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Team Capacity Planning: Practical Guide

Last updated on
November 27, 2023


How team capacity planning helps development teams?

Team capacity planning is crucial for development teams as it:

  • Efficiently allocates resources: Ensures work is distributed evenly according to skills and availability.
  • Sets realistic deadlines: Helps in estimating realistic timelines, reducing over-promising risks.
  • Improves prioritization: Facilitates focusing on important tasks and managing workload effectively.

Scroll down for some practical tips about team capacity planning.


Team Capacity Planning: Practical Guide


Is poor resource and workload management often resulting in missed deadlines, reduced quality, and the stress within your team? Effective planning is crucial for maintaining productivity and efficiency.

Team capacity measurement offers insights into team capabilities. By that, it improves resource scheduling and supports better decision-making.

Dive into the details of team capacity planning and increase your team’s efficiency.

What is team capacity planning?

Team capacity planning is the process of determining the amount of work a team can handle during a given time period to ensure that the workload is realistic and manageable. The goal of this planning is to maximize the efficiency and productivity of the team while avoiding overcommitment and burnout.

Factors influencing team capacity

Several factors can influence team capacity in a work environment, especially in the context of project management and software development. These factors need to be considered when planning for upcoming projects or sprints to ensure that the workload is realistic and that the team can perform optimally.

Here are some of the key factors that influence team capacity:

Team size and composition

The number of team members available to work on a project.

The mix of skills and expertise of team members, which affects the types of tasks they can perform.

Individual availability

The number of hours each team member can work on project-related tasks.

Part-time versus full-time status, and any other commitments that might limit a person's availability.

Experience and skill level

The proficiency and productivity levels of individual team members, which can affect how quickly tasks can be completed.

The learning curve required for new technologies or systems that team members might not be familiar with.

Work complexity

The difficulty of the tasks or projects at hand, which can impact the speed and effort required for completion.

Team health and morale

High morale and good team health can enhance productivity, whereas low morale and poor health can significantly reduce capacity.

External dependencies

Tasks or decisions that depend on external teams, stakeholders, or vendors can impact the team’s ability to progress.

Tooling and infrastructure

The availability and reliability of tools and infrastructure can limit or enhance a team's capacity to get work done.

Work environment

Factors such as remote versus in-office work, the physical office environment, and company culture can influence productivity.

Organizational support

The level of support from management and other departments, including administrative assistance, can affect team capacity.

Historical data

Past performance metrics, such as velocity for Agile teams, provide a basis for estimating future capacity.

Non-project work

Ongoing support, maintenance, meetings, training, and other non-project work that also requires time and effort from the team members.

Risk and uncertainty

Potential risks and uncertainties, such as staff turnover or changing market conditions, can affect the capacity planning process.

How team capacity planning influences project success

Team capacity has a significant influence on project success. It impacts not only the timelines and delivery of project outcomes but also the quality of work and the overall health of the team. Here are some ways in which team capacity can influence the success of a project:

1. Realistic planning

Accurate capacity estimates allow for realistic planning and scheduling. Understanding the team’s true capacity ensures that timelines are feasible and reduces the likelihood of missed deadlines.

2. Resource allocation

With a clear view of capacity, project managers can allocate resources effectively, ensuring that critical tasks are prioritized and that the necessary skills are available when needed.

3. Work quality

Overloading a team can lead to rushed work and mistakes, impacting the quality of the deliverables. Appropriate capacity planning helps maintain high standards of quality by not overburdening team members.

4. Morale and engagement

Teams with well-managed workloads are more likely to have higher morale and engagement levels. When team members feel their workload is manageable, they are more likely to be satisfied with their job and invested in the project’s success.

5. Risk management

Understanding capacity can help identify potential risks early on. It allows for contingency planning, such as allocating time for unexpected tasks or issues that may arise.

8. Scope management

Team capacity plays a critical role in managing project scope. It provides a basis for agreeing to what can be delivered and helps prevent scope creep from overwhelming the team.

9. Flexibility and adaptability

With a good understanding of the team's capacity, project managers can be more flexible and adapt to changes without sacrificing project outcomes.

10. Continuous improvement

Tracking and analyzing capacity utilization over time can lead to continuous improvement, as teams can learn from past projects and refine their estimates and processes.

How to assess team capacity?

Here is a structured approach to effectively assess your team capacity:

1. Evaluate available time

Calculate the total available work hours of the team for the period in question, considering full-time and part-time staff, holidays, planned leaves, and other commitments.

2. Analyze skill sets

Inventory the skills and expertise of each team member. Assess whether the current team composition aligns with the project requirements.

3. Review historical data

Look at past projects to determine how much work the team has been able to handle. Metrics such as velocity in Agile methodologies can be particularly useful.

4. Account for non-project time

Deduct time spent on non-project activities such as meetings, training, and administrative tasks to get a clearer picture of how much time is actually available for project work.

5. Assess work complexity

Consider the complexity of the upcoming work. Complex tasks will require more time and effort, thus reducing overall capacity.

