementing utilisation targets to motivate your staff to meet your firm's requirements for billable time.

Capacity planning tools can also create skills databases across your entire organisation, helping project managers allocate tasks based on expertise and availability. This helps to deal with last-minute changes to projects, where you can identify the best person for a job at short notice.

Capacity planning leads to better client and employee satisfaction

One of the big problems with large teams is the complexity of processes and difficulties working across different departments and teams. This is often the biggest opportunity to improve your profitability, where you can greatly increase your capacity by creating efficiencies.

Having more people means individuals can get lost in the noise, making it harder to recognise and prevent burnout.

Capacity planning, both in the long-term and short-term, helps to improve all aspects of your resourcing and therefore increases your profit margin and most accurately satisfies customer demand.