Resource Allocation 101: How Are Resources Allocated

Author: Karolina Matyska

Effectively using the art of resource allocation is, without a doubt, a game of strategy. I could even say it is almost like playing chess. There is human capital to manage, financial resources, technological assets, and perhaps the most valuable resource of all: time. How to manage it all?

Looking for an effortless, smart and secure time tracking app to streamline resource allocation?

What is resource allocation? Definition

Resource allocation is the strategic and intentional distribution of available resources to achieve a specific goal while maximizing productivity and efficiency. This strategic operation involves financial capital, human resources, time, technology, and expertise.

What is more challenging about the resource allocation process is the decision-making involved: where to invest all the resources, how or when.

Utilizing a resource allocation tool can significantly aid in this process by providing clear visibility of resources, advanced filtering capabilities, and supporting easy assignment based on project priorities and skill alignment.

resource allocation

What counts as resources?

  • Financial capital – money and other financial assets that an organization has at its disposal. Allocating financial capital involves project budgeting, investing, and managing expenses.
  • Human resources – the people within an organization constitute a valuable resource. Resource allocation in this context includes assigning employees to specific tasks, multiple projects, or departments, according to their skills and expertise.
  • Knowledge, skills, and expertise – intellectual assets, such as knowledge and expertise, are crucial resources. Allocating these resources involves identifying key team members, fostering a culture of continuous learning, and leveraging expertise where it is most needed.
  • Technological resources and infrastructures – tools, technologies, and physical infrastructure available, that may require investments, maintenance, and/or upgrades.
  • Time –  unfortunately, time is a finite resource, and how it is allocated is the definite factor that can significantly impact productivity and the outcome of the project or future of the organization. Effective time management involves proper time allocation and prioritizing tasks and activities to achieve goals efficiently.

Who is responsible for resource allocation? Project managers?

Responsibility for the resource allocation process varies depending on the size and structure of the organization.

The most relevant stakeholders typically include executives, resource managers, department heads, the organization’s financial department, project managers, and human resources.

In fact, to effectively allocate resources, you need to collaborate.

Read also: Project managers’ roles and responsibilities

benefits of resource allocation

Key benefits of effective resource allocation

The benefits of resource allocation are varied, but they all contribute to the short and long-term goals of the organization. Let’s take a closer look:

  • Improved decision-making. Data-driven resource allocation strategy facilitates informed decision-making and allows teams to anticipate possible challenges and identify opportunities. Organizations can better anticipate and mitigate potential project risks by allocating resources strategically.
  • More efficient operations. Efficient resource allocation helps identify unnecessary spending and reallocates resources to areas that need more, resulting in cost savings and improving business efficiency.
  • Enhanced overall satisfaction. Properly allocated resources involve placing employees in roles that align with their skills and interests, increasing job satisfaction. Investing in their skills fosters retention.
  • Accomplished strategic roles. Resources are directed toward activities that align with strategic objectives, ensuring that the organization is moving collectively in the right direction.
  • Enhanced focus on what’s needed. Well-placed resource allocation enables organizations to concentrate on core competencies.
  • Adaptation to possible change. Efficient resource allocation allows organizations to adapt more effectively to changing market conditions, technological advancements, and unforeseen challenges.
  • Stabilized finances. If the investments align with strategic priorities, resource allocation will minimize the financial risks and promote sustainable growth.
  • Improved competitive advantage – allocating resources to research and development encourages innovation, giving organizations a competitive edge in their market.

You might be interested in How to be more efficient.

resource allocation methods

Resource allocation methods

These are the most common resource allocation methods that are taught in most of the top-rated PMP certifications.

Critical Path Method (CPM)

Within project management, the critical path represents the most extended sequence of interdependent tasks.

The Critical Path Method (CPM) establishes a clear and sequential order for completing tasks before the project starts, optimizing resource use. However, this method only accommodates multitasking.

Earned Value Management (EVM)

Earned value management integrates cost, schedule, and scope to track progress.

By comparing the value of completed work against the planned budget and schedule, EVM helps identify any deviations from the original resource plan.

Resource leveling

When implementing resource leveling, assess your team’s capacity to determine their workload capacity. Compare this with the demand for resources.

If scarce resources and demand are not aligned, reschedule tasks accordingly.

Resource smoothing

Resource smoothing is a method that intends to minimize demand while ensuring the project is completed within the optimal timeframe.

In this approach, the project manager modifies resource scheduling and allocation according to needs and skills.

what is resource allocation

How to allocate project resources

Managing resource distribution, budget constraints, task dependencies, and project timelines is a crucial aspect of project management. The project manager’s main goal is to make sure that the right resources are assigned to tasks and activities in a way that optimizes the efficiency of upcoming projects and client satisfaction.

