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- Herausgeber: John Wiley & Sons
- Kategorie: Fachliteratur
- Sprache: Englisch
Place the right people in the right roles at the right time with this essential guide
Project estimating, or project workforce planning, involves a systematic process of identifying and managing the key human resources required for efficient and effective completion of a project. This process necessarily balances a huge range of factors, from forecasting labor costs to managing team composition to incorporating relevant legislation and projecting the impact of artificial intelligence and market conditions. Effective workforce planning contributes to overall project success by ensuring that the right people are in the right roles at the right time.
Project Workforce Estimating: Best Practices for Project Managers offers a comprehensive overview of workforce planning, from foundational principles to advanced techniques. It offers a range of techniques and strategies that can be incorporated into planning for virtually any kind of project, along with detailed guidance to ensure accurate projections. Closely aligned with industry standards, it is a must-own for project managers looking to systematize a critical stage of project management.
Project Workforce Estimating: Best Practices for Project Managers readers will also find:
- Information aligned with standards such as the PMBOK® Guide and Earned Value Management Systems
- A detailed exploration of global workforce estimation, project life cycle costing, and more
- A range of techniques and strategies suitable for any possible industry
Project Workforce Estimating: Best Practices for Project Managers is ideal for project managers, business analysts and consultants, executives and senior managers, and HR professionals.
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Veröffentlichungsjahr: 2025
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Table of Contents
Cover
Table of Contents
Title Page
Copyright
Dedication
Preface
About the Companion Website
1 The Future of Project Workforce Planning
Navigating the World of Limited Resources
Principles of Project Workforce Management
Workforce Management in the External Environment
Workforce Management and Legislation
Professional Development for Project Teams
Labor Rate Structures
The Role of Contract and Temporary Staff
Impact of Artificial Intelligence on Future Workforce Planning
Note
2 The Complexities of Project Workforce Estimating
Sources for Workforce Estimation
Factors Influencing Workforce Estimation
Stakeholder Involvement in Workforce Staffing
The Key to Workforce Estimating
Earned Value Management Systems and the PMBOK
®
Guide
Direct Versus Indirect Project Costs
Breaking Down the Overhead Costs
Forward Pricing Rates: Salary
Calculating Available Work Hours
Work Authorization Form
Project Pricing Overview
Validating Estimation Assumptions
The Fuzzy Front End
Project Portfolio Management
The Value Proposition Behind Project Portfolio Software Tools
3 Techniques for Estimating Project Workforce Needs
Overview of Workforce Estimation Methods
From Labor Hours to Labor Costs
Enhancing Estimation Accuracy
Estimating Costs Per Hour
Parametric Estimating
Analogy Estimating
Ground‐up (Grassroots) Estimation
Applying Learning Curves in Workforce Estimation
Understanding the Learning Curve Effect
Estimating Management and Support Needs
Identifying Hidden Labor Costs
The Impact of Documentation on Labor Costs
The Need for Workforce Backup Plans
Common Challenges in Workforce Estimation
The Essential Value of Enterprise Risk Management
Note
4 Monitoring Workforce Expenditures
Initiating Workforce Expenditure Tracking
Converting Work Hours into Financial Metrics
Balancing Hours and Dollars in Project Tracking
Analyzing Workforce Metrics
Analyzing Spending Trends
Example of Termination Liability
Oversight of Workforce Expenditures
Setting Reporting Intervals for Workforce Status
Documenting Challenges in Workforce Reporting
Optimizing the Business Models Around Workforce Strengths
5 Growth of Innovation Project Teams
