What Can Resource Managers Learn from a Lack of Pilots?
Over the past number of weeks, airlines have openly discussed their pilot shortage challenges. Specifically, that pilots were laid off during COVID when demand for air travel was low and now that demand is surging, flights need to be canceled due to lack of staff.
As project resource management geeks, we could not help but relish in the exploration of this issue. Mostly because project based professional services organizations face the constant challenge of resource planning and allocation while managing projects.
And now that project demand is increasing, agencies, consultancies and IT team are also trying to effectively manage resources across entire project portfolios.
The Resource Shortage Explained
In October of 2020, American Airlines furloughed 1600 pilots because no one was flying and everyone was doing their best to stay home. One of the requirements to maintain a pilot’s license is to keep up with continuing education training which also wasn’t happening. This has created a supply issue where many of these pilots, according to American Airlines Pilot Dennis Tajer, will not be able to fly again until August of 2021 or beyond. The impact of the shortage is that American Airlines has canceled 300 flights across the US.
What Does a Pilot Shortage Have to do with Project Resource Management?
Tons! The shortage of pilots is the picture-perfect example for all project-based resource managers to learn from. There are common atomic components to big picture resource scheduling and resource allocation; projects, budget, resources and quality. To utilize resources effectively, they all must hang in a balance with each other.
So, lets translate the pilot shortage to project based professional services:
If we thought of all flights as projects, the pilots and stewards as resources, and quality as a great customer experience on the flight, we have the makings of an enterprise resource management example.
As the quantity of projects decreased from March to October of 2020, American Airlines had to optimize for budget (over quality, resources or projects). In short, they needed to deal with resource overload across their projects.
The result? They laid off 1600 resources to equalize the supply and demand curve in the business. To maintain project profitability, and ultimately the longevity of the business, it was the right thing to do. However, where they got it wrong was with their forecast.
Where Most Organizations Get Project Based Resource Management Wrong
If American Airlines had a good enough forecast and a good enough expectation on number of projects, they wouldn’t have been in this situation. The reason to say “good enough” is that any forecast is exactly that — a reasonable estimate of what will happen.
The way this works in professional services organizations includes looking at a weighted pipeline of projects and using that data to understand skills and hiring needs. By modeling an expectation on projects and resources, that data can be overlaid against in-flight (pun intended) projects — providing a more reliable view of the resourcing future.
Had the airlines looked at this forecasting data they would have bridged the resource gap well before the demand issues made an impact.
How to Fix Project Resource Management?
All Airlines have some sort of ERP (enterprise resource planning) platform in place. The challenge is that ERP is good for inventory management, not human resource management. That is where PSA or Professional Services Automation comes into play — especially resource management software.
PSA software helps to manage and model the human element of services-based businesses. The best place to start looking at solutions for this challenge is here. Understanding the difference between Project Management, Portfolio Project Management and PSA is key to solving the resourcing problems all services organization face.
Another place to start is to watch this webinar on resource management best practices. Either way, we are here to help if and when you need! Happy project planning!