what it is, calculation and how to use the indicator in HR

Companies guide their activities for the year, semester or two months based on the strategic planning defined by all areas of the organization. One of the key indicators that should guide the guidelines is the headcount.

This metric should be reassessed periodically, since the staff may change, as well as the scope of action of each person – or even the areas.

To find out what headcount is, what its importance for the good conduct of the business and how to use it, continue reading our guide.

What is headcount

Translating literally to Portuguese, headcount means “head count”. That is, the indicator refers to the accounting of all employees of the company, regardless of their workload or position.

The headcount number is extremely important for the HR team, since, in addition to informing how many employees the company has, it allows for more strategic analyzes.

Despite being a very simple indicator to obtain, it is extremely important for the planning of actions and investments. Therefore, it must be measured and monitored closely – after all, these numbers can change from day to day, with layoffs and hiring.

Importance of the indicator

When done strategically, the analysis of the number of employees is very relevant to the company, as it shows the next steps to be taken.

Spending forecast

Knowing exactly how many employees work in the company and what are the expenses with each one, it is possible to predict how much will be disbursed in the fiscal year. For that, don’t forget to add salary, benefits, work materials, taxes and other expenses,

With this clear number, it is possible to understand which investments are within the company’s reach, how much cash exists and what the profit forecast is for the end of the period in question.

Therefore, knowing how much each employee costs is essential for controlling expenses and forecasting profits for any organization.

Anticipating risks

Knowing the costs, the company will work with a margin, both for gains and expenses, and will be able to conduct strategic planning actions with assertiveness.

In addition to avoiding unnecessary risks, this also allows them to be anticipated, since it is predicted, in numbers, how the conduct of business should run.

Business knowledge

Armed with information, executives will be able to make decisions based on full knowledge of the business and how it is facing the market, knowing exactly how much each decision costs and what its impact is.

Thus, it is possible to make projections that have maximized chances of success.

Why should HR measure headcount?

The headcount is essential for a strategic HR team, after all it is an indicator that deals directly with the people of the company and their performance.

With the data, it is possible to analyze the activities of each employee, the efficiency of the teams, the need for new hires or even layoffs.

By combining an employee’s cost information with the development of his tasks, it is possible to understand whether they are adequate, whether they need to be increased or decreased.

In the same way that a single collaborator can be with its inadequate tasks, the same can happen with an entire team. The same goes for the excess or scarcity of team members.

When the HR team knows the headcount, it is possible to make relocations safely and without unexpected financial impacts. For this, it is necessary to know how much each team member costs and what the average cost of the team as a whole is.

Only with a solid foundation, conclusions can be drawn and changes to readjustment made.

How to calculate headcount

The headcount is limited to surveying the number of workers working in the company, without discriminating between levels, wages or hours of work.

After doing so, preferably by HR records and documents, see which segmentations are of interest to the company, such as dividing employees into departmental groups or according to cost.

Calculating your staff is not a very complicated task. However, simply raising the number of active workers without a planned plan can be inefficient.

How to predict budget with him?

The relationship between headcount and budget is direct and obvious, since the cost of each employee to the company impacts monthly expenses.

Therefore, it is also part of the company’s strategy to forecast investments in salaries, benefits, in addition to essential expenses, such as water, coffee, electricity and other provisions. All of this must be accounted for and be on the tip of the pencil.

In addition, the company must provide for the cost of other actions, such as commemorative breakfasts, lectures and workshops, happy hours, year-end parties and personalized souvenirs.

Thus, if all these costs are previously analyzed from the beginning of a cycle, the budget can be forecast with little margin for error.

Headcount plan step by step

To create and put into action the headcount plan, it is necessary to have a budget plan – and vice versa. One plan depends on the other because both involve money.

Therefore, so that the company’s management does not get off track, it is necessary to have all the expenses planned, as well as to forecast expenses with employees, it is necessary to have already done the headcount.

So, with both studies in hand, the company must plan to increase salaries, include benefits, events and training for employees, promotions, task management or even teams, new hires and also necessary dismissals.

In this way, the headcount plan will be based on solid data and will predict certain actions, giving little space for wrong or poorly planned maneuvers.

See, below, which steps you should follow to enhance the effectiveness of the headcount:

Outline challenges and goals

Before calculating how many employees the company has, it is necessary to know the challenges that the company faces and where it intends to go.

Without having this vision, any indicator will be ineffective, since it will not be applied properly, that is, aiming at the objectives and knowing the risks.

For headcount to be effective, you need to know how, where, when and why to apply it. Only with the proper direction will the indicator make sense.

Raise other indicators

Remember that the number of employees in your company can only be relevant information when placed in a certain context or next to other indexes that assist in the extraction of important information.

Therefore, consider the cost of each employee, the job description of each, the scope of each team, how long each task takes to complete, the flow of each activity, the value of each job performed, absenteeism and turnover rates .

Headcount

After you have mapped out the challenges and objectives and raised other indicators, do the headcount.

Plan the period

Now that you have the numbers in hand, allied to the important information, start to outline strategies for a certain period of the company – bimonthly, semester or year, for example.

It is essential to follow the step by step without skipping steps. Only then will the indicators make sense and can, in fact, help your business strategically.

If done loosely, without foundation or perspective, the headcount is not functional.

After learning more about headcount and its importance, understand how to create and measure OKRs in HR.