The Art and Science of Capacity Planning
by Tracy Hennessy, Handsome
Capacity planning is often seen as a numbers game. Salaries, staffing availability, utilization, revenue, and risk are important daily considerations for keeping your business strong and growing.
Ensuring I’m getting the right mix of people, hours, and personalities at the right time is critical to project and company success. Since I help staff and manage collaborative teams, I can’t just play by the numbers - capacity planning is both an art and a science.
Adjust your quarterly utilization goals based on business patterns. Setting annual utilization goals is commonplace. Our annual utilization goal is 80%. As business ebbs and flows, you may see regular patterns emerge over time. Always see a dip in business in Q3? Always have a hot Q2? Break your goals down by quarter, and adjust them to accommodate these trends so you’re not playing catch-up at the end of the year. Plan your marketing or internal initiatives (when possible) ahead of time so they line up with periods when you can best utilize any team members on the bench.
Make Backup Plans to Your Backup Plans. It’s not easy to predict exactly when projects will hit, or in what order they’ll land; and it’s impossible to predict if a life event will bench someone on your team. Backup planning is essential. Make sure you have a clear understanding of the projects that are highest priority for your company, and build out 2-4 staffing scenarios using tools like Google Sheets or Forecast to outline how you’d utilize current or future staff.
When building my recommendations to give to other department heads, I rank projects based on a series of factors such as importance, budget, likelihood, urgency, and impactfulness. I flag any hiring needs as early and often as I see them; but I am also clear about the likelihood of those needs and the risk if we don’t staff on time. We also aim to keep a mix of 20-30% contractors on staff to fill specialized needs or to manage risks accordingly.
Know the humans behind the numbers. Ultimately, collaborative teams must have team chemistry to be successful. We are dealing with real humans, after all. As a staffing manager, knowing your team as well as you can--at least enough to summarize key strengths and weaknesses of your team--will go far. Knowing which designers are junior but move more quickly than others, or who might be more senior in skill-set but weaker in presentations will make sure you’re putting the right people on the right projects.
The theory of Dunbar’s number states that there’s a cognitive limit to truly knowing more than 150 people at a time. Handsome currently has a staff under 150, so I have the luxury of knowing my entire team, and things that aren’t easily verbalized like signs of burnout, over-commitment to projects, or underutilization. As we grow, knowing at least the top-level strengths and weaknesses of each employee is critical for me to keep managing the art behind the numbers game. Some questions to consider for better understanding your team members are: Does this person do well under tight timelines? Do they get bored easily with long-term projects? What is their defining personality type: are they a superstar presenter, utility player, or precision-honed specialist?
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Optimizing team utilization to set your agency up for success is more than an economics and spreadsheet game. To truly build, support, and nurture a solid team, you should look beyond someone’s strengths and weaknesses and get to know their aspirations both within their current role and beyond. What are their growth areas? What are they trying to work on professionally and personally? Knowing their goals ensures they’re given the opportunity to shine, and to unleash any potential secret weapons they may possess. Long term, this will lead to higher retention and a happier and healthier team.
About the Author: Tracy has over 8 years of agency experience staffing and managing projects for clients touching nearly every industry. As the head of project management and strategy teams, she’s ultimately responsible for the successful delivery of digital services across Handsome’s entire portfolio. When Tracy isn’t running a 1,200+ member digital PM meetup in Austin, she can typically be found running someplace in the city with her dog, Maddie.