How Resource Analysis Can Optimize Your Next HR Project
The term resource analysis can throw even the most experienced HR professional off their guard, but it’s really not as complicated as it sounds.
Let’s say you are tasked with a new project that has a set of deliverables – such as developing training and development programs, managing workplace operations or optimizing virtual onboarding for dispersed teams. Through the process of resource analysis, you will be able to identify and evaluate all the resources that are available to you to achieve your objective.
Contents
What is resource analysis?
Why is resource analysis important in HR?
When to use resource analysis
How to conduct a resource analysis using the VRIO framework
Example of a resource analysis using the VRIO framework
What is resource analysis?
Picture the scenario. You are overseeing the development of an employer branding strategy at your organization. You will need to conduct internal research to understand how the organization is perceived by its current employees and external research.
This will help you to learn how the organization is positioned in relation to its competitors, develop an employee marketing strategy, align the employer brand with the overall company brand, develop training materials to ensure that employee and management practices support the employer brand, and assess and track the success of the strategy.
That’s a lot of work.
Resource analysis can help you to optimize resources to deliver the best results, identify areas of improvement, and hire the right people where necessary to ensure that any project can be delivered. Also known as people analytics, it’s the collection and application of talent data to improve critical talent and business outcomes. It enables HR professionals to develop data-driven insights to inform talent decisions, improve workforce processes and promote positive employee experience.
Why is resource analysis important in HR?
In project management terms, a resource analysis is an essential tool to use for making better decisions. It’s the process of planning, scheduling, and allocating organizational and project resources in the best possible way.
From the beginning stages of your HR project right up to the end, resource analysis ensures the utmost efficiency of resources use along the way. It helps you plan your project rigorously, measure progress and keep track of performance. It can also help you plan ahead and schedule activities more effectively.
Resource analysis is integral to effective project management for a number of reasons:
- Eliminate the danger of over- and under-booking: To plan your HR project and get the best results, you must manage resource workloads to avoid employee underutilization and overbooking. Maximizing resource efficiency will help to avoid unnecessary delays.
- Forecast resource availability: Forecasts help you and your team determine whether or not project activities can be completed based on the number of resources available and the timeframe in which they will be needed. It also allows you to use fewer resources more efficiently.
- Avoid miscommunications: Resource analysis keeps project planning more transparent and helps you spot problems early on, allowing you to sort them out with time to spare.
- Keep track of project performance: By having the ability to track capacity and availability, you can keep track of progress, spot project problems early on, and make adjustments when unforeseen resource needs arise.
- Maximize resource efficiency: Knowing the availability of your team is key to managing their workload to achieve maximum resource efficiency and productivity.
When to use resource analysis
Before you embark on a project, a resource analysis will help you make sure that you have the required resources, and also use them intelligently and efficiently. Conducting a resource analysis will help you establish what resources are crucial for the success of your project, and where you may need more focus, investment, and improvement. Crucially, it’s a process that can help remove obstacles to successful completion of the project – such as running out of skills, funding or time.
Resource analysis can guarantee that you’ll not only have the right resources to achieve your objectives, but you have the right resources that will take your projects to the next level. All while minimizing potential scheduling conflicts, project bottlenecks, and the ill effects of resource over- and under-utilization.
A resource-based view analysis gives you a chance to look into those things before you start, which will make your project better from the beginning and save a lot of headaches down the line.
Building a project view based on resource analysis is useful in a number of scenarios.
- When you have to optimize inhouse resources
If you are planning a new project, you need to see what resources you have available, how you can use them, and what you can do to achieve maximum efficiency with what you have available so that you can avoid the expense of unnecessary hiring or outsourcing. - When you want to identify challenges upfront
From minor inconveniences to project failure can refer to any number of common issues that range from minor inconveniences to full-blown catastrophes, any number of issues can derail your project if resources aren’t available when you need them. For example, if you are planning a new virtual strategy involving peer-to-peer interaction for knowledge sharing and half of your ‘onboarding buddies’ are committed to another project, that needs to be dealt with before it becomes an issue. - When you want to make the right hiring moves
If you’re considering scaling your team, you first need to do a resource analysis so that you don’t make decisions you may come to regret. A resource gap analysis will ensure that you know exactly what human resources you need where.
How to conduct a resource analysis using the VRIO framework
American management professor Jay B. Barney developed the VRIO framework, a strategic tool that helps organizations identify and evaluate internal company resources and make the most of them.
VRIO is an acronym for:
- Valuable – A resource is valuable if it allows your company leverage opportunities or negate threats in your sector.
- Rare – A resource is rare if it is not widely owned by competitors.
