How To Efficiently Allocate Resources To Remote Teams

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Guest post by Ashley Gwen Wilson, content creator writing about business and technology

According to a study by IWG, more than two out of every three employees work at home every week.

Remote working has been on the rise lately because remote workers enjoy a better work-life balance than their office-bound colleagues, making them less stressed.

Remote working isn’t just beneficial to employees; companies benefit as well. Remote employees tend to be focused and results-oriented, making them 35 to 40% more productive than employees stuck at an office.

Additionally, hiring remote workers allows access to a broader pool of talent, so those companies get to make great hires transcending geographical constraints and boost their profitability and bottom line.

That said, one of the harder aspects that comes with this new form of work is resource allocation. Before diving into some best practices, let’s look at some of the most important resources a business can have.

What are the main resources of a company?

Any company has three main resources it controls:

  1. Labor
  2. Capital (financial assets)
  3. Material (tangible assets)

There is another resource that is critical to the success of any company: time. Even though all companies have the same amount of hours in a day, what distinguishes one business from another is how they allocate their time to different projects and endeavors.

How to efficiently allocate resources

When it comes to resource allocation, there are two steps:

  • Resource allocation among business units: Every company is made up of different business units. A pertinent question is how to distribute their resources among different business units.
  • Resource allocation within a business unit: Once a company has settled on how to best distribute its resources among various business units, managers within each unit have to figure out how they will allocate the resources they received.

Let’s look at both of these steps:

Resource allocation among business units

Companies, both big and small, tend to struggle with resource allocation among their different business units. The president of each unit tends to defend their territory, arguing that their part of the business is essential and that any cuts to the budget would spell disaster for the entire company.

This puts executives in a tough spot where they have to decide between funding current cash cows and diverting resources to other potentially more lucrative endeavors.

Most executives and managers are acutely aware of the importance of resource allocation; around 83% of senior executives realize that resource allocation is the best management lever at their disposal to spur growth. They understand that correct resource allocation is the key to getting the maximum ROI on each dollar invested.

However, the real difficulty lies in the how of it all.

According to another report by McKinsey, the best way to go about it is to break the process down into three steps:

1. Start with asking where the resources should go

Any decision regarding resource allocation should be built on an analytical foundation. This means that executives need to assess both the current and future profitability of each business unit and contrast this with the resources devoted to said units. When looking at profitability, executives need to discern between growth and return on investment. Return on investment (ROI) should be the main deciding factor when considering the allocation of resources.

After a thorough analysis, some units will have either the highest current ROI or the highest projected ROI. In either scenario, these units are the main candidates for receiving the bulk of a company’s resources.

Other units may have low or even negative ROIs. Executives will have to discern why these units are underperforming and whether a change in management will be in order . Alternatively, if the issue is that the unit operates within an unprofitable market, then executives will either have to reduce the number of resources allocated to that particular unit or be forced to dissolve the unit altogether.

If the analysis is based on objective, historical data, no manager will be able to dispute the results or argue that they are biased against them somehow. Executives need to take into consideration market and competitive insights to make their analysis more complete. This foundation will make it easier to sell the ensuing decisions to the managers of each unit.

2. Figure out how much should go to each unit

Once the most profitable units have been identified, it is time to determine what resources to allocate where. This step can be harder than the preceding one, as investing more money doesn’t always mean getting a higher return.

Sometimes investing more money runs into the problem of diminishing returns where every extra dollar invested brings in fewer and fewer returns. Alternatively, there are other opportunities where the only way to achieve a certain ROI is to invest a great deal upfront.

Rather than looking into the ROI, executives should look at under-resourced units and ask themselves a few questions:

  • How big is the market upside that is not being captured?
  • How much financial and labor resources are necessary to capture this upside?
  • What are the risks hampering this unit? (The risks could include the competition or other pertinent market dynamics including governmental regulations)
  • Would it be better to inject resources at once or incrementally?

3. Be careful when executing the allocations

It is impossible to please everyone with the final result. This is more prominent when working with remote employees because distance impedes communication. Therefore, executives should always keep a few things in mind when executing the allocations:

  • Transparency is of the utmost importance. The more everyone is clear on the rationale behind the decisions made, the easier they will accept the final results. The underlying assumptions of each decision have to seem reasonable. For instance, if certain employees are assigned to a certain unit while others are assigned to more than one unit, this decision has to be defensible.
  • If employees are scattered around the globe, executives need to do their best to keep communication channels open. Change can be difficult, and an alteration in resource allocation can scare some employees, making them wonder what this shift means for their future with the company.
  • Since a big impetus behind reallocations is increasing a company’s flexibility, executives should review the assumptions underlying their decisions regularly; otherwise, they risk becoming too rigid in their own ways and failing to react to an ever-changing market.

Resource allocation within a business unit

After resources have been allocated to different business units, the next step is to figure out what managers should do with the resources they are given.

Each business unit will be in charge of several projects, and managers have to create a solid plan to successfully tackle everything on their plate while allowing for unexpected bumps and surprises.