The Need for Innovation and Creativity
Introduction to Innovation
Types of Innovation
Co‐Creation Innovation
Defining Innovation Success and Failure
Value: The Missing Link
The Innovation Environment
The Innovation Culture
Idea Generation
Understanding Reward Systems
Resources Management
The Power of the Agile and Hybrid Approaches
Innovation Project Management Future Skills
Innovation Portfolio Management
The Need for Innovation Metrics
Extracting the Business Value
The Value of Prompt Engineering in Fostering Innovation
References
6 Designing the Future Workforce
Identifying Desired Team Competencies
Perspectives on Project Management
Strategies for Workforce Recruitment
Degrees of Permissiveness
Commitment and Expectation Management
Engaging High‐Value Team Members
Addressing Underperformance
Non‐Financial Incentives for Motivation
Celebrating Achievements from Plaques to Public Acknowledgments
The Role of Public Recognition
Alternative Non‐Monetary Rewards
Timing and Patterns of Staffing Needs
The Role of Organizational Development
7 Advanced Topics in Workforce Planning
Budget Allocation and Adjustment
Securing Additional Project Funding
Global Workforce Estimation Challenges
Structuring Project Teams for Success
Incorporating Management Plan Data
Developing Contingency Plans for Workforce Management
The Benefits of Co‐Located Teams
Project Life Cycle Costing Approaches
Techniques for Workforce Leveling
Advanced Workforce Leveling Strategies
Maturing an Inventory of Skills and Competencies
The Next Potential of AI in Enabling Workforce Planning
8 Case Studies in Workforce Planning
Notes
Index
End User License Agreement
List of Illustrations
Chapter 1
Exhibit 1.1 Future Workforce Planning Model
Figure 1.1 The Future of Professional Development
Figure 1.2 Diagnosing the Organization
Figure 1.3 Future Leadership Qualities
Figure 1.4 Team Dynamics
Chapter 2
Exhibit 2.1 EVMS Activities
Exhibit 2.2 Indirect Costs
Exhibit 2.3 Hours Available for Work
Exhibit 2.4 Tracking of Assumptions
Exhibit 2.5 Critical Versus Non‐Critical Constraints
Figure 2.1 Clarity of the Front End
Chapter 3
Exhibit 3.1 Traditional Estimating Techniques
Exhibit 3.2 Typical Learning Curve
Figure 3.1 Management Support Rules of Thumb
Figure 3.2 Criticality of Backup Planning
Figure 3.3 Enhancing Estimating with ERM
Chapter 4
Figure 4.1 The Dynamic Nature of Workforce Tracking
Exhibit 4.1 Assigned Versus Planned Resources
Exhibit 4.2 Grade Level of Assigned Resources
Exhibit 4.3 Head‐Count Metric
Exhibit 4.4 Regular, Overtime, and Unstaffed Hours
Exhibit 4.5 The Spending Curve
Figure 4.2 Workforce Oversight
Figure 4.3 Business Model Considerations
Chapter 5
Figure 5.1 Innovation for Growth
Figure 5.2 Innovation Foundation
Exhibit 5.1 Typical Types of Innovation for Products
Figure 5.3 Co‐Creation Partnership
Exhibit 5.2 Some Differences Between Traditional and IPM Practices
Exhibit 5.3 Shortcomings with Resource Identification
Exhibit 5.4 Resource Allocation
Figure 5.4 Workforce Agile Approaches
Exhibit 5.5 Typical Life‐Cycle Phases
Exhibit 5.6 Typical Knowledge Management Components
Exhibit 5.7 Value Extraction
Figure 5.5 Prompt Engineering and Creativity
Chapter 6
Figure 6.1 Project Management Perspectives
Figure 6.2 Non‐Monetary Rewards
Exhibit 6.1 Typical Staffing Plan
Figure 6.3 Organizational Dependencies
Chapter 7
Figure 7.1 Team Structuring for Success
Exhibit 7.1 Workforce Peaks and Valleys
Exhibit 7.2 Adjusted Workforce Smoothing
Figure 7.2 Maturing Competencies
Figure 7.3 The Human‐Digital Bridge
Figure 7.4 The Culture Enabler
Figure 7.5 The Human Skills Enabler
Figure 7.6 The Career Enabler
Figure 7.7 The Trust Foundation Enabler
Figure 7.8 The Risk Appetite Enabler
Figure 7.9 The Decision‐Making Enabler
Figure 7.10 Use and Impact of GenAI
Guide
Cover
Table of Contents
Title Page
Copyright
Dedication
Preface
About the Companion Website
Begin Reading
Index
End User License Agreement
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Project Workforce Estimating
Best Practices for Project Managers
Harold Kerzner, Ph.D. and Al Zeitoun, Ph.D.