- Inimitable – A resource is inimitable and if it is not easy for another firm to acquire or substitute it with something else.
- Organization – The company must have the capability to exploit the resource.
When asked what makes their company outperforms competitors, the likely answer from most managers will be “our people”. But this not does not delve deep enough into what is especially valuable about their people.
In thinking about your own people, it’s important to ask more analytical questions. Why don’t competitors have similar people? What do you look for when hiring that enables the company to get the best talent. Why haven’t competitors poached your people? What is unique about your organization that brings out the best in your human resources?
These factors form the basis of VRIO and get to the core of why some internal resources are more valuable than others.
How to use the VRIO framework
A VRIO analysis will help you identify and leverage internal resources as part of your strategic HR project.
Although resource analysis may seem daunting, when done systematically, it becomes easier over time. Here’s what you need to know to start using it.
Step 1. Review your resource pool
Resource analysis is designed to give you in-depth insights into the resource capacity for your project. Begin by identifying the availability of your resources and who can work on your upcoming project.
Ensure that you don’t overbook people and make them do extra work. Remember to factor in days off, and vacations. This process will help you identify if specific resources are in short supply.
Step 2. Analyze resource workload and capacity
Workload capacity is based on both project needs and team member availability. ·Is someone getting overbooked and might have to work extra (which you want to avoid)? Remember to account for vacations, day-offs, and unforeseeable circumstances that may prevent someone from completing their work on the project. Think of how you will optimize or reorganize available resources in order to maximize them. Making use of a RACI chart will allow you to communicate roles and responsibilities to your resources and ensure everyone understands what they have to do.
RACI stands for:
- Responsible: Each task must have at least one responsible team member who does the work to complete the task.
- Accountable: This team member is in charge of delegating work and approving deliverables before they can be considered complete.
- Consulted: This team member will review each deliverable, putting it into context regarding the entire project.
- Informed: All team resources must be kept up to speed on the progress achieved through a general report that is frequently updated.
Simply, the RACI model allows you to assign tasks to each person on the team.
Step 3: Conduct an earned value analysis (EVA)
An Earned Value Analysis (EVA) is a tool to check the overall progress of your project. EVA can be defined as a method that allows the project manager to measure the amount of work actually performed on a project beyond the basic review of cost and schedule reports – it enables you to measure the project by progress achieved.
The EVA method also tracks effort and budget across the entire project, although it does not take into account the individual contributions. If the EVA method reveals that all is not on track, you can pause, analyze the problem and take steps to rectify it before the project becomes derailed.
Step 4: Use placeholders
When you don’t yet know who will be performing a task, create placeholders outlining the roles and responsibilities of the resources you need. Placeholders allow you to allocate tasks for specific roles and disciplines.
If these resources have to be acquired externally, include costs or fees, so you can see how they will impact your project budget.
Step 5: Conduct scenario planning
Scenario planning can help you prioritize project goals so unforeseen challenges can be overcome. It’s about identifying possible situations that could happen and having contingency plans in place if they do.
Recognizing that things don’t always work out as planned, and knowing how you will handle “what ifs” will allow you to determine the best course of action, given the project goals, resource constraints and financial considerations.
Example of a resource analysis using the VRIO framework
An employer brand is how everyone from customers to prospective employees to the public think about your organization.
To give you a good idea of how the VRIO framework can be used in practice, let’s take a look at a VRIO analysis for an employer branding project.
- Value: Google is the global market leader in organizing the world’s information and making it universally accessible. Its people are the primary link in the value chain and the company focuses on employees first as part of its employer branding. Studies show that 74% of employees are proud to be part of the Google brand while 84% of employees believe they work in a positive work environment.
- Rarity: No other companies are using data-based employee management as extensively as Google, which is why it attracts and retains the world’s best talent.
- Imitability: Google’s data-based human capital management is both costly and difficult to imitate, at least for the near future.
- Organization: Google is organized to capture value from this capability and HR uses the data to hire, promote, manage, and improve the performance of employees, ensuring that it maintains its reputation as an employer of choice.
Key takeaways
- Why resource analysis: Resource analysis helps you optimize resources to deliver the best results, identify areas of improvement, and hire the right people where necessary, ensuring that any project can be delivered.
- A holistic approach: From the beginning stages of your HR project to its conclusion, resource analysis ensures the utmost efficiency of resources use all the way.
- The VRIO framework: A VRIO analysis will help you identify and leverage internal resources as part of your strategic HR project.
- Get the right people on board: With a VRIO analysis, your organization can identify and evaluate internal company resources and make the most of them.
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