Is your employee headcount planning constantly thrown off by factors you didn’t think of? Understanding the different forces that can affect employee headcount will make you more effective and managing your workforce and keeping costs under control while maintaining maximum productivity.

What Is Employee Headcount?

Employee headcount is the number of workers officially employed by a company at any given time. Employee headcount planning or forecasting can be critical to organizational success. You need enough workers to achieve all goals, but not so many that you’re paying for unutilized employees.

Why Is Employee Headcount Important?

Employee headcount is important because it is a deciding factor in how many hours a company can stay open each day, how much product can be manufactured, or how many customers can be served. Employee headcount affects how much is spent on payroll, and what kind of benefits packages can be negotiated. 

What Factors Affect Employee Headcount?

Employee headcount itself may seem like a fairly easy concept: if you have X employees, you have X employee headcount. However, employee headcount and the needs of both employer and employees aren’t static. Employee headcount can be a very fluid thing, and be affected by multiple factors.

1. Employee attrition

When employees leave the company (whether they are let go or quit), employee headcount is reduced until a new hire can be brought in to replace them. In the meantime, other employees will have to pick up the slack or else productivity may be reduced. 

Without a short time-to-hire process in place, low headcount due to attrition can significantly damage revenues. It can also lead to even faster attrition as other employees are overworked. In one survey, 32% of employees attributed burnout to excessive overtime or after-hours work.

2. Part-time employees

Employee headcount assumes employees work full time. A part-time employee typically is counted as half of a full-time employee (FTE). If an organization has many part-time employees, headcount can’t be considered on a 1:1 basis with employee productivity. Instead, employee headcount planning must be conducted with the variable of part-time workers factored in.

3. Employee time off

Employees who take PTO, sick leave, maternity leave, vacation time, or who are otherwise prevented from coming into work don’t affect the official employee headcount but their absence does have to be accounted for. Ideally, the employee headcount will be substantial enough to cover planned and unplanned employee absences, which can generally be estimated by looking at historical data. Overall, 2.8% of the national workforce is absent from work on any given day.

4. Seasonal demands

If a company has regular seasonal highs and lows, available work hours may decrease and increase regularly. Needs will need to be accurately forecasted and employee headcount planning put into motion. Past years’ needs can be used as a factor in forecasting, as well as any company growth in the past 12 months.

5. Company growth

Likewise, company growth can mean a slow but steady increase of employee headcount over time or sudden bursts of growth that require rapid hiring. Employee headcount forecasting should be done at regular intervals to ensure recruitment keeps pace with need, so growth can continue unimpeded by lack of employee support. Planning allows recruitment to be done without rushing, avoiding bad hires.

Employee Headcount Planning and Recruitment 

Employee headcount planning and recruitment go hand-in-hand. You’ll need to be able to accurately forecast employee headcount at any given time, recruit swiftly when needed, and manage your workforce effectively to ensure there are no gaps in skills, production, or service.

Crosschq Recruit is designed to put a pool of highly qualified and motivated talent right at your fingertips, helping you hire quickly and confidently to meet employee headcount needs. The pipeline provides accurate prospects for job matching, helping you make good hires that stay.

To learn more about how to streamline your recruiting process and reach out to quality applicants, request a free Crosschq custom demo.