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ToOur wives – Jo Ellyn and NicolaAnd our kids –Jason B, Lindsey, Andrea, Jacalyn, Jason K,Adam, Zeyad, and SarahFor being our source of joy and continued source of inspiration
Preface
A great deal of literature exists on workforce planning and most of the analyses contain models for matching the supply and demand for labor as organizations attempt to grow. The models also discuss how costs and productivity will be impacted.
Most of the models address a production environment where the demand is known or can be predicted with reasonable accuracy. The costs are attributed to hiring workers that require training to achieve the skills needed. Training can take place on‐the‐job or off‐the‐job. The models may also discuss labor shortfalls resulting from random resignations and when employees retire.
In a project environment, workforce demands are highly uncertain. There exists a shortage of literature on workforce planning in project environments. There is no guarantee in a project environment that clients will ask for other similar products or services once your project for them is completed. Simply stated, project environments usually have an ever‐changing demand for products and services. New clients may emerge that require a workforce with different skills. We must either retrain the existing workforce or terminate some of them and hire new recruits to be trained.
The type of project also impacts workforce planning. Projects for external clients may be the result of competitive bidding with the goal of achieving a certain level of profitability. These projects are needed for strategic organizational growth. At the same time, there may be internal or operational projects that must be staffed for the business to continue. Continuous competition for resources between internal and external projects can occur.
Project workforce teams of the future will have to accommodate the impact of digitalization. Technology enhancements and augmentation are here to stay, and the future project workforce has a wonderful opportunity to make technology a true ally. This has the potential of making the workplaces of the future more fun. Instead of the classic nervousness of project teams about the availability or accuracy of the data, or if the boos will like the report, we could shift the focus to other critical discussions and to building future skills, like creative thinking. In an era when topics like mental health have dominated discussions, it would be great that we design the right fitting workforce mix and that we turn possible project teams’ despair to strategic focus and clarity.
The intent of this book is to focus upon workforce planning in a project environment where significant fluctuations can occur in demand, risks, and the business environment. The urgency surrounding this topic stems from the highly projectized future of work that continues to accelerate. This is also coupled with the valuable ongoing exploration around the impact of digitalization on the future jobs to be done and their implications on the future workforce.
About the Companion Website
This book is accompanied by a companion website:
www.wiley.com/go/Kerzner_ProjWFE
The website includes:
Learning Objectives and figures for each chapter.
Instructor's Manual: Answers to case studies and teaching notes.
1The Future of Project Workforce Planning
LEARNING OBJECTIVES
Understand the challenges with a limited workforce
Understand where the workforce comes from
Understand how legislation impacts the workforce
Understand the need for workforce professional development and future shifts
Keywords Artificial intelligence (AI); Contracted workers; Corporate workforce needs; Labor rates; Resources limitations; Workforce gap analysis; Workforce legislation; Workforce planning models
Navigating the World of Limited Resources
Today we live in a world of limited resources. Companies are running lean and mean due to uncertain economic conditions, unavailable qualified labor, and rapidly changing customer demands. Yet companies never seem to run out of projects to work on, but they do have a shortage of resources to support all of the desired projects.
Newly appointed project managers often willingly accept project management positions with the mistaken belief that they will have all of the necessary resources for their projects. Executives and sponsors also reiterate these words, namely that you will get all of the workforce support needed when selecting and appointing the new project manager. But then, after a go‐ahead, reality sets in and the project manager discovers that he/she is living in a world of limited resources.
To make matters worse, newly appointed project managers do not seem to have any idea as to the complexities with project resources staffing and estimating. Wanting an army of resources may seem like a good idea at first, but the allocated budget may not even allow you to have the minimum workforce you think you need. In an ideal situation, you would determine the workforce needed first, and then price out the workforce to determine the budget for the project. While this sometimes happens, it is more likely that the budget is established first by senior management when approving the project, often without any involvement by the project manager, and then the project manager must staff the project based upon the available funding. The result is often a project team with a shortage of resources or team members with inadequate skill sets.
For simplicity's sake, companies can be classified as project‐driven and non‐project‐driven. Project‐driven companies usually survive on the various projects they manage for external clients through a competitive bidding process. In these companies, the size and type of resources can fluctuate based upon the types and quantities of projects they are asked to manage.
In non‐project‐driven companies, there are usually standard production lines, and projects exist to support the creation of new products or modifications to existing products as well as ongoing business needs. Workforce management is somewhat easier in this type of company.
