What Your Frontