Research reveals that only 15 percent of C-suite executives can accurately measure business capacity – defined as the volume of work that can be handled by an organisation. Contributor Jonathan Corrie, CEO – Precursive.
The research was conducted to address the common misconception that adding more people to the workforce is necessary a means of filling gaps in business capacity. The findings revealed that over 70 percent of respondents would first make changes to their ‘People’ if they considered capacity problems to be detrimentally affecting their business.
It’s a statistic that reveals one of the most prominent issues in business capacity planning: the majority of decision makers, by default, turn to people when trying to fix a capacity issue because they are not yet unaware that inefficiencies and capacity gaps can only be solved by technology and a review of wider business processes.
According to research from PwC, 77 percent of CEOs view skill resourcing as a significant issue for their business, with the ability to accurately manage and measure staff capacity against utilisation being crucial for the profitable delivery of services. Despite this, Precursive’s research found that 58 percent of business leaders are still using Excel spreadsheets to forecast capacity issues, leading to inefficient workforce management and poor allocation of skills.
Perhaps most surprising, is that the vast majority of business leaders (95 percent) rank capacity in the top three when it comes to operational activities that most impact a business. This shows a clear disconnect between existing capacity planning practices, and the general view that optimal capacity planning is central to business success.
Furthermore, while 57 percent of business executives do plan for the unexpected by incorporating ‘wiggle room’ into their capacity planning, half of these executives admitted to having no formal process in place to monitor this, and not one was able to say they had checks in place to ensure ‘wiggle room’ was being continually built in to planning.
Precursive’s research reveals that a large proportion of businesses are either over-utilising staff, even during peak periods affecting staff retention, or under-resourcing. Both are detrimental to the modern business, but with the correct resource management technology in place, capacity can be accurately managed within the existing workforce.
These latest findings from Precursive align with the company’s ongoing investigation into the core capacity planning challenges that UK and international businesses face. These challenges, amongst others, also include the impact that resource planning and workforce management has on client satisfaction, opportunity development, employee engagement and staff turnover. Precursive wanted to unpick the capacity metric to highlight whether it is being actively managed for the benefit of the workforce and truly at the forefront of planning and deliverables.
Jonathan Corrie, CEO at Precursive, comments: “We’re pleased that our research has highlighted the need for business leaders to better understand capacity management. With many using outdated methods for managing capacity, how can the same executives expect to accurately forecast and hit utilisation targets without an intelligent, in-depth view of the workforce? The problem is becoming increasingly detrimental for modern businesses, whether they realise it or not.”
Corrie continues: “Businesses are seeing the benefits brought by FinTech and HR Tech, but to date, OpsTech been overlooked. 100 percent of business managers feel that company and personal objectives are impacted by capacity, and our findings illustrate that optimising resource planning will only be achieved with advanced, real-time technologies. Using technology to accurately reveal capacity gaps in the existing workforce will enable businesses to create a more agile and more efficient workforce without wasting additional revenue on hiring unnecessary staff.”