Headcount planning 101:

I’ll let you in on a lil secret: I have had so many bad experiences with headcount planning. 

So many in fact that I was actually EXCITED to write this newsletter about headcount planning. 

Because I’ve learned way too many hard lessons about headcount planning. Like, waiting too long to approve headcount requests can lead to employees quitting because workloads became unmanageable (been there myself!). Or, managers struggling to execute on important goals because they didn’t have the right talent in seat. 

Headcount planning ensures you have the right talent in the right roles at the right time to execute on your organization’s goals. 

When done right headcount planning:

✅Aligns talent with biz goals 

✅Enables better financial planning

✅Improves employee engagement and retention 

✅Helps with accurate forecasting

✅Empowers strong decision making

✅Reduces risk 

✅Drives future growth 

All those things sound FABULOUS. 

So, why is headcount planning so freaking hard then??

Because navigating all the variables, competing interests, and untrained leaders can feel impossible. 

Not to mention, we don’t know the future… Some organizations are taking bets and the outcome is simply not predictable. 

Unless you have a crystal ball, then plz mail it to me STAT I have some questions I should ask. 

But, it is possible to do headcount planning well!

But before I get to the ideal process, we have to talk about something YOU MUST know before launching a headcount planning process. 

You can’t plan without knowing your goals: 

Q: What are your organization’s goals in 2025?

If you don’t know, now is the time to get that answer. 

🏠 Because goals are the foundation of headcount planning. 

Without knowing your goals your headcount plan will be:

❌Inefficient 

❌Misaligned 

❌Reactive 

Headcount planning without goals is like driving somewhere when you don’t know the route. 

So, if you don’t have your goals for 2025, do not pass go, do not collect $200. 

But, if you have your goals ready – you know what projects and products are on the docket for 2025 move on to the ideal process. ⬇️

The ideal process: 

Every organization is different which means different needs, different processes, different headcount planning. 

But here’s a process that could work for your organization: 

Step 1: Set goals. Goal setting is the foundation of any headcount planning process. There are many different ways to set goals, ultimately how you do it doesn’t matter much. What matters is CLARITY about what is going to be achieved in the next period. The next period can be next quarter, next half of the year, or full year. It depends on what cadence your org sets goals. 

Pro-tip: Not every organization can set annual goals, some are smaller and moving on a more agile time period. If your org is more nimble it means your headcount planning process should also be more agile. Maybe it’s an ongoing thing that is touched on multiple times a year rather than set once and not revisited for a year. 

Step 2: Secure alignment AND understanding from leaders. There’s nothing worse than a leadership team that doesn’t know WTF is going on. Call me bold but if your leaders don’t know your goals maybe they shouldn’t be leaders. Sorry, snark level is 10/10 today.  

Alignment is crucial because those leaders need to understand biz goals to go set department goals and it all directly impacts headcount asks. 

They also need to understand the mechanism by which they will submit their asks. This can be through email, a form, a request process etc but this process should be outlined and shared. 

The way to collect asks is up to you but important to know about each ask is:

✅What biz goal does this new headcount support?

✅What are key responsibilities of this role?

✅What skills are required for this role? 

✅What is the impact if the role isn’t approved?

✅What is the ideal start date for this role?

✅What is the estimated salary for this role?

Once you have that info, validate it with what you know. It’s at this stage I like to level and band each headcount request. 

BTW: You must know the estimated salary to effectively make it to step 3. 

Step 3: Review, confirm and budget

Dream team assemble: tapping in Finance here. 

Finance + HR need to be in lockstep to review these asks, make recommendations and adhere to the overall budget. 

It’s important here to review every ask and not just consider new headcount but potentially look across the org at existing talent and suggest any trade offs. This stage can feel like a game of chess with all the maneuvering!  

➡️The output of this stage is a starting plan that includes all role requests, cost and estimated hire dates.  

Never forget: The business goals should drive the prioritization of headcount. 

Step 4: Final Approval 

In this stage gather your final approvers – this could be specific executives or your founders. 

Walk them through:

✅Justification for approved roles 

✅Cost analysis 

✅Alignment with goals 

This should be an informed convo where things like tradeoff and urgencies are discussed. 

The goal is to leave the discussion with a finalized plan that is ready to be communicated to all leaders. 

Every leader requesting headcount should know:

💡What to expect when a request is put in 

💡Why a request is approved OR denied

💡What comes next 

✨Boom your headcount planning process is done! ✨

This entire process can move on whatever timeline you set but don’t forget to keep leaders in constant communication. 

There’s nothing worse than requesting headcount, never hearing back and never knowing why. Bring them along the journey with you. 

After headcount is approved, the work starts to find that talent! 

What’s next: 

IMO headcount planning can be SO draining. Everyone seems to think they know best. 

The thing you cannot forget is that you have a voice in this process as well and your expert opinion on the org, its talent, and future is important. 

I hope this edition gave you something to reconsider about your headcount planning process!

Next week the theme continues. 

I’m gonna tear into performance management and tell you all the things you should reconsider. 

What a time to be alive!!!