For rapidly scaling companies, the pressure is on to hire quickly. But, too often, in this rush to fill roles, organizations end up making expensive staffing mistakes: hiring the wrong candidate or losing top talent because of a failing employee experience.
With effective headcount planning strategies in place, HR can support the organization to build a workforce plan that brings the right skills into the business—at the right time, throughout the company’s growth.
Put your best plan forward: Your guide to intentional team and company growth
1. Develop a strategic workforce plan that focuses on quality, not numbers
Hiring under pressure to achieve a certain number of employees may result in bringing the wrong candidate on board.
Thirty percent of companies that made a hiring mistake said they felt they needed to fill the role quickly, according to a CareerBuilder survey. A “bad hire” occurs when an employee doesn’t have the hard or soft skills to succeed in the role, or when the new hire feels a mismatch between the expectations and reality of the job. The cost of a bad hire ranges from additional recruitment costs to decreased productivity and increased stress—particularly on managers—according to a survey by staffing consultancy Robert Half.
To avoid rushing hiring decisions, companies should move from chasing staffing targets to finding the right fit—even if it means slowing down the recruitment process. In an episode of Recruiting Brainfood, Matthias Schmeißer, the director of talent at analytics firm Beamery, contends that a sustainable approach to headcount planning reduces focus on hiring targets. Instead, talent teams should empower hiring managers to make decisions.
The cost of a bad hire ranges from additional recruitment costs to decreased productivity and increased stress.
“My lesson learned [is to] never push hiring managers to hire a candidate if they are not 100% convinced because I don’t want to hit my numbers, I want to grow in a sustainable manner even if it takes sometimes a bit longer,” said Schmeißer.
In Mastering the Hire: 12 Strategies to Improve Your Odds of Finding the Best Hire, Chaka Booker writes that hiring managers should be coached to evaluate the candidate’s suitability for the role, not their performance in the interview. Booker recommends that hiring managers immediately write down their first impressions of the candidate to call out and minimize bias in the hiring process.
2. Create and visualize a clear organizational structure
A clear organizational structure enables HR to develop better headcount plans, identify skills gaps, improve the employee experience, and determine the ideal span of control through the company’s growth.
A clear organizational structure—a system that outlines roles, workflows, and reporting structures—shows how work is done and decisions are made in the company. An org chart represents this information visually, depicting relationships, processes, and responsibilities throughout the organization so everyone can understand them.
Creating and visualizing such an organizational structure gives the entire team clarity about talent shortages, urgent hiring needs, and budgeting implications.
Without a clear organizational structure to guide the headcount plan, teams may end up with too few managers to support employees. Your workforce could find themselves doing extra work far outside the scope of their roles—exposing your people to burnout and the company to attrition. Different departments risk duplicating work because responsibilities haven’t been defined.
Dave Koslow, chief operating officer at DocSend, says companies often ended up growing without updating the org structure.
“You’re a 10-person company. You’re trying to move as quickly as possible . . . Then you get a little bit bigger, and the organization needs more structure, but your inertia can just continue to carry you forward operating in the same way. [You need to say], ‘Okay, we need to slow down a little and be methodical, because things have changed.’”
To create a clear organizational structure, consider how work will be managed throughout the company. This clarity allows you to choose the appropriate organizational structure for your company.
Common organizational structure types include:
- Functional: Group employees into teams based on specific functions
- Flat: Reduce or remove layers of management so the entire workforce is on the same level
- Matrix: Employees report to multiple managers
- Team: Group people together based on specific goals
Factors like your company culture and stage of growth might influence your selection. Once you’ve chosen an organizational structure, find an org chart software that will help to visualize that structure. Your org chart software should also serve as a headcount planning tool, allowing you to view open roles and create scenarios to inform financial planning.
3. Eliminate a one-size-fits-all approach to workforce planning
Your organization is hiring for multiple roles, and each may require a longer interview process or tailored recruitment strategy.
Frequently, organizations make broad decisions about headcount plans that don’t account for individual departments. For example, if an organization is ramping up to launch a new product, it may be important to hire more developers to help build it or more sales people to support the new sales stream. Depending on the role, the time to hire for certain positions might be longer. At 43 days, the time to hire for technical roles is higher than the U.S. average, while some roles have slower interview processes, according to a Glassdoor analysis.
Higher-priority roles may also require specialized recruitment programs. According to research by LinkedIn, recruiters recommend using customized employer branding content to attract candidates in sales, engineering, and operations. Planning ahead for these types of specialized programs is critical to fulfilling growth plans.
Eliminate a one-size-fits-all approach to workforce planning by reviewing hiring needs by department. You’ll want to evaluate metrics like time to fill and diversity, equity, and inclusion (DEI) indicators, and ensure they’re adjusted for specific roles. Then, to further customize your approach, build a talent acquisition strategy that’s based on that data.
Andrew Chen, a general partner at Andreessen Horowitz, suggests finding communities where your ideal candidates are active and engaging them in conversation right away. “This may be Newgrounds for Flash people, or the Firefox extensions directory for browser folks.”
Ragini Holloway, the head of talent at fintech company Affirm, said the company conducts tech tours at universities to connect with more women in tech in an effort to put action behind its DEI goals.
The headcount planning process must account for these role-specific recruiting initiatives because they will impact hiring timelines and headcount forecasting.
4. Build an alumni program for departing employees
Building an alumni program helps you create a network of ex-employees who remain connected to the company and may eventually rejoin the organization.
In the technology sector, talented employees constantly leave to pursue new opportunities, but that doesn’t mean they have to be gone for good. An alumni program is a structured program for maintaining relationships with those former employees and a way for you to extend your talent pool.
According to data from LinkedIn, software companies have a higher turnover rate than companies in other sectors. Part of this is due to increased competition for tech talent. Peter Cappelli, a professor at Wharton School and the director of its Center for Human Resources, says turnover directly affects headcount planning: “Companies hire from their competitors and vice versa, so they have to keep replacing people who leave.”
Through an alumni program, you may be able to encourage some of those employees to return, perhaps when the company is at a different stage of growth. An employee who left after your company secured its seed round may be able to bring a new perspective after you’ve secured your Series B.
To establish an alumni program, stay connected to departing employees. This can be as simple as asking if they’d like to be added to your company newsletter and invited to future company events.
Heather Kinzie, the chief operating officer of Strive Group, a consulting firm that also deals with recruitment, told Recruiters Network that exit interviews play an important role in employee alumni programs. During the exit interview, ask whether an employee is open to coming back to your organization, make a note of their response, and add it to the person’s profile in your applicant tracking system.
One caveat is that a rehired employee’s performance and engagement may depend on why they left the company. A Journal of Management study found that rehired employees tended to leave the company a second time for the same reason they initially left.
Establish a Successful Headcount Plan to Guide the Org Through Growth
Successful headcount planning ensures the business has the right number of people with the right skills to help achieve growth goals. As the company scales, the HR team can adjust hiring plans and anticipate talent needs to align the workforce strategy around business goals, whether it’s putting action behind DEI commitments or expanding into new markets.
Ready to expand your team to support fast-paced business growth? Download our Startup's Guide to Intentional Growth to learn more about what it takes.