Risk Management: Understanding Resource Risks

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Research shows that a substantial portion of project problems stem from resource risks, so understanding this area is pivotal for success. These risks can be broadly categorized into three areas: staffing, outsourcing, and financial resources, each presenting its own set of challenges.

Staffing Risks

Staffing risks are the most frequently encountered, affecting many projects. These include permanent or temporary loss of staff, delays due to competing commitments, project start delays, and loss of team motivation. The departure of key personnel can cause considerable delays, underscoring the importance of strategic staffing and resource allocation. Temporary staffing issues and scheduling conflicts further compound these challenges, highlighting the need for effective management of human resources. Moreover, maintaining team motivation is crucial, as its decline can significantly derail project progress.

Outsourcing Risks

Outsourcing presents its own risks, primarily late or inadequate deliverables from external partners. Given the ubiquitous trend of outsourcing to reduce costs, projects face an increased risk of delays and unsatisfactory results. This situation emphasizes the need for a careful balance between cost savings and risk exposure, alongside rigorous contract management and planning.

Financial Resource Risks

Although less common, financial resource risks often have the most substantial impact on project duration. Insufficient funding can dramatically extend a project's timeline and often leads to other resource-related challenges, such as reduced staffing and the cancellation of outsourcing agreements. Therefore, robust financial planning and management are vital to prevent these issues from impacting project success.

Top Ten Resource Risks

Following are ten key resource risks faced by most projects:

1. Budget Constraints: Insufficient funding limits the acquisition of necessary materials, software, and technology, leading to project delays or compromises in quality.
2. Key Personnel Turnover: The resignation or loss of staff with critical expertise and knowledge can significantly disrupt project progress and timelines.
3. Regulatory Limitations: Restrictions related to staffing, such as compliance requirements or visa issues, can hinder the assembly of a proficient project team.
4. Subcontractor Reliability: Dependency on external partners poses risks of delays and quality issues if subcontractors fail to deliver as expected.
5. Unexpected Staff Absences: Personal emergencies, health issues, or other unforeseen events resulting in key team members' absence can stall project tasks.
6. Reassignment of Staff: Diverting project personnel to other tasks or projects due to changing priorities can deplete essential resources and expertise.
7. Supply Chain Disruptions: Challenges in procuring necessary materials, either due to financial limitations or supplier issues, can delay project milestones.
8. Equipment Access: Delays or financial constraints in obtaining critical technology or equipment can impede project execution.
9. Contractual Delays: Prolonged negotiations or the absence of clear penalties for missed deadlines can lead to project start delays and timeline extensions.
10. Team Burnout: Long-duration projects or back-to-back assignments can lead to decreased team motivation and productivity, affecting project outcomes.

Risk Register by ProjectBalm

Recognizing and addressing the varied types of resource risks is essential to steer your project toward success. This is one reason we created Risk Register by ProjectBalm.

Our goal was to automate best practice risk management techniques, and do so via an elegant, usable interface that works with you, and not against you. Risk Register will help you to identify, analyse, treat and monitor risks more easily and effectively than ever before.

If you are experienced at risk management, you will find in Risk Register a tool that works the way you want it to work. If you are new to risk management, our documentation and videos will take you through the whole risk management process, giving lots of useful examples.

Risk Register is fully compatible with risk management standards such as ISO 31000, and can also be used for governance, risk, and compliance (GRC) programs such as Sarbanes-Oxley and PCI. And, of course, Risk Register allows you to easily distinguish between opportunities and threats.

Over the last few years, we've grown to become the most popular risk management solution in the Jira marketplace and we are now an Atlassian Platinum Partner. Why not try out Risk Register by ProjectBalm for yourself?