resource allocation

What is Resource Allocation? Key Tips For Project Management

Table of Contents

Resource allocation is the process of assigning available resources to activities or projects. Resources can include physical or material resources such as money, equipment, and raw materials, as well as intangible resources such as time and personnel. Resource allocation determines how these resources will be distributed, used, and managed to meet a specific objective.

Ideally, throughout the resource allocation process, you’ll be doing a few different things to ensure consistency:

1. Analyzing the problem: Identify the problem that needs resources and the type and amount of resources required to tackle it. This could be staffing a client project, generating year-end reports, or creating a new in-house creative team.

2. What’s the budget: Estimate the cost of the resources you need and decide which resources to prioritize. Resources are typically limited by time and cost, so it is critical to set a budget.

3. Assess need versus cost: Consider how much the resources needed will cost, and the value they will provide.

4. Allocate resources: Based on your budget and assessment, decide how best to use the resources to accomplish the task. Use a project management system or resource management software to help.

5. Monitor usage: Track how the resources are used and if they are meeting the goals set out in the budget.

6. Evaluate results: After using the resources, evaluate if the goals were met and what could be done better next time.

In this blog post, we will discuss how resource allocation fits within the scope of project management, explore its usefulness, discuss common problems when allocating resources, and offer tips on how to best allocate your resources.

Try Hive - Goals

How resource allocation fits within project management

Project management is the process of planning, organizing, and executing a project from start to finish. It includes setting goals, establishing timelines, and assigning tasks. Resource allocation is a key component of project management, ensuring the necessary resources are available and used efficiently.

Resource allocation is a complex task that lives under the project management umbrella. They should not exist alone, as the project manager should use all resources needed to complete a project.

Resource allocation involves identifying the required resources and determining how those resources will be used within a project schedule. In addition, resource allocation must consider the availability of resources and any potential conflicts that may arise between different projects competing for scarce resources.

Methods of resource allocation

There are several methods of resource allocation, each with its advantages and disadvantages. The most common methods are top-down and bottom-up allocation.

Top-down allocation

This is when the project manager assigns tasks to resources without considering the availability of those resources. This method is often used in projects with tight deadlines or when the required resources are not yet known. The advantage of this method is that it is quick and easy to implement. The disadvantage is that it can lead to problems if the required resources are unavailable, as the project manager may have to reassign tasks or find new resources.

Bottom-up allocation

This is when the project manager starts by identifying the required resources and then assigning tasks to those resources based on their availability. This method is more time-consuming than top-down allocation but ensures that all tasks are assigned to available resources. The disadvantage of this method is that it can be challenging to estimate the resources necessary for a project, especially if the project is large or complex.

Common Problems with Resource Allocation

Several common problems can occur when allocating resources to a project. One problem is over-allocation, which occurs when too many resources are assigned to a task or phase of the project. This can lead to delayed tasks, missed deadlines, and increased costs.

Another problem is under-allocation, which occurs when not enough resources are assigned to a task or phase of the project. This can lead to poor quality work, employee burnout, and delays in project completion.

Finally, another common problem is mismatched allocation, which occurs when the wrong type of resources are assigned to a task or phase of the project. An example of this would be to assign a task to a team member who had no skill to complete the project but is the only one available with time to do work. Often this type of allocation results in poor quality work, delays, and increased costs.

6 Tips for allocating resources in your next project

Here are several tips that can help you allocate resources more effectively, and we will go over each of them in detail below:

1. Create a resource plan

Creating a resource plan is the first and most important step in effective resource allocation. The resource plan should include all the project’s required resources and availability. This will help to ensure that all tasks are assigned to available resources and that there are no conflicts between different projects and the people working on them.

2. Rely on the bottom-up method

Relying on the bottom-up method is another effective way to allocate resources within your project management process. This method involves identifying required resources and then assigning tasks to those resources based on their availability. This ensures that all tasks are assigned to available resources and can help to avoid over-allocation or under-allocation problems.

3. Use a resource leveling technique

Using a resource leveling technique is another way to allocate resources effectively within your project management process. This technique helps even out the workload for each team member by reassigning tasks based on availability. This can help to avoid over-allocation or under-allocation problems and can also help to improve the quality of work.

4. Manage changes to the project schedule

Another important tip for allocating resources within your project management process is managing project schedule changes. This includes ensuring all changes are communicated to the team and that new tasks are assigned to available resources. Changes to the project schedule can often lead to problems with resource allocation, so it is important to be proactive in managing them.

5. Communicate with your team

This tip runs hand in hand with managing changes to the project schedule. If you make any changes, you must communicate those changes to your team. Also, even if everything is going great and on track, keeping communication open and flowing between departments will help avoid potential problems or bottlenecks, and will help you manage workloads as you progress throughout the project. 

6. Invest in software to help the process

Using project management systems or resource management tools to help with resource allocation are great ways to make this process more efficient. Let’s take Hive as an example. Using a project management platform like Hive, your team will have equal access to a centralized location for all project information.

The Hive platform lets users filter any of its 5 views to see a project’s list of available resources, employee skills, and user time availability. This software will also allow you to assign tasks to specific resources and track the progress of those tasks. With Hive, you can allocate resources more effectively, avoid over-allocation or under-allocation problems, and improve the overall quality of your project work.


Project managers must strategically allocate resources because they can make or break a project. So, do not underestimate the importance of resource allocation. It may seem daunting, but with proper planning and execution, it can be done efficiently and effectively.

Want to spread the word?
Share on social

Get started with Hive

Test Hive out with a 2 week free trial.