Unlocking the Power of Headcount Data in your Board Meetings
Table of Contents
Headcount is the largest cost center, and trying to wing it with answers in the board meeting will reduce your credibility, and produce painful board meetings. Whether you’re using headcount365, or a spreadsheet, here are 4 key questions you need to be prepared for during your board meeting.
Question 1: Is headcount blocking growth?
A key indicator as to whether or not headcount will be a pain point in your board meeting is whether or headcount is blocking revenue growth, production growth, launch speed, or any other metric that has to do with hitting the targets you’ve set for your board.
Key Data Points:
Headcount Target to Goal: If you’re missing in other parts of your business, one of the first questions is if you have the resources you need to hit those goals. If you do, they want to know about how your managing performance or other external factors. If you don’t, you’ll have some explaining to do.
Late Hires: How many people have not started on the time you initially put on your forecast? Are they revenue generating? What’s the impact? You’ll have to answer all of these questions, not only as an explanation of events, but to help them manage the forecasts for future performance.
Attrition: If people are leaving (especially revenue generators) you need to be able to articulate the gap in skills, production and/or revenue between the time they left and their replacement. Forecasting attrition, knowing your time to fill for all backfills, and showing relevant salary & revenue ramp data will help you build comfort in managing the uncomfortable
Value: Covering these 3 points with objective data will earn you more credibility than trying to subjectively explain whats happening with your headcount. Having a forecast for how attrition or hiring performance impacts your production or revenue allows you to better set & hit goals with your board.
Headcount365 not only gives you this data, it will help you determine the cause of headcount underperformance by capturing all the activity of your team in one system, leveraging our “Requisition Intelligence” AI to tell you why it happened in the first place.
Question 2: Does headcount cost too much?
Understanding the financial implications of headcount is crucial for managing burn rate and aligning with the P&L. This includes not only the salaries of the employees you’ve hired relative to the budget, but how soon you have them start, and the cost burden of an individuals employment. Splitting a 100k role into 2 50k roles is not the same money, and details like this can become a problem with scale.
Key Data Points:
In-Year Salary Variance: Evaluate the impact of start dates on fiscal year spend. If you’re hiring ahead or behind the start dates you forecasted on your plan, you can activate this OPEX elsewhere in the business. Having a real-time look at in-year spend is one of the key benefits of headcount365.
Annualized Variance: Assess the impact of salaries on the annual OPEX. Annual Spend = Burn. This will be one of the key focal points of your board. That being said, just producing the number won’t help you navigate the meeting. You’ll need to articulate why costs have changed, and what you’re doing about it.
Burden Costs: Differentiate the financial impact of varied role costs, such as comparing a single $100,000 role to two $50,000 roles. This is most impactful for expense heavy businesses, that require equipment or materials investments per headcount.
Value: Getting head of cost variance will help you navigate your financials. Understanding the trends of your headcount spend through a historical lens will give credibility to future forecasts you deliver to your board.
With Headcount365, executives can link every requisition's financial history directly to the FP&A system, providing a clear view of the cost implications and ensuring more accurate financial planning and reporting.
Question 3: Have you identified the key problems?
Headcount changes happen, but the CEOs who get hit the hardest in board meeting have no idea why. From doing this process for years, both as a headcount leader and within venture capital, there are 4 main reasons why businesses are missing with headcount & hiring.
Key Data Points:
Recruiting Capacity: Assess if the recruiting team had sufficient capacity to meet the demand. This matters both from the aspect of your initial planning, as well as whether or not your recruiting team could flex with the changes to the business.
Hiring Manager Plan Variance: Assess how the changes to your hiring plan by hiring managers have impacted your ability to meet demand. Are they adding or changing the plan, interrupting recruiting performance? Empire building? Individual changes may not mean much when isolated, but they add up.
Business Planning Issues: Assess if headcount isseus were a result of an inaccurate plan. This doesn’t have to be bad by the way. You could have blown your sales plan out of the water and are behind on AM/CS hiring. Identify the reasons why the plan changed and deliver an update as to how you’ll adapt in the future. Build out a new main forecast and get more accurate with your scenarios. Boards will appreciate this rigor.
Recruiting Performance: If you had everything right, but the recruiting team missed the goal, analyze your funnel & production performance. Show up to a board meeting with a plan to get from the recruiting capacity you’re at today, to the one that will meet your goals in the future.
Value: If you can identify the problem you can fix it. You can articulate the time and cost between you & a solution and MOVE ON in the board meeting. There’s nothing more frustrating that putting together a board deck to cover your entire business only to get caught up on a solvable problem like headcount.
Headcount365 provides the context for these variances, transforming board discussions from subjective narratives to objective, data-driven action plans. This approach allows for a more informed dialogue about improving headcount performance and, consequently, business outcomes.
Question 4: What are you doing about it?
When headcount is a critical blocker to a company's revenue growth, it’s imperative to understand why headcount goals were missed and ensure it doesn't happen again. Here are some key actions you can take to improve the headcount performance for your next board meeting
Action Items:
Improve your funnel: Investments to improve the funnel volume and conversion will improve efficiency across all teams. Improve branding, advertise jobs to customers, or run a referral program to improve top of funnel. Switch to competency based interviews to improve funnel conversion rates. Evaluate your compensation strategy to improve close rate.
Increase Recruiting Capacity: Adding recruiters, agencies or RPOs will help unblock hiring from the business growth. Map this recruiting capacity against the demand to deliver a predictable hiring process to your board
Update Forecasts: Leverage previous headcount plans to inform future scenarios. Work backwards from scenario plans to figure out when you need to open roles to make a hire on time. If sales unlocks customer support headcount, but the onboarding date is sooner than the time to fill for that role, you’ll be in trouble.
Process to manage variance: Implement an approval process that drives accountability for changes that impact your ability to fill on time or budget. Report on the number of changes & use them as a KPI for fixing
Value: Set a target, have a plan, move on. This will not only give them confidence in your ability to solve the problem, but you’ll be able to talk about bigger things than headcount problems during the meeting.
Headcount365 integrates ATS and HRIS data to uncover the reasons behind missed headcount goals. By tracking every change, its origin, and its impact, both finance and recruiting teams can investigate and report with objective data, eliminating the ambiguities of spreadsheet-based tracking.
Conclusion
Headcount data is a powerful tool that, when properly leveraged, can provide critical insights for board-level decision-making. By using a headcount management system like Headcount365, companies can transform their headcount data into actionable insights, driving better business performance and strategic alignment. Unlock the full potential of your headcount data to empower your board with the insights they need to steer your company towards success.