6. Determine work efficiency

Evaluate how efficiently the team works together. Team dynamics, communication, and collaboration tools can all impact efficiency.

7. Use capacity planning tools

Employ capacity planning software or tools to help visualize and calculate team capacity more accurately.

8. Consider external factors

Take into account any external dependencies or factors that could affect the team's capacity, such as reliance on other teams or fluctuating market conditions.

9. Estimate effort

For each project or task, estimate the effort required in terms of hours or story points. Be realistic about how much work can be done in the available time.

10. Perform a gap analysis

Identify any gaps between the current capacity and the project needs. Determine if there is a need for additional resources or skill development.

11. Consult the team

- Involve the team in the capacity assessment. They can provide insights into potential roadblocks and the time needed for tasks, based on their experience.

12. Continuous monitoring

Keep assessing the team's capacity on a regular basis as projects progress and conditions change.

13. Prepare for variability

Build in a buffer for unforeseen events and tasks that may arise unexpectedly, which could impact the team’s capacity.

14. Seek feedback

After project completion, gather feedback to understand the accuracy of your capacity planning and to identify areas for improvement.

Effective team capacity planning

Effective team capacity planning is an essential part of project and resource management, ensuring that the right people are available to work on the right projects at the right time. Here's what effective team capacity planning typically involves:

Understanding project requirements

Begin with a clear understanding of the project's scope, deadlines, and deliverables. Knowing what needs to be accomplished helps in determining the required capacity.

Assessing available resources

Evaluate the skills, availability, and performance of current team members. Take into account vacations, public holidays, and potential sick leaves.

Estimating workloads

Estimate the effort required for tasks and projects. Use historical data and team input to make informed estimates.

Matching skills to tasks

Align team members' skills and career aspirations with project tasks to maximize both satisfaction and efficiency.

Planning for contingencies

Always incorporate buffers for unexpected delays or emergencies. Flexibility is crucial in capacity planning.

Using tools and software

Employ project management and capacity planning tools to schedule tasks and manage workload efficiently.

Communicating effectively

Ensure that everyone on the team understands their roles and responsibilities, as well as how their work fits into the bigger picture.

Monitoring and adjusting

Continuously monitor the actual workload against the plan and adjust as necessary. Be proactive in managing and reallocating resources when needed.

Incorporating feedback

Use feedback from team members about capacity and workload to improve future planning.

Reviewing and improving processes 

Regularly review team workflows to identify areas for improvement. Simplify processes where possible to reduce time wastage.

Strategies for team capacity planning

Team capacity planning involves a blend of strategies to ensure that a team’s workload is balanced with its available resources over time. Here are key strategies to implement effective team capacity planning:

1. Accurate resource forecasting

Predict team workload based on incoming projects and maintenance work. Forecast the number of people needed and the skill sets required for future work.

2. Historical analysis

Use historical data on team performance, such as past velocity or completed work units, to inform future planning.

3. Skill mapping

Create a matrix of team members’ skills and match them against current and upcoming project requirements to identify any skill gaps or surpluses.

4. Work prioritization

Identify which projects or tasks are of highest priority and allocate resources accordingly.

5. Buffer allocation

Include buffers in your planning for unexpected events or tasks that take longer than expected.

6. Agile resource management

Adopt an Agile approach where the team works in sprints, allowing for flexible resource allocation based on the priorities of each sprint.

7. Cross-functional training

Encourage cross-training among team members to increase flexibility and cover potential skill gaps.

8. Effective communication

Maintain open lines of communication for resource needs and availability, as well as any changes in project scope or timelines that might affect capacity.

9. Regular reviews and adjustments

Continually review capacity plans and make adjustments in response to new information or changes in project scope or resources.

10. Workload balancing

Balance workloads across the team to avoid overburdening individuals and to prevent burnout.

11. Realistic estimation

Estimate work realistically, considering the complexity of tasks and the actual performance of the team, rather than ideal or theoretical performance levels.

12. Dependency management

Manage dependencies within and across teams carefully to avoid delays that can affect capacity.

13. Use of tools and technology

Utilize project management and capacity planning software to track, visualize, and manage team capacity.

14. Scaling teams up or down

- Be prepared to scale your team size up or down according to the workload, considering options like hiring, overtime, or reducing workload through scope negotiation or postponement of less critical tasks.

15. Contingency planning

Have a plan in place for how to handle situations where capacity is suddenly reduced, such as an employee leaving or falling ill.

16. Preventive maintenance

Ensure that team capacity accounts for time to handle technical debt and maintenance work that can prevent bigger issues down the line.

How to enhance team capacity?

Enhancing team capacity involves strategic initiatives to improve the efficiency, skills, and overall productivity of the team. Here’s how you can go about it:

Provide training and development

Invest in the continuous professional development of team members to improve their skills and competencies.

Optimize processes

Streamline workflows and processes to remove bottlenecks and redundancies, making it easier for the team to get work done efficiently.

Improve tools and technology

Ensure the team has the best tools for the job, including project management software, communication tools, and other technologies that can automate routine tasks.

