How capital project owners can get just-in-time talent for their teams

About $130 trillion is expected to flow to capital projects between 2022 and 2027—nearly 70 percent more than over the previous five years. At the same time, the external environment is facing some of the strongest headwinds in half a century: the nature of capital projects is changing, capital and input costs are increasing, supply chains are disrupted, and the pressure to deliver carbon-neutral projects brings new challenges.

Under these circumstances, it is more important than ever for project owners to assemble the strongest possible teams—no easy task given the increasing shortage of qualified and experienced professionals.

The right talent at the right time at the right cost

A world-class project owner team consists of the right number of people with the right expertise and experience deployed in every project function at every point during the project.

The traditional industry approach to assembling owner teams usually relies on the past experiences of project executives. This can lead to an over- or underestimation of the actual capacity needs required for each project function. It is challenging—even for the most experienced executives—to accurately determine the right team composition given the range of factors involved in capital project developments.

Ultimately, creating a best-in-class team mobilization schedule is an analytical exercise that is driven by project type, complexity, schedule, contracting model, execution plan, and an understanding of key project risks. The combination of these factors dictates the activities an owner team must perform throughout each stage of the project.

Once owner activities are fully mapped and plotted on a project timeline, the only thing needed to define the required number of full-time equivalents (FTEs) is a benchmark-driven productivity factor for each activity, for example, the number of engineering work hours required to review, comment, or approve an engineering drawing. The result of such modeling is a mobilization and demobilization schedule that precisely matches project parameters and requirements.

Reaping the fruits of an analytical approach

Such an analytics-based approach to organizing project owner teams can completely change the conversation from tactical arguments to strategic workforce planning. Instead of project managers and HR managers wasting time debating the number of FTEs needed for a given project function, they could discuss aspects that add more value, like the substantial difference in workforce requirements for various contracting models.

For example, a project worth $1 billion with an engineering, procurement, and construction (EPC) lump sum turnkey (LSTK) contract may need 70 people during the execution stage, while the same project may need 250 people in an owner-integrated setup. Using an analytics-based approach for portfolio modeling is another example, enabling project owners to determine fluctuations in workforce requirements and providing the right analytical basis for discussions about resource availability in relation to project execution timelines.

Increasingly, firms are starting to recognize the value of this analytical approach and are harnessing modeling tools to organize project owner teams.

For example, a global mining company decided to take a data and analytics approach to team planning when faced with a substantial increase in capital expenditure activity, amounting to more than $15 billion in portfolio projects over the next ten years.

The company used an advanced analytics model to build a long-term view of the size of the team required to deliver every project in the portfolio. Doing so helped the organization determine that it would need three times the size of its current owner team—and a strong central project management hub—to deliver its capital expenditure portfolio. This prompted the company to change its hiring, onboarding, and development strategy to successfully build the capacity needed.

A global oil and gas player used a similar analytics approach to build a head count estimate for its $10 billion program of onshore and offshore projects. In doing so, the company realized it could demobilize a quarter of its team during the final stages of program delivery, freeing up capacity to support other projects. A bird’s-eye view of scale and complexity, contracting model, timeline, and budget allowed the company to develop a dynamic staffing approach that led to the most efficient deployment of a smaller group of project management professionals than would otherwise have been possible.

For both these companies, a data-led approach took the guesswork out of assembling project teams and supported project owners to meet their objectives with the right size team and skill sets.

As pressure mounts to deliver capital projects, this type of analytics- and data-based approach to dynamic team sizing could enable organizations to proactively develop a solid plan for their upcoming investments. This includes more-accurate planning of head count, solidifying hiring, upskilling their workforce in a tightening labor market, and a more strategic approach to project portfolio sequencing and project delivery models.

You can experience a demo version of McKinsey’s recently developed owner team planning tool here.

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