Both types of companies must deal with the risks of limited resources and need to adopt a workforce planning model. There are two reasonable solutions expected from workforce planning based upon limited resources:
Make sure that we assign the right people with the right skills to the right tasks
Try to increase productivity, efficiency, and effectiveness
With limited resources, it is essential that we have the right people assigned to the right tasks. Project managers may not know the capabilities of the assigned workers and may have to rely upon the expertise of the functional managers who provide the staff. Increasing the productivity of the assigned workers does not mean producing more deliverables or increasing production. Instead, it implies getting workers to perform their assigned tasks more efficiently or more effectively. The proper investment in training and education can make this happen.
For companies that survive on competitive bidding, limited resources are almost always a way of life. Companies tend to bid on more jobs than their resources can support because they know that they will not be awarded all of the contracts they are bidding on. If they were to win more projects through competitive bidding than they can handle, there would still be a reluctance to hire more people for fear that there would be no place to put the people after the projects are completed. Companies that hire when they win a contract and then lay off the workers when the contract is finished may find it difficult to attract talented workers who want some degree of employment stability and security. This can be devastating to the company's reputation and create havoc with workforce planning.
Principles of Project Workforce Management
Workforce management begins with workforce planning. Workforce planning, also known as human resource planning or manpower planning, is the process of determining the human resources that an organization needs to meet its strategic goals. The three critical elements in the process are the forecasting of future labor demand, analyzing present labor availability, and effectively managing resource supply versus demand. The outcome, if done effectively, should be a plan that ensures that the right people with the right skills are assigned to the projects such that there is a high expectancy of achieving the organization's strategic goals. Effective manpower planning also minimizes the risks of overstaffing, having to pay for excess staff that may not be needed, and loss of productivity.
A simple model for future workforce planning is shown in Exhibit 1.1.
Exhibit 1.1 Future Workforce Planning Model
Most of the principles in Exhibit 1.1 apply to workforce planning in any type of company.
The focus of this book is future workforce planning for projects.
Workforce planning begins with an understanding of the organization's business goals now and possibly in the future. Forecasting future manpower needs requires answering the following questions:
What ongoing or new types of projects will be worked on in the future?
How many people will be required to meet the needs of present and future projects?
What skill sets will the employees need?
Gap analysis, as identified in Exhibit 1.1, is more than identifying a potential shortage of resources. It also includes answering the following questions:
Will the organization be required to work on new types of projects?
Will new skills be required?
Will training be a necessity for existing or newly hired personnel to develop the skills needed?
How long might it take for employees to develop the new skills?
Gap analysis is more than making sure you have the right number of resources. It also provides guidance for making sure you have the best possible employees assigned to the best possible activities.
Developing either organizational or project manpower strategies includes the following1:
Organizational restructuring:
this may include organizational redesign to fit a potentially new business model, regrouping activities, and improving efficiency.
Training and development:
this may include providing the current staff with training and development opportunities to encompass their new roles and responsibilities as well as training newly hired workers in the new skills needed.
Recruitment activities:
this may include the recruiting of new hires who already have the skills or are willing to learn new skills.
Outsourcing activities:
this may include teaming with other individuals or organizations that possess the needed skills for the tasks.
People come and go for a variety of reasons. Long‐term workforce planning for projects must consider the risks of replacing workers if needed and how they will be trained. People usually find working on projects challenging and rewarding. This is especially a critical attraction point for the next‐generation workforce that enjoys exploring new outcomes. Proper investment in human resources helps retain talented workers and reduces employee turnover.
Human resource planning must also include ways to retain talented employees and keep them motivated. Some techniques include:
Engaging employees effectively when they are assigned to a new project
Making sure they are assigned to challenging work
Providing a recognition program for excellent performance
Providing training that is aligned with their career goals
If we look at the principles of human resources management and project objectives together, we can define project staffing as the process that ensures that the organization has the correct number of people with the correct skills doing the right activities at the right time to achieve the project's objectives. But human resources management on a project is more than simply getting people assigned to the project team. It also involves:
Compensation:
Even though project managers may not have any responsibility for wage and salary administration, they might still provide rewards for the team members, whether they are tangible or intangible, and monetary or nonmonetary. They may also be asked to provide informal feedback to the functional managers as to how the workers are performing.
