The one thing you can’t get wrong when you cost a project

A key risk of many projects is they don’t make sure they have enough staff to deliver what they promise. I’ll tell you why this is, and how you can change your approach to better manage your risks.

There are lots of things that can turn out to be incorrect when you estimate how much a project will cost. Priorities change once things start. People change. Emphasis changes. Costs aren’t what you expected. Different skills are needed. Plans change. And so on.

There’s one thing that’s always a red flag to boards and to funders: adding more staff once you’ve started.

  1. Reducing staff costs is invariably seen as a sign of good management (irrespective of whether this is true).
  2. Changing staffing structures – fairly normal, particularly in a long-term programme.
  3. But adding additional staff – and often moving money away from delivery to fund them – almost always raises a red flag. Funders will ask why these costs weren’t right – while they often don’t question other substantive finance/budget/planning changes – and may push back on you.

So there are two pieces of advice I can give you:

  1. Don’t skimp on staff – make sure you have enough people to deliver what you promised. There is nothing worse than promising to deliver a plan when you know you don’t/won’t have the resources to delivery it.
  2. If you don’t hire all the staff you budgeted for (or don’t spend all your staff budget), and you move these savings into service delivery, you will be well thought of – and it’s unlikely anyone will ask you why your initial staffing costs were over-generous.

Suprisingly, hiring contractors if you don’t have enough staff or staff with the right skills is often looked on kindly. If there’s anything I can do to help you deliver your projects, please get in touch.

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