Without a doubt, your company’s most important asset is its workforce. After all, these are the people responsible for designing, building, marketing, selling, and supporting whatever your company’s products or services might be. Any objective you have as an organization hinges on the effort of your employees—so when you set your sights on increasing sales and revenue, you also need to consider whether you’re adequately staffed to drive and sustain the growth you want.
Workforce planning can be a daunting task, but it’s vital to ensuring that you can achieve company goals as efficiently as possible. Through the use of key metrics and worksheets, this book will help you calculate your hiring needs for the next 12 months. We will demystify the primary questions surrounding the creation of a functional hiring plan, including:
First things first: We need to investigate your company’s objectives and the timeframes in which you expect to meet those objectives. This is a fundamental step in ensuring that your hiring plan closely aligns with the company’s most strategic goals.
In particular, think about which objectives will have the biggest impact from recruiting efforts (or the lack thereof). These will tend to be goals related to “increasing results like revenue, profit, product innovation, market share and the stock price.” It stands to reason that a projected growth in revenue or adding new international offices, for example, would necessitate an expanded workforce.
In addition to obvious plans for growth, there are other signals that may indicate the need for additional headcount, including:
The question of how many people you will need to hire in an upcoming timeframe is perhaps the most crucial one to answer when drafting your hiring plan. After all, it costs a significant amount of money to source, recruit, and hire new employees. You want to be conservative when estimating a new headcount prediction—but, at the same time, you need to be certain that you account for every key position.
Many factors will ultimately influence the number of people you can hire. Budget, of course, is a major concern. You can’t hire more people than you can afford, even if you desperately need them. Likewise, you might be limited by geography, the need for highly specialized skills, or even seasonal swells and dips in the need for your products or services.
In general, however, you can get a good indication of the number of employees you need to hire by analyzing metrics related to Revenue per Employee (RpE).
Faced with certain situations, it can be tempting to hire too many—or too few— people.
Don’t accidentally over-hire when...
But don’t automatically under-hire just because...
Another pressing issue, of course, is the prioritization of each department’s hiring needs. Every department head
or hiring manager will likely make a case for his or her team, but you can’t always accommodate everyone. Here are a few guidelines:
"The short and simple answer is that prioritizing mission-critical or key jobs positively impacts everyone and hurts no one. By focusing on these jobs, the organization optimizes its chances at success which in turn helps drive job security, enhanced rewards (bonuses), career advancement opportunities, and reputation for all. Being on a winning team raises every participant’s value in the marketplace for labor."
Dr. John Sullivan
Answering this question will help you determine the order in which you should hire new employees and the length of time that will help you minimize the cost-per-hire. You’ll want to take into consideration your quarterly, annual and long-term goals, as well as any other relevant performance metrics or KPIs.
For example, say you need to increase sales by 200% next year. Your average sales cycle is 40 days, while your average time-to-hire for sales representatives is 20 days.
Having these metrics on hand will help you make some assumptions about how quickly you will need to bring new reps on board in order to meet your goals. As an added bonus, this assessment might also help you uncover some important inefficiencies in your hiring process that you can work to correct.
Other factors—including turnover and competition—will likewise play a role in how quickly you need to hire.