Over the past few years, market volatility has disrupted the global business scenario, and especially during the pandemic, business instability elevated. As a result, this restless economy led to higher levels of abrupt layoffs, unemployment, pay cuts, unplanned attrition, reduced profitability, etc.,
Today, as we enter the post-pandemic era, companies are still finding it challenging to retain and hire competent talents to meet current and future skill demands. Therefore, firms must implement proper resource capacity planning solutions amid market uncertainties to tackle workforce management challenges and sustain their businesses.
This article elucidates what resource capacity planning is and how it can help beat market volatility. So, let’s begin:
How can market volatility impact an organization?
Volatility refers to the level of fluctuation the market is currently experiencing. As a result, your company’s profitability, growth, and sustainability are at stake.
Here’s a rundown of how it can affect business operations.
1.1 Difficulty in finding new talent
A company that cannot cope with market volatility may face reduced profitability, decreased value of shares, capital losses, etc. They may also find it difficult to keep up with the growing demand for various skills and lose talented resources to other better-performing and stabler competitor firms. Thus, it may become difficult for such a firm to find new and competent employees.
1.2 Unplanned attritions
Failure to tackle market volatility may lead to a decline in profitability, influencing organizations to resort to extreme measures such as pay cuts for some resources. It may lower the existing employees’ morale, evoking a sense of insecurity about their future. As a result, they start looking for opportunities elsewhere and eventually leave the company once they get a better offer from a stabler enterprise, increasing unplanned attrition.
1.3 Increased hiring/firing cycles
In highly volatile times, firms often resort to abrupt layoffs as a cost-saving measure. While it helps them control costs temporarily, it affects their overall business sustainability. The reason is that once the situation improves, firms need to rehire similar-skilled resources by paying a high price. It thus results in wasteful hiring/firing cycles, thereby increasing upfront costs.
1.4 Decreased profitability
Market volatility makes it challenging for a company to win new opportunities. Further, it may also affect the ongoing projects and bring them to a halt. Additionally, as it becomes hard to onboard highly skilled and qualified resources, it may cause schedule overruns, increased burnout on the existing resources, and sub-par quality of deliverables. These factors can adversely affect a firm’s reputation and reduce overall profitability.
Given the ways market volatility can hamper a company, let’s understand how resource capacity planning can help combat it.
5 ways resource capacity planning helps beat market volatility
Resource capacity planning is the process of determining the gap between the future capacity and demand for resources. It also involves formulating a robust strategy to bridge this gap.
Effective resource capacity planning can be advantageous in combating market volatility in the following ways.
2.1 Minimizes project resourcing cost
Efficient capacity planning helps identify under/over skilled resource allocation on projects and fix them to retain profitability. It also helps leverage cost-effective global resources without compromising quality and profitability to survive volatile conditions.
Furthermore, foresight into the future skill demands helps managers to onboard the right resources ahead of them and avoid cost-overruns otherwise caused by last-minute hiring activities. Finally, it also helps align the workload with resource capacity eliminating costly hiring/firing cycles.
2.2 Helps bridge the demand-capacity gap proactively
Proper resource capacity planning helps predict the shortfall/excess of resources well in advance. To eliminate resource excess, the manager can bring forward future projects or sell excess resource capacity. To eliminate resource shortfalls, they can upskill and reskill the existing workforce or hire contingent resources as appropriate.
By filling the skill gaps proactively, the organization can efficiently manage future projects. This way, securing the fate of the projects with effective capacity planning helps maintain sustainability and profitability despite market volatility.
2.3 Enhances billable resource utilization
Capacity planning helps identify and forecast billable, strategic, and non-billable work utilization. Based on that, the manager can mobilize the resource from a non-billable or low-priority job to billable work to enhance productive utilization.
Further, if a resource is on the bench with skills that partially match a job, the management can provide on-the-job training and increase billability. Thus, it can help them enhance utilization levels of resources and sustain the revenue and profitability essential to fight market volatility.
2.4 Fosters multi-skill building of resources
Market volatility makes it necessary for the workforce to stay abreast of the ever-evolving skill demands necessary for business sustenance. Therefore, managers must implement training activities for employees to fulfill future skill requirements.
They can also initiate upskilling/reskilling/multi-skilling programs for resources to diversify their portfolios and make them future-ready. This way, multi-skilling can help ward off market uncertainties and sustain the business.
2.5 Facilitates building of an on-demand workforce
Efficient capacity planning can help businesses foresee upcoming skill requirements and hire flex workers like casuals, part-timers, freelancers, etc. It helps meet resource shortages without incurring any overhead costs and prevents wasteful hiring/firing cycles.
Thus, an on-demand workforce is also helpful in handling a sudden surge in the workload on the remaining resources due to prolonged absences/unplanned attritions. For example, a company highly impacted by market volatility can consider an on-demand workforce as a replacement for a permanent workforce. It won’t only help meet various project requirements but also save costs of hiring and retaining permanent employees.
How can futuristic resource management software help beat market uncertainties?
Saviom’s resource management software provides enterprise-wide visibility and advanced filter options to find the right resources for each job by role, qualification, experience, competency level, availability, cost, etc. At the same time, it helps centralize and keep the competency information up-to-date across the enterprise.
The capacity-vs-demand report helps predict excess/shortfall of resources and enables managers to proactively bridge the gap. It, in turn, helps reduce billable losses and avoid delays in projects. Moreover, heat maps provide the forecasted and actual percentage of each resource’s billable, strategic, and non-billable utilization and take corrective actions to maximize billable utilization and retain overall profitability.
In addition, by looking into project vacancy and bench reports, managers can proactively assign resources to suitable opportunities before getting rolled off from current engagements. It also helps initiate the right upskilling/training programs to future-proof the workforce and handle multiple skill demands efficiently.
This helps keep the workforce optimally utilized and future-ready to tackle ever-evolving skill demands, making the organization immune to volatility.
Conclusion
Resource capacity planning is invaluable in today’s business world. It helps future-proof the workforce, maintain profitability, and ensure sustainability. Therefore, every enterprise must implement appropriate resource capacity planning strategies discussed above paired with a futuristic resource management tool to secure its business against market volatility.
