The term “resource loading” describes a ratio calculated by dividing the number of assigned labor hours by the number of hours you have to complete the work. Keep reading to learn more about this metric and its significance.
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What is resource loading in project management?
Resource loading is a measure of your construction company’s workload relative to its capacity. You can calculate it in one of two ways.
Method #1
The first amounts to a rough approach; estimate the number of labor hours it will take to complete a project and divide it by the number of labor hours you actually have to complete the work.
Resource loading schedule example #1
For example, let’s say a project will take an estimated 40 hours of labor to complete. If you have a full business week (40 labor hours) to complete the work, your labor for this project is loaded to 100%.
Method #2
A more granular approach entails dividing the number of labor hours by the number of hours you can actually reasonably allocate resources to the task.
Resource loading schedule example #2
Let’s reuse our earlier example with the exception that your company’s labor supply is such that you can only allocate 30 labor hours to the task. In this scenario, your labor is loaded to 133%.
Why is resource loading important?
Resource loading is an important measure of your company’s resource utilization. It can be an important indicator of over or under-utilization.
In both of our earlier examples, for instance, your labor resources would arguably be significantly over-utilized (particularly in the latter scenario where your labor was loaded to 133%, which would necessitate considerable overtime for your workers).
Prolonged utilization at these levels might yield serious consequences (i.e. burnout and increased risk of injury).
Resource loading done right will also help your company establish a better picture of its capacity relative to its workload. This is particularly true if your prior workforce planning efforts have entailed a general approach that doesn’t take resource specialization into account. After all, labor is not fungible; certain workers are better geared towards some tasks than others, which often gets missed when you estimate capacity using a less granular approach than resource loading.
Construction Estimating Software FAQ
What is digital construction estimating software?
Construction estimating software is used by estimating teams to calculate and predict costs for a construction project. These digital tools help streamline the estimation process from bid creation to cost analysis to ensure proposals are as precise as possible and help put forward successful bids. Getting estimates right up front is a key part of managing project scope creep in construction.
How does construction estimating software work?
Construction estimating software works by allowing users to input project details and then use built-in databases to forecast expenses. Advanced estimating software may use algorithms and machine learning to help forecast expenses. It’s important that when you evaluate your construction estimating software, you consider how it integrates with your process. You will want to pull in data from tools, like your CRM and workforce planning software, as well as information from project documents.
What is estimating in construction?
Estimating in construction involves calculating the costs for a project including items like materials, wages, equipment, and real-estate costs. Forecasting line-by-line expenses accurately is key to creating successful bids that win contracts and also ensuring your project is profitable. Estimating is an important skill in construction, as it’s a balance act between what you think will happen and what will happen.
Determining and maintaining the ideal resource loading ratio
There’s no magic number representing the ideal resource loading ratio. However, there are some good general practices to keep in mind when conducting workforce planning based on this ratio.
Maintain flexibility
Your company’s resource capacity (an essential component when calculating resource loading) is not static. Rather, resources will often need to be reallocated based on circumstances.
Maintaining excessive resource loading makes this difficult. It may artificially inflate your company’s true capabilities and leave you unable to plan effectively.
For example, let’s say you liberally calculate your resource loading at 75% when a more accurate number would be 100%.
If you subsequently take on a job you think might push your resource loading to 100% based on the methodology behind your original calculation, you’ll be in hot water since your actual loading would be well above 100%.
Strive to understand your resources’ capacities to the best of your ability
Your resource loading calculation will only be as accurate as your understanding of your company’s capabilities and resources.
There are many ways to establish a more accurate understanding, including:
- using resource management software to track worker productivity and understand how many hours you can actually count on laborers being productive for, on average
- establishing trust with your workers so they feel comfortable being honest about their capacity
- comparing increases in hours worked to the actual rate of productivity (observing when your company starts seeing diminishing returns and using that as a benchmark)
Actively address skill gaps in your company’s workforce
Skill gaps are your worst enemy when you’re trying to set resource loading efficiently. It increases the complexity of doing so; after all, having only a few workers capable of performing in-demand tasks will likely mask your understanding of your company’s capacity to handle such work.
This highlights the importance of tracking (and actively working to close) skill gaps. Check out this article to learn more about how you can use data to achieve this.
Make use of resource loading calculations across your business (including when deciding whether to bid on new jobs)
Resource loading calculations can benefit your entire construction company – particularly when deciding whether you have the capacity to take on new work. Once you’ve identified an ideal resource loading level, use it to influence this and other key decisions.
How does resource loading in project management differ from resource leveling?
Resource loading and resource-leveling are two similar-sounding yet different resource management concepts.
The latter is the process of addressing resource allocation conflicts in a way that ensures tasks can be completed without adjusting the resource supply. This will have an effect on your company’s resource loading but the terms are not interchangeable, nor are they mutually exclusive.
What is resource loading? Conclusion
We hope this article has helped you understand resource loading and its importance in the construction industry. Visit our blog for more articles on the topic of construction project management.
Visit this page to learn more about Bridgit Bench, our industry-leading resource management tool.
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Frequently asked questions about resource loading
What is a loading resource schedule?
The term “loading resource schedule” describes a type of schedule designed to ensure your construction company allocates resources effectively. The schedule itself can take many forms, provided it helps your company understand its resource loading and capacity.
Why is resource loading and leveling done in projects?
Resource loading and leveling are strategies construction management professionals use to ensure their companies have the capacity to complete work efficiently. Resource loading helps professionals understand how their capacity for work compares to their current resource allocations. Resource leveling, meanwhile, helps professionals complete projects successfully when the supply of resources is constrained.
Why is resource loading so important?
Resource loading is a means of comparing your construction company’s current resource allocation to the resource demand it faces. This will help you better understand how resources are being utilized and whether you are at risk of over (or under) utilization.
Brandon-Richard Austin
Brandon-Richard Austin is a writer and content strategist focused on the construction sector. He’s passionate about educating readers on construction management techniques and best practices.
