That said, hiring is hard and even the best companies make mistakes and, in fact, they do so often. Whether it’s timing, candidate fit or even role requirements, it’s rare to get it right every time. But what you can control, you should, and it starts with your process and how much you’re willing to invest in it.
Below is the first step of a process I’ve used at different times in my career, rarely have I used every aspect of every step end-to-end – sometimes circumstances wouldn’t allow it. That said, there is value in the parts and adapting it into your company’s process will up your success rate.
Centering your headcount approval process around modeling/estimating expected impact of new hires will reinforce company goals with employees, help them prioritize their own work and cement rigor around your process. It begins with asking hiring managers to make a list of the hard KPIs that the new hire would be expected to impact and then estimate the improvement.
For subtle/softer metrics, the manager would need to detail how improving these will benefit the business with as much specificity as possible. This creates room for the senior manager to engage in a more meaningful discussion with the hiring manager vs “we need xx because there’s too much work for yy.” It also encourages “fact-based” conversations where title and power are leveled – a positive 2nd order effect.
Adding rigor to the process will help managers understand what the company values and force them to go deeper to justify their request. At the same time, it starts to establish what the new employee will be expected to achieve and is the beginning of their performance plan.
To be clear, achieving a high level of precision in these estimates is not easy. It requires serious reps and will be different depending on the role. Revenue related roles tend to be the easiest and “support” roles the hardest.
For startups where product/market fit is still on the horizon, this type of measured KPI driven approach may not fit. In these cases, the company doesn’t know what it doesn’t know and needs to drive innovative approaches vs replicate (and improve) current performance metrics. But even in these situations framing the conversation around expected output will ground expectations on both sides.
But headcount decisions are not made in a vacuum; company strategy, goals and budget are considerations. For companies that aren’t cash flow positive, the potential positive impact a new hire could have must be weighed against how the additional cost impacts the company’s runway vs how it helps it achieve the next milestone(s) needed to secure more funding.