Let’s explore how to allocate project resources step by step and create a project plan that takes into consideration project requirements, resource dependencies, and team morale.

1. Start by defining the project scope and project objectives

Clearly articulate the scope and the goals of the project. Clearly define project requirements, project timeline, and quality standards that need to be achieved.

2. Identify what resources are needed

To execute a specific project effectively, it’s essential to identify the required resources. This includes determining the necessary team members, equipment, technology, materials, and other assets.

By carefully assessing these needs, project managers can optimize resource allocation and ensure efficient utilization throughout the project lifecycle, enhancing overall productivity and preventing potential bottlenecks.

3. Create a resource breakdown structure (RBS)

A Resource Breakdown Structure (RBS) is a detailed framework used to systematically categorize and organize all resources required for a project.

By breaking down resources into specific categories such as personnel, equipment, materials, and facilities, it enables project and resource managers to meticulously plan, allocate, and monitor resources.

4. Estimate resource availability

Assess the availability of existing resources, both in terms of quantity and quality. Consider the availability of team members, external contractors, and any additional resources needed for the project.

The resource manager must evaluate available resources to determine if they can meet the project’s demands or if there is a need to secure additional resources.

Ensure that the same resources are not over-committed across multiple projects, which can lead to bottlenecks and delays. By accurately estimating available resources, the resource manager can maintain a balanced distribution of resources, ensuring smooth progress throughout the project lifecycle.

5. Establish priorities and allocate resources accordingly

Prioritize project tasks based on their importance, dependencies, and path. Identify tasks that are time-sensitive or significantly impact the project’s success and match the identified resources with the requirements of each task.

6. Estimate resource availability

Consider constraints such as budget limitations, skill shortages, or equipment availability that may impact project progress. These constraints can lead to resource allocation problems, especially with other projects in play.

Resource managers must make strategic allocation decisions to prioritize resources effectively. Addressing these constraints early ensures smoother operations and enhances project success.

7. Make use of resource allocation tools

Explore project management tools that facilitate resource planning and allocation. These resource management tools can help visualize resource availability, manage resources and analyze workload, and ensure that resources are distributed efficiently.

8. Monitor resource use and workloads

Continuously monitor and track the use of the resources throughout the project’s path and the distribution of tasks and resources in a way that balances workloads among team members.

Avoid overloading individuals with too many tasks or allocating resources unevenly.

Read also: What is project monitoring?

9. Be flexible to changes 

While too many changes in project scope and project timelines are not recommended, flexibility is still required if the need arises. Reassess resource needs and make adjustments as necessary.

10. Guarantee clear communication from beginning to end

Communicate resource allocations to the project team. Ensure that everyone understands their roles and responsibilities, including the assigned tasks and the expected timelines.

By clear communication, I also mean regular reviews of the decisions made. Analyze project performance, identify areas for improvement, and improve resource management.

how to manage project resources

Resource allocation tools

Let’s explore some resource allocation tools that project managers can use when planning the organization of resources.

Gantt charts

Gantt charts offer a straightforward way to outline project tasks. This tool facilitates resource allocation in projects, by allowing resource managers to assign tasks, track time spent on each task, and precisely determine resource needs over the project duration.

Resource allocation matrix

A resource allocation matrix provides a comprehensive overview of the required project resources. It is a great method for proactively identifying potential blockages.

Typically, the matrix includes team members’ names, roles, availability, skills, and assigned tasks. It visualizes resources, aligning resources with project tasks and activities.

Workload charts

Workload charts visually depict resource allocation across project teams, departments, or the entire organization. They allow for a quick assessment of each person’s assigned hours.

Related article: Workload management plan

organisation resource allocation matrix

Resource allocation tips

Keep these key tips in mind to create a proper resource allocation strategy:

  • Identify and prioritize tasks based on importance and deadlines;
  • Adjust resource plans as project scopes and timelines evolve;
  • Avoid overloading or underutilizing team members;
  • Don’t forget to include budget, time, and other constraints when allocating resources.
  • Ensure clear communication with team members about resource management and expectations.
  • Monitor how resources are being utilized to make informed adjustments.

You might be interested in learning how to prioritize tasks.

Resource planning template and examples

For example, we’re using a resource allocation template to launch a digital marketing campaign. It’s important to allocate human resources, budget, and tasks across the different campaign phases.

