Staffing Ratio Matrix: Optimizing Workloads Across Functions

One of the most difficult challenges our clients face is determining the optimum balance of skills on a cross-functional development team. Getting the right balance of functions on the team – such that it is supported but not starved for the right skills – is a challenge for many companies. A staffing ratio is the number of personnel in one function divided by the number of personnel in another. In product development, the base number used to calculate the ratios is often the headcount of Design Engineers since they usually represent the function with the largest number of team members. The numbers of personnel in other functions are then compared with Design Engineers in order to measure the balance of human resources on the team.

The Staffing Ratio Matrix contains a summary of all the projects in a given function, charted against the key functions found on a cross-functional team. This matrix provides insight into which individuals are overloaded and where functional bottlenecks are likely to occur.

Benefits

  • Makes engineering more efficient by eliminating functional shortages
  • Improves project outcomes because tasks are assigned to qualified workers
  • Offers a quick way to cut through politics whenever a manager asks for more people
  • Assesses quickly who is overloaded, and what functions are overtaxed
Staffing Ratio Matrix
Staffing Ratio Matrix

The columns consist of a list of the names of the team members for each function for the projects on which each individual is working. Each row contains the staffing for a project. The matrix should contain all the projects in your organization.

You can analyze and assess this summary in order to reduce overtaxed functions. The first step is to see how overloaded your individuals are. Often the best producers are loaded with an increasing number of projects until they burn out.

The second step is to compare the average ratio in a given function to industry benchmarks. Our research reveals that the average ratio is 1.0 product manager per product family (or major product), and the average ratio for a project manager is 1.5 projects (a large and a small project).

Our interest in staffing ratios started with a benchmarking project for a Fortune 50 company that wanted to assess best practices in new product development. We benchmarked over a dozen companies all over the world and found that the most successful firms had one dedicated product manager per major product. Furthermore, these product managers focused only on inbound marketing – incorporating the voice of the customer into the organization. If the organization has more than one major product per product manager, it is very likely that these projects will suffer delays because of incomplete and changing definitions.

Similarly, others have performed research for the project management function and found that the effectiveness varied based on the number of projects they managed. The curve peaks between one and two projects. We found the optimum workload for a project manager is one large project and one small project. This allows the greatest throughput. Whenever there are activity gaps in larger programs, the project manager can turn their attention to smaller ones.

The recession has caused many organizations to let go of many people in non-engineering functions, since they are regarded as support. As business recovers and new projects begin, they often lack the key resources that surround engineering (e.g. product management, project management, user experience, and quality). A simple tool that tabulates staffing ratios can help managers restore balance and execute projects more effectively.

Which Business Problems Does the Tool Solve?

The Staffing Ratio Matrix helps to increase throughput because it ensures you have skilled individuals working on key deliverables rather than engineers filling in on tasks that are outside of their skill set. That’s a double win because you are dedicating your engineering staff to engineering tasks, while the team executes non-engineering tasks better since people who have the right set of skills are doing them.

In addition, you can create these efficiencies with no increase in budget. For example, if you re-deploy a small number of open requisitions from engineering to these critical functions, you can solve most of the imbalance problems. If you transfer some engineers who would like to try different functions, you can improve the balance and create a better environment for employees who wish to expand their experience.

What Else You Should Know

There are many risks in applying this best-practice method since skill levels, job definitions, and projects vary so much in size and complexity. Remember to factor in all of these variables. When you are setting benchmarks on your own, the same concerns apply to the benchmark targets. For example, in benchmarking Japanese consumer electronics companies, the best practice is one product manager per product. Their definition of product manager is limited to inbound marketing. It does not include promotion, advertising, or sales force management. If you look at headcount ratios but ignore the job descriptions included in the benchmark findings, you will solve only half the problem.