Safety and health:
These are things that the project manager must do to protect the employees from on‐the‐job injuries and work‐related illnesses. This also involves providing the workers with a suitable place to work assuming that they are removed from their functional area as would be the case with a co‐located team.
Training and development:
Companies must recognize the return on investment in employee education and provide people the opportunity to attend classes or other educational opportunities related to improving productivity. This also involves allowing the workers to take time away from the project for education related to their career development opportunities. If the costs of training are directly related to the project, then the project may incur the training costs. If the employees are attending college classes, such as for graduate degrees, then the project manager must allow these people to continue attending classes. This may require adjusting the times when the worker will be performing his/her project tasks.
Labor relations:
Project managers should not violate corporate labor relations policies established by their company. This involves fairness in treating employees, discipline, promotions, layoffs, and termination. If the company is unionized, then there are corporate expectations on how the project manager should interact with employees of the union. For example, the union may not want their members assigned to tasks above what their pay grade indicates, especially if the workers are willing to accept the assignment believing they will be immediately promoted.
There are many types of workforce planning models like Exhibit 1.1. Examples include:
Manpower planning at the corporate level
Manpower planning at the division or section level
Manpower planning at the project level
Short‐term manpower planning
Medium‐term manpower planning
Long‐term manpower planning
Each type of plan may have different requirements, different personnel, and constantly changing goals and objectives.
Workforce planning models, as shown in Exhibit 1.1, have been used quite extensively for functional organization human resource planning. Only recently, has the model been applied to project organizations.
In the past, most projects relied heavily upon functional organizations to provide the necessary resources and, when the project was completed, the resources would return to their respective functional units. Today, many of our projects are longer in duration and many projects are treated as temporary functional units requiring complex workforce modeling. As such, models as shown in Exhibit 1.1 are being modified for applicability to project workforce planning, regardless of the size and length of the project.
Workforce Management in the External Environment
On short‐term projects, the project manager relies upon the line managers, project sponsors, and the corporate human resources organization to worry about how the external environment influences staffing. But on long‐term projects, especially those that require the use of contracted resources during the project, the project manager must be aware of the external environment. This is extremely important if the project is being executed in another country. Some examples include:
Economic health:
This includes the economic conditions in the host country as well as economic conditions in the parent country. During favorable economic times, quality resources, which may be limited, are in high demand. In some emerging markets, people may change companies quickly, without notice, and with little regard for the project. Also, in favorable times, companies work on more projects making the best resources in high demand throughout the company. During unfavorable conditions, there is a larger than normal risk that the project might be canceled.
The labor market:
During favorable economic conditions, people in the labor market will be seeking higher pay than perhaps what you budgeted for in your proposal. Also, a senior engineer in one country may not have the same skills as a senior engineer in another country.
Competitors:
If competitors monopolize the market where you are executing the project, you may be unable to obtain qualified resources. You also stand the risk of losing qualified resources to the competition.
Technology:
Technological advances as well as organizational process assets may be limited in the host country. If you have contracted labor, they may not be knowledgeable with these processes.
Unions:
Both internal and external unions have tremendous power. Seniority is important and the union may dictate who will work on your project. The union can limit productivity increases and remove people off of your project at the most inopportune time. The union can also prevent employees from working overtime.
Society and politics:
Politics and culture in projects for a host country other than yours may create problems. The decision‐making process may be quite slow, and staffing may be based upon membership in the right political party. The local government may require that procurement contracts be given to companies within the host country just to keep people employed even though more qualified resources exist elsewhere.
Workforce Management and Legislation
Corporate human resources personnel and most functional managers either understand staffing legislation or are trained in it. Project managers, on the other hand, are often placed into project management roles with little knowledge of staffing legislation, and the results can create serious problems for the parent company. The situation becomes more complicated if contracted labor is used, especially from countries in which the project manager has limited knowledge of the culture and the laws.
For example, in some countries, the workers have a right to hold a job and do not believe that they can be fired even if their performance is subpar on the project. Project managers may not be able to have these people removed from the project. In the United States, as well as in other countries, there have been several laws enacted over the past several decades that can affect staffing practices. Many of the laws discuss hiring and firing practices, discrimination, worker rights, and the use of overtime. It is essential for the project managers to develop a proper degree of awareness, and as needed, supplement their understanding gaps with the right experts dependent on the specific global setting of the project.
