By Dan Strayer

In January, PM News came out with a series of predictions from several guest prognosticators as a way of getting you ready for the new year in project management. Sometimes, predictions have the prognosticators channelling their inner-Nostradamus. Others can end up looking like the record executive who turned down The Beatles, with these anti-prophetic words: 'Guitar groups are on the way out'.

We decided to go back to the sources of these predictions, and find out if such statements held up midway through 2008, or whether we can expect such predictions to be changed, altered slightly or altogether discarded for the next six months.

O'Neill: Uncertainty in economy remains a threat

One of our contributors was Peter O'Neill, a senior instructor with ESI International, who wondered about a possible 'Increased Uncertainty in the PM Arena in 2008?' Of particular concern was how economic concerns 'posited caution on the part of many company and government spending plans.'

Six months on, O'Neill still has reasons to be concerned.

'There is now widespread agreement that the economy is heading for a depression,' he said in an e-mail to PM News. 'This will have inevitable knock-on effects on consumer and government spending - and both the construction and finance sectors are already reducing headcount significantly. So we can expect numerous projects in almost all sectors to be cancelled, shelved or scaled down.'

O'Neill believes that the level of uncertainty in the project management trade can be traced to consumer, financial and business confidence. And while O'Neill thinks the energy industry may be the only sector to see a significant upswing in production and project staffing, teamwork between both PMs and senior management will be essential.

'The impact (of lack of confidence) on projects will be widespread with the notable exception of the energy industry, where unrealistically high oil prices will prompt expansion of both traditional and replacement energy source projects,' he wrote. 'Project managers and their employing organisations will need to continually reassess project business case estimates, review their risk assessments and responses and prepared to significantly adjust their project prioritisation and portfolio management strategy.'

Burigo: PRINCE2 continues to thrive

Joanna Burigo is Marketing Manager for Maven Training Limited. In January, she forecasted 'a sharp rise in the adoption of PRINCE2™ around the world. Helped by the imminent release of PRINCE2™ translations into German, French and Polish, more international organisations will adopt PRINCE2™ than ever before.' Six months later, Burigo, who speaks on behalf of the Maven Training staff, thinks the prediction has held up well in spite of the supposed recession.

'Although economic conditions in the UK and around the world are getting increasingly tough, we're still seeing growing interest in PRINCE2,' she said. 'We think this is because when organisations face difficult markets they must increase their efficiency while keeping costs down. Good project management processes help them to do this in a cost effective way. They don't need to invest lots of time in trying to find the best way of doing things - it's already prepared for them as a Best Practice Method.'

Burigo expands upon the notion of company investment in the months ahead.

'Another trend we're seeing is organisations investing in their biggest asset - their people. They understand that the time and money spent on training their project managers is an effective way of getting ROI (return of investment). Their employees benefit from time out of the office spent thinking about how they do things, and when they get back to work they're able to put the practical advice that PRINCE2 offers into practice straight away.'

'We think these two factors will mean that PRINCE2 adoption around the world continues to rise and won't be affected negatively by the economic climate.'

By John Thorpe

Just when you thought it couldn't get any worse, the management team have reacted in a traditional "batten down the hatches" approach and put an immediate freeze on all headcount! You need essential resources to enable delivery of your project and they are not available internally, so what can you do?

As pointed out in the article "Project Managers on Top", the first step is to review your project and then build a solid case around why you need this resource and the implications of not getting the desired outcome. You then probably need to enlist the help of your HR team or resourcing manager to look at the options around "flexible resourcing".

The headcount freeze is not about stopping you from delivering your projects - the issue generally revolves around a business not wanting to burden itself with additional fixed costs that impact the balance sheet immediately and also have longer term implications with regards to the total cost of employing people. So flexible resourcing is an ideal answer as it allows you to get the right person in to deliver, at a known cost, with no long term impact.

So who are these people? Traditionally they are Contractors, of course, who will be engaged on a day rate who you can assign to deliver packages of work over an agreed timescale. The contractors will typically have a limited company or an umbrella company and invoice you for the work completed, thus shifting the cost on the balance sheet. In most instances, you pay a level of premium for their services, as they are carrying the risk and administrative overhead associated with their operations.

Other options are temporary workers, those who still have the desired skills but have no desire to set up and operate a limited company or manage their affairs through an umbrella organisation. They are happy to work and operate through companies such as Arras People, who manage their affairs and take care of their PAYE. My own view is that many people still think of "Temps" as being people who deliver administrative roles, cover for sickness, and operate at the lower end of the pay scale. Our experience over the past four years would suggest that this is not the case, and Project Management professionals at all levels can be engaged in this manner.

The biggest challenge we see is when people try and set rates for both contractors and temporary workers. Should they be market driven or linked in some way to current salary bandings so as not to upset the permanent workforce? The answer is probably a mix of the two, and understanding the subtle differences is important when setting expectations.

When considering a contractor, it is important to remember that you will be paying a day rate (including or excluding expenses), plus the agent's commission. The contractor has to take care of National Insurance, Income Tax, employment benefits, etc., so their rate needs to reflect this. It is important that you consider the "real" cost of employing somebody in a permanent role to undertake a task before working out the size of the pot that you can afford to spend. Simply dividing a salary of £50,000 by 52 weeks and then by 5 does not give an equivalent day rate! You need to find out the "real" cost of employing that person, which include holidays, Pension contributions, company car, bonus and any other benefits that regular employees may be eligible for in that role. Not to be forgotten: Employers National Insurance.

Once you have that number, you need to reflect that you are engaging a company that will be taking on these hidden costs and, most importantly, acting flexibly in terms of potentially short durations and impacting your "risk/opportunity" associated with your project delivery. Once these are all considered, you can see the relative cost and work out a top price that you would be willing to pay.

When considering a temporary worker, it is again important to view the "real costs" associated with that role you are looking to fill, and once these are all considered you can see the relative cost and work out a top price that you would be willing to pay. The key difference here is that you will be paying a fee to the "agency", which does not directly reflect the rate that the individual is earning through PAYE. The Agency will include at least four elements which make up the rate charged to you! These will include: Gross pay for the temporary worker; Holiday pay for the temporary worker, which must be at a rate equivalent to 24 days per annum at this time; the employer's National insurance due of the temporary workers wage, and; a margin for running the engagement.

So flexible resourcing can help in these tough times and once again being prepared helps you understand how the costs will fit into your model. Market resources will of course always have some impact especially if you are looking for scarce skills as will the quality of your resourcing partner who should be able to work with you to deliver the appropriate resource at the best price!