Justifying headcount changes with “gut instinct” is a bad idea. Here’s a better way.
Try this contextually relevant decision support data exercise instead.
Build a dashboard with these dimensions and measures:
First Assessment Threshold (Goal): Determine the health of your pipeline and the propensity to translate into cash flow.
- Actual vs. Forecasted Revenue (by Month)
- Pipeline Movement (Not just stages but avg. time in each deal stage.)
- Budgeted Expenses
Second Assessment Threshold (Goal): Move beyond perception to determine if you can free up current utilization before you add additional capacity (headcount).
- Active vs. Available projects
- Hours by the employee (or contractor) booked against projects (Projected vs. Actual would be an exceptional gauge)
- Revenue vs. Expenses by the project/client (Soft and Hard costs)
Third Assessment Threshold (Goal): Do a crossover to profitability for the last few similar hires to visualize an “ROI Forecast” based on prior performance.
- Duplicate the micro measures in the “Second Assessment Threshold” over the past one to three similar hires but limit it to historical detail only.
- You could even overlay this detail on the forecast detail to establish your very own trend line.
Some Dimensions/Filters to Consider:
These macro and micro elements provide a trustworthy "reality check" that will help you derive (and justify, if necessary) the utilization (current or new) required to meet revenue and EBIDTA targets.
To achieve this ...
You'll need your Financials, ERP, CRM, Project/Work Management Tool, etc., piped into a data warehouse like Snowflake to pull disparate databases into an executive-level dashboard.
An easy way to connect everything is using a tool like Fivetran, which has a remarkable amount of ready-to-use plug-ins that will minimize your need to build custom API connectors.
Then, use a tool like Tableau to build the dashboard, deploy it through a browser, and make it available to leaders throughout your organization.
Ben Stroup is Chief Growth Architect and President at Velocity Strategy Solutions where he helps leaders design, develop, and deploy smarter business growth strategies. Ben is a futurist, disruptor, and data champion. He leads a team that takes a structured learning approach to business challenges, which allows them to assist leaders in bridging the gap between ideas, innovation, and revenue—taking ideas from mind to market.
Velocity Strategy Solutions is an on-demand, next-generation business strategy and management consulting firm which provides clients with a relentless focus on data, execution, and results that positively impact the bottom line. Velocity delivers integrated people and revenue strategies combined with a disciplined approach to growth architecture that elevates the capacity of leaders, teams, and organizations to succeed and win more.