5 Things Every Recruiting Leader Should Know About Headcount Planning
Table of Contents
Headcount planning is the process of determining the number of people needed to meet business goals. Instead of receiving the output of this headcount planning process as a “hiring order from the service of recruiting” we should be actively involved in the conversation—adding value & context so the business knows whether or not their hiring goals are actually achievable.
5 Key Metrics Every Recruiting Leader Should Know for Effective Headcount Planning
1) Headcount Ratios | Why HR planning is important for recruiting teams.
Production: Employee Ratios | How much work for each employee
If a recruiter fills 2 roles a month and you have 48 roles to hire next year, you need 2 recruiters.
Employee: Manager Ratios | How many managers are needed to manage employees
If your managers each have 6 recruiters and have 12 recruiter hires, you need 2 more managers.
Team Enablement Ratios | How many specialists are needed to productionalize repeat tasks
If you have 1 coordinator per 10 recruiters and you hire 20 recruiters, you need 2 coordinators.
These ratios are managed by WFP, but are critical for recruiting leaders to understand, especially in scaling businesses. They’re used both to help forecast the total headcount needed in future hiring plans, as well as ensure you have the proper team & team structure to keep up with demand.
2) Attrition Data | Attrition inputs + Total Attrition + Backfill: Attrition Ratios
Attrition Inputs
Compensation philosophy changes: Netflix currently pays top of the market. If they changed this philosophy, it may incite new attrition for those who view this as a number one priority.
Bonus & commission structure changes: Bonus predictability is a key consideration of total compensation, so changes to the amount and timing of payout can impact attrition rates.
Press/public perception - Press sentiment changes employee’s desire to stay.
Equity vesting schedule - once the “golden handcuffs” are off, attrition rates are impacted.
Company valuation - changes in company valuation in either direction impact attrition rates.
Total Attrition: The rate employees leave the organization, usually expressed as a percentage.
Backfill: Attrition Ratios: What percentage of outgoing employees are added to the recruiting demand.
Attrition Variance by Requisition: Replacements at the exact level, salary, and title have a different workload burden than on-shoring may combine many roles into 1, or offshoring that does the opposite.
3) YoY Headcount Plan Variance | The number of changes to your hiring plan, and their impact on your ability to service demand
Added/Subtracted Roles: Historical data on adds is the data point that can be the difference between hiring that one more recruiter who would have made all the difference.
Changes to Previously Approved Roles: Changes to existing roles, especially those that increase requisition workload burden, are critical to factor into your capacity model.
Timing Changes: It’s much easier to plan for a change in a requisition BEFORE the recruiting team starts working on it. Changing the goalposts during the recruiting process makes it very difficult to meet the original start date preference.
Recruiter Attrition Rate: Recruiter exits & ramp time of new recruiters impact your ability to predictably meet hires on time.
Forecasting attrition & change rates help you staff for “unexpected recruiting demand”. Seasonal attrition often creates spikes in hiring demand, triggering agency use and/or causing planned hiring to fall behind. Accurately predicting these rates may unlock additional recruiter staffing as an investment to prevent lost revenue or production from backfill-created hiring loss.
4) YoY Capacity vs Demand Actuals | The historical performance of the recruiting team against demand
Capacity demand reporting helps recruiting leaders understand their team’s ability to produce hires, and the context for variance to goal.
This is unique to headcount365. We’re the only tool that keeps a record of capacity vs demand performance, displaying how the service of recruiting has played out month over month.
Capacity vs demand reporting is critical to explaining the performance of the service of recruiting during the headcount planning process.
5) Internal Mobility Eligibility | The rate of jobs filled and backfills created by internal mobility
Internal Transfer Fill Rate: What percentage of roles demanded of the recruiting team were filled by internal transfers.
Internal Transfer Backfill Rate: What percentage of internal transfers created a backfill for the recruiting team.
Internal Transfer Eligibility: How many employees are eligible for transfer or promotion that align with approved roles on the plan.
Internal transfers are one of the largest sources of creating high-stress hiring. Internal fills often require an external hiring process, which can impact recruiter production. Without a strong policy on the timing for internal transfers, they create “expedited headcount requests” when there is an emergency to fill the outgoing employee. Predicting the internal transfer impact is critical for recruiting leaders to best manage the demand on their teams.
Recruiting leader’s role in the headcount planning conversation
Recruiting leaders should be an integral part of the headcount planning conversation, setting expectations with stakeholders about what’s possible given the current team. Proactive participation in these conversations builds trust and helps distribute the burden of hiring to the hiring teams who are making requests.