Here are the main steps every manager will have to follow:

1. Find out how much work needs to be done

First, managers need to take stock of the entire workload their unit is responsible for. This means creating a list of all the projects and processes being carried out, including jobs of a cross-functional nature, and discern the required time and scope for each project.

Furthermore, breaking down projects into smaller tasks and prioritizing each task based on importance and urgency makes it easier to estimate the amount of time each task would take. This is liable to change based on several factors, including who ends up working on the task and whether the scope of the task changes or stays the same.

2. Know the capacity of the unit

The main resource controlled by business units is people. Consequently, to properly manage the workload, managers need to be aware of the capabilities of their team members along with their availability.

When assessing the availability of each team member, managers should consider current responsibilities shouldered by each individual, as well as sick leave, vacation time, and public holidays. In short, they have to figure how much time each team member can dedicate to any given project.

For some units, tangible assets can be another important resource to take into consideration. In this case, managers need to take stock of all their assets. Occasionally, some assets will be shared between units, in which case managers will have to communicate with the managers of the other units and figure out how they can all make the most of the asset in question.

3. Distribute the work based on the last two steps

Once managers know how much work needs to be done and how much work each team member can shoulder, assigning tasks should be pretty straightforward. Nevertheless, there are a few caveats managers should bear in mind:

  • The highest priority work should be assigned first. Urgent tasks need to be on the top of everybody’s to-do list.
  • Tasks should be assigned based on capabilities and availability so that each individual works on the tasks that best suit their skills and experience. Additionally, managers should inform each member why they’re assigning certain tasks to them, hence increasing the team’s engagement and setting expectations from the beginning.
  • Another way of increasing the team’s engagement is to let their voice be heard; after all, they know their ability and comfort zones better than anyone else. In such a manner, each team member will feel valued and be more willing to take ownership of the tasks they choose.
  • The distribution of tasks needs to be fair to everyone involved. Otherwise, resentment may fester quickly, causing the top-performers to consider employment elsewhere.
  • Managers need to be careful not to overload their teams to prevent burnout.

4. Time block each team member’s calendar

Time blocking is assigning a certain amount of time in one’s schedule for a certain task or job. During this time, With this in mind, managers should update each member’s availability and block time on said member’s calendar for the assigned work.

To do this, managers will have to rely on their earlier guesses of how much time each task would take as well as the critical input given by the team member working on the task in question.

Time blocking increases a team’s productivity as it helps them work without distraction and focus on a specific task at a time rather than jump haphazardly from one task to another.

Moreover, time blocking is a way for managers to update their entire team’s availability, letting them know if they can take on more projects or if they already have enough on their plate.

5. Perform regular check-ins

Plans are liable to change at an instant. For example, the project scope might change, a team member might struggle with their task, or external conditions might affect the business unit somehow. In all these scenarios, managers would do well to get ahead of the problem and deal with it before it escalates.

One way to do so is by performing regular check-ins with each team member. This step is all the more important when working with remote teams: When managers oversee their team in an office, it is much easier to spot a problem than when each employee is out of sight.

These check-ins can be via e-mail or video call. Regardless of the medium, what matters is that managers are always aware of the latest updates from their team and that each team member is aware that the manager is available to help at any time.

6. Use the proper tools for the job

There are many challenges that come with managing a remote team. For instance, the distance can impede effective communication between team members as well as between the manager and their team. Also, without the benefit of an office setting, managers may have a hard time gauging the performance of their team members and measuring their KPIs.

Because of this, managers need to use the right tools to facilitate the entire process. There are various tools suited to different businesses that streamline team communication and project collaboration.

7. Assess the effectiveness of the allocations once a project is over

One of the best ways to increase the efficiency of resource allocations is to learn from past mistakes. This means taking the time to analyze the work done on each project and seeing whether things could be improved.

With this in mind, managers should have an online meeting with their remote workers after the conclusion of every project, and the entire team should endeavor to figure out what worked and what didn’t. Teams should ask themselves the right questions, including:

  • How effective was the team in communicating with each other and with the client?
  • How clear was each team member on their responsibilities? Was there any ambiguity when it came to the expectations placed upon them?
  • How efficiently did different business units collaborate when the need arose?
  • What are the areas for improvement?

Managers using the proper tools will already have some of the answers to the above questions. For example, software that tracks KPIs can point out any inefficiencies that might have afflicted the entire team.

Conclusion

The importance of proper resource allocation cannot be overstated. It reduces risk, increases productivity, and boosts a company’s bottom line. Resource allocation is even more important when it comes to remote workers who don’t communicate with each other all that often and are liable to create inefficiencies without proper supervision.

Bearing this in mind, executives and managers need to understand that there are two levels to resource allocation: resource allocation among business units and resource allocation within each business unit.

Whereas carrying out the former involves creating projections and trying to find the units with the highest ROI, the latter requires excellent managerial skills that overcome distance with clear communication and that temper the unexpected with vigilance.

Ashley Wilson is a content creator, writing about business and tech. She has been known to reference movies in casual conversation and enjoys baking homemade treats for her husband and their two felines, Lady and Gaga. You can get in touch with Ashley via Twitter.

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How To Efficiently Allocate Resources To Remote Teams

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