TIP With the world of work becoming more global, invest in yourself and expand your view of the staffing practices and the dynamics of the global marketplace.
Professional Development for Project Teams
In the early years of project management, worker career development was the responsibility of the worker or the worker's supervisor. Project managers viewed the workers as if they were contracted labor that was leased from the functional departments and treated as merely a cost to the project to be removed as soon as possible. Today, project managers are expected to help the team improve their performance as well as assist the team members with personal career development opportunities.
Today, project managers are expected to:
Identify workers that have the potential to improve through additional training
Provide workers with time away from the job to attend training classes
Identify workers whose performance warrants promotion or assignments with added responsibility
Identify workers whose performance warrants a demotion, lateral transfer, a position of lesser responsibility, or even termination
Determine the need for disciplinary action
Provide the functional managers with performance appraisal information on how the workers are performing on the job
Project managers may not possess formal reward or penalty power. Project managers may be able to identify each of the above items, but the functional managers may be the only people fully authorized to make the final decisions. The best that the project manager can do might be to provide recommendations to the functional managers.
In the future, this could be one of those major transformations in the role of project managers. With the continual move toward projectized organizations, there is a direct impact on how the design of the future organization will be done. This is coupled with the impact of Artificial Intelligence (AI) and other aspects of digitalization that could directly affect the need for classical business functions and result in more project focus in the design. This would be a turning moment in what is expected of the project manager in the future in relation to the project workforce planning aspects.
TIP The future role of the project manager in workforce development is changing. In a digitally‐driven workplace, project managers are able to make better strategic choices.
In addition to the role of driving professional development, recommendations by the project manager in this potential future transformation, as depicted in Figure 1.1, are changing. There is a highly changing nature to professional development. This is driven by the intersection of the real and digital worlds at the center of it. Future professional development will also shift to a strong focus on creativity and innovation. This is stemming from the dominating projectized way of working. Project managers will be the most fitting leaders to recommend what capabilities are critical to nourish for the future workforce.
Figure 1.1 The Future of Professional Development
Labor Rate Structures
The labor rate structure of the company is critical when staffing projects and estimating the associated manpower costs. The greater the number of pay grades in each functional area, the greater the complexity in determining the labor costs, especially if several pay grades can perform the required activity. Although most companies have four or five pay grades per functional area, some companies may have up to ten pay grades with job descriptions that may or may not overlap. As an example, consider an engineering department with the following pay grades:
Engineering apprentice
Engineering aide
Engineering mathematician/statistician
Engineering technician
Junior engineer
Engineer
Research engineer
Senior engineer
Engineering consultant
Assuming these pay grades are listed in ascending order of importance, the difference in yearly salary between the top and bottom pay grades could be more than $100,000 and yet several pay grades may be qualified to perform a given task.
In a digitally enabled future, this is getting even more complicated. Some of the classical roles that will be easily handled by AI might have a negative or a positive impact on labor rates depending on the types of redesigned future jobs to be done. The increasing shift toward focus on value in projects also adds an important dimension to what will be prioritized in considering adjustments to pay grades and the associated labor rates.
The Role of Contract and Temporary Staff
Companies often find themselves in positions where they have a shortage of resources and, instead of hiring permanent employees, they hire temporary workers. This occurs when:
A company has a need for a specialized skill for a few months and the company does not believe that they will need this skill in the future.
A company has a need for a specialized skill but only sporadically over the next few years. The cost of hiring someone full‐time with this skill is not cost‐effective.
A company has a common activity that requires several engineers. If the company has a shortage of five engineers, then they may hire five temporary engineers to perform this common task.
Temporary workers are hired under a contract that guarantees them employment for a period, usually not less than three months. The temporary workers may find it necessary to pay their own health care costs, taxes, and retirement costs. The contracts usually have a clause that allows for extension of the contract if both parties agree.
Full‐time employees generally dislike temporary workers because they soon discover that the temporary worker may be earning a higher base salary than they are. As an example, consider a worker who is earning $60/hour and discovers that the temporary worker is earning $80/hour. The permanent worker may be upset at this difference because he/she did not consider the fully loaded cost.