Enhance communication

Establish clear and effective communication channels to ensure everyone is aligned and can collaborate effectively.

Delegate effectively

Make sure tasks are assigned based on individuals’ strengths and capacities, allowing team members to work on projects that best fit their skill sets.

Foster a collaborative culture

Encourage a team environment where knowledge sharing and mutual support are standard practice.

Hire additional resources

If the current team is consistently overburdened, it may be necessary to hire more staff or outsource certain tasks.

Promote work-life balance

Ensure that team members have enough time for rest and personal pursuits, which can reduce burnout and increase productivity when they are working.

Implement Agile practices

Adopt Agile methodologies, which can enhance team capacity by focusing on iterative progress, flexibility, and continuous improvement.

Encourage autonomy and empowerment

Give team members the authority to make decisions about their work, which can increase their sense of ownership and motivation.


Encourage team members to learn different aspects of the work or project so they can fill in for each other as needed, which increases the flexibility of the team.

Prioritize and focus

Help the team to understand priorities, enabling them to focus on what's most important and avoid spreading themselves too thin.

Build a strong team morale

Recognize achievements and celebrate milestones to keep morale high and encourage peak performance.

Regularly review and adapt

Continuously monitor team capacity and workload, and be ready to adjust plans and strategies in response to feedback and changing circumstances.

Team capacity for Kanban teams

For Kanban teams, which focus on lean principles and continuous workflow, team capacity is understood a bit differently compared to teams using other methodologies like Scrum. 

Instead of planning for a set period or iteration (like a two-week sprint in Scrum), Kanban teams look at capacity in terms of work in progress (WIP) limits and cycle time.

Work in Progress (WIP) limits

These are constraints set by the team on how many tasks can be in a certain stage of the workflow at any one time. By limiting WIP, teams aim to reduce multitasking and context-switching, which can lead to inefficiencies and bottlenecks. 

WIP limits help teams focus on completing current tasks before taking on new work, thus optimizing the flow and ensuring that team capacity isn't exceeded.

Cycle Time

This measures how long it takes for a task to move from the beginning to the end of the workflow process. By analyzing cycle times, Kanban teams can gauge their capacity in terms of how quickly they can turn around tasks. A shorter cycle time typically indicates that a team has capacity to take on work, while a longer cycle time may suggest the team is operating at or beyond its capacity.


This is the rate at which the team completes work items and is a direct reflection of the team's capacity. Tracking throughput over time can help teams forecast future performance and make adjustments to WIP limits or processes to improve flow.

Capacity in Kanban

In Kanban, capacity is not about maximizing the amount of work done but rather about finding a sustainable pace that maximizes value delivery and minimizes waste. Kanban teams adjust their capacity by:

  • Analyzing the flow of work and identifying bottlenecks.
  • Continuously improving their process to increase efficiency.
  • Balancing demand with the team's throughput to avoid overburdening the team.
  • Measuring and managing capacity in Kanban is a dynamic process that relies on real-time data and feedback to ensure that the team's workload is sustainable and that the workflow is as efficient as possible.

Team capacity for Scrum teams

For Scrum teams, team capacity is closely tied to the iterative development cycle known as a sprint. Scrum teams use their capacity to plan how much work they can commit to completing during a sprint. 


Scrum teams often use a metric called "velocity" to measure the amount of work they can handle in a sprint. Velocity is calculated based on the number of user stories (or story points, which are a measure of effort required to implement a feature) the team has completed in previous sprints. By looking at the average velocity, a team can forecast how much work they can realistically achieve in the next sprint, thus informing their capacity planning.

Sprint Planning

During sprint planning, the team assesses their capacity by considering the availability (factoring in vacations, public holidays, and other commitments) and by using their velocity as a guide. Team members often break down user stories into tasks and estimate the hours needed to complete each task, ensuring that the total is within their capacity for the sprint.

Daily Scrum

Team capacity is also monitored throughout the sprint. Daily Scrums are short meetings where the team discusses progress and any impediments that might affect their capacity. This allows them to make adjustments early on to ensure they stay on track to meet their sprint goals.

Sprint Retrospective

After the sprint ends, the team reflects on their performance during the Sprint Retrospective. They discuss what impacted their capacity—both positively and negatively—and identify ways to improve in the next sprint. This continuous improvement is a core principle of Scrum and allows teams to become more accurate in their capacity planning over time.

In Scrum, understanding team capacity is vital for committing to a realistic amount of work, maintaining a sustainable pace, and delivering incremental value to stakeholders with each sprint. It's a balance between pushing for productivity and ensuring quality without overloading the team.

Next steps

Measuring team capacity in software development is crucial for successful product development and scaling. It provides insights into a team's capabilities, helping with resource planning and workload management. Optimizing this metric helps in improved productivity and predictability. However, it's essential to adjust metrics to align with product and business goals depending on a specific team and their goal.

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Olga Gierszal
Software Engineering Editor

Software development enthusiast with 6 years of professional experience in the tech industry.

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