A Leader’s Guide to the Headcount Waterfall Template + Free Download
Table of Contents
A headcount waterfall report is a high level diagnostic of headcount providing leaders with a real-time pulse on the organization’s health. However, its real value lies in your ability to extract actionable insights & use them to advocate for changes to the business.
The value to people teams, talent leaders & the company
The headcount waterfall report tells you if there needs to be an investment in people operations. If you’re fighting for budget for more recruiters, or to build a better culture to prevent attrition, this is the first stop in convincing executives an investment in people will have a high ROI. While it’s not the only report to do so, it’s a great conversation starter given the simplicity & clarity of message.
Here’s why:
A new start is not productive on their first day. Sellers have ramp time. Engineers need to learn the codebase. Recruiters have to build a pipeline. In the workforce planning meeting, this is often forgotten.
Backfills create gaps in production. This one’s seems pretty obvious, but in the workforce planning meetings, you’d be surprised how production targets factor in exits. .
Meeting production & revenue goals takes people. No matter what the business, the industry or product, the business needs people to execute work. If you’re not hitting the raw headcount numbers needed to meet production goals this report is the first top (And usually the first slide in my QBR/ABR)
Executive insights from the waterfall report
In most cases, this report is a context builder to align the executive team listeners around generalized people team performance. Once everyone understands the setting, you can continue on to either highlighting wins, or talking through opportunities.
Net Headcount Growth: Is Your Company Growing or Shrinking?
The most basic yet crucial insight—whether your headcount is increasing or decreasing—gives an immediate snapshot of your company’s growth trajectory. Analyzing this trend over time helps assess if hiring efforts are aligned with business goals.
Attrition Seasonality: Understand When and Why People Leave
Most companies predict attrition linearly, but attrition tends to spike around specific events—bonuses, commissions, or seasonal changes in work. Recognizing these patterns allows better workforce planning and smoother transitions during peak attrition periods.
Recruiting Capacity vs. Business Demand: Can Recruiting Meet Business Needs?
A key question for HR leaders—can your recruiting team meet the hiring demand placed by the business? By comparing business needs to recruiting capacity, you can pinpoint hiring gaps and address them proactively to avoid missing strategic objectives.
Leveraging the report for people team investment
While this report is seldom used to alone as support for investment into people & recruiting, it’s part of the executive story. That being said, once you’ve had a few quarters of managing to the story told in this report, you’ll build a trust from the team which may lead to less “helicoptering down” to understand the problem. Here are 3 investment scenarios you can unlock by using the headcount waterfall report.
Flat Headcount, high attrition/recruiting demand: Reductions in attrition can reduce the gaps in production between the outgoing employee and the new hire. They also reduce the burden on recruiting capacity and company culture, especially with higher level exits. Quantifying the tangible, financial impact of attrition often unlocks funds to reduce. This is especially true if you’re above benchmark for attrition in your given industry or job title
Not meeting new hire demand: New hires fuel company growth, and recruiting teams need the resources to do it. Calculating the missed production from late hires could unlock additional recruiters for your team.
Agency/RPO/Contract Recruiter use: Attrition seasonality is a thing. Most workforce planning teams forecast using linear 10-15% attrition, but people don’t quit on your schedule. Showing seasonality helps get resources for times when capacity temporarily exceeds demand.
The Benefits of Upgrading to headcount365's Real-Time Headcount Waterfall Report
You don’t have to manually populate this report. All your requisitions are always up to date. You don’t have to pull reports from disparate systems to make the report work. With headcount365, data tabs are automatically populated, ensuring real-time accuracy.
Data is enriched with intelligence easily accessible in other parts of the app: Want deeper context for any of the data? You’re just a click away.
Easy to see previous waterfall reports: If you want to see progress since the last meeting you don’t have to dig up another excel file. Just sort by date.
Effortlessly cut the data for execs on the fly: Parameters—like department, region, or role—without complex Excel coding, giving you faster, more tailored insights.
Conclusion
The waterfall report is a simple yet powerful tool that provides executives with a clear, high-level view of headcount efficiency. By mastering and interpreting this report, you can quickly gain insights into workforce performance and make a strong case for the investments needed to ensure your team’s success. Download our free template to get started, and if you're ready for more, schedule a demo with headcount365 to experience our live, real-time reporting.