This is the information you must include, adapting it to the template or tool you prefer:

Project information

  • Project name: Digital Marketing Campaign Launch
  • Project manager: [Name]
  • Start date: [Start Date]
  • End date: [End Date]

Resource types

Human resources

  • Name:
  • Role: Digital Marketing Specialist
  • Skills:
  • Availability: 
  • Name: 
  • Role: Copywriter
  • Skills: 
  • Availability: 
  • Name: 
  • Role: Designer
  • Skills: 
  • Availability: 


  • Type: Ad Campaign Budget
  • Quantity: 
  • Availability:


  • Total project budget: 100K €
  • Budget allocated for resources: 25K €

Read also: Project budget planning

Resource allocation timeline

Project phases

  1. Strategy development
  2. Content creation
  3. Design
  4. Campaign execution
  5. Performance monitoring
  6. Reporting


  • Strategy development
    • Start date: 8 January 2024
    • End date: 8 February 2024
    • Resource allocation:
  • Design
    • Start date: [Date]
    • End date: [Date]
    • Resource allocation:

Task allocation

  • Task 1: Social media strategy plan
    • Estimated duration: 
    • Assigned resources:
  • Task 2: Graphic design
    • Estimated duration: 
    • Assigned resources:

Monitoring and reporting

  • Tracking
    • Time tracking tool: Timeular
    • Performance analytics: Google Analytics
    • Regular team meetings: Every two weeks
  • Reporting frequency
    • Weekly progress reports
    • Post-campaign performance report

How to make a project report

  • Contingency plans
  • Risk identification
    • Potential risks: Ad spending exceeding budget

It might be useful: Free time management and allocation templates

the challenges of resource allocation

The challenges of resource allocation

While the practice is a cornerstone of project management and task organization, resource allocation still presents several challenges. Anticipating, preventing, or even avoiding them is key. Let’s explore some examples: 

  • Limited resources – the fundamental challenge is the lack of resources. Projects often have to contend with time, budget, skilled personnel, and materials constraints.
  • Changes in project scope – project scopes may evolve due to various factors, such as shifting priorities or changes in client requirements. Issues can also happen when the project’s timeline is constantly being changed.
  • Poor communication – insufficient communication between the project team and stakeholders can result in misunderstandings of resource needs and availability.
  • Mismatched skills and tasks – mismatches between the skills needed and the skills available within the team can lead to inefficiencies and project delays.
  • Technology constraints – outdated or insufficient project management tools and technology can stop resource allocation. 
  • Being resistant to change – resistance from team members or stakeholders to changes in resource allocation plans can delay the process.

Overcoming these challenges requires a strategic approach, effective communication, and continuous monitoring. A project manager’s work is never done.

How to allocate resources effectively with Timeular

allocation resources tool – Timeular

Time tracking plays a crucial role in effective resource allocation by providing valuable insights into how time is spent on various tasks and projects. Using Timeular as a time-tracking tool means having a major ally in allocating resources efficiently.

How does it work?

  • First, real-time time tracking allows project managers to monitor resource usage continuously. It generates data on the actual time spent on tasks. This data serves as a reliable foundation for making informed resource allocation decisions. Also, by tracking the time spent on different activities, you can identify which tasks require more resources or where additional support may be needed. 
  • Using a time-tracking tool will also be useful in balancing workloads, by revealing how much time each team member is spending on specific tasks. This information ensures that work is distributed evenly, providing the opportunity for reassessment of project priorities, if needed.
  • Time tracking can highlight obstacles, prompting adjustments to the whole resource allocation plan and strategy. This data can also be stored and be an important guide for future projects, for better time estimations and their respective resource allocation strategies.
Looking for an effortless, smart and secure time tracking app to streamline resource allocation?


Resource allocation is not a one-time task at the start of your project’s lifecycle. It’s an ongoing project management process that involves many variables.

Adaptability and flexibility are fundamental because an effective allocation strategy involves navigating human capital, financial resources, technology, and, perhaps most crucially, time.

It demands a delicate balance between short-term objectives and a long-term vision for project success, all while confronting the daily challenges that teams inevitably face working on a project. Being successful at it is what project managers should keep working for.


How to allocate resources efficiently

To allocate resources efficiently, start by identifying the most important tasks. Use specific data on your team member’s skills and workload to match the right people with the right jobs, ensuring effective project management.

What is a resource allocation graph?

A resource allocation graph is a visual tool that portrays the relationship between processes and the resources they require, offering a graphical representation of resource allocation.

What does the allocation of resources mean in economics?

In economics, resource allocation refers to the process of distributing limited resources among various competing uses. This concept originates from the economic problem of scarcity or absence of means, recognizing that resources such as time, money, and raw materials are finite, while human wants never end.

What is resource management software?

Resource management software helps you organize and track all your team’s tasks and work. It’s a tool that makes it easy for you to see who is doing what and ensures everyone is working on the right things at the right time.
Timeular is an example of a project time tracking tool, that helps to create a project schedule, assign tasks, and work on a resource allocation plan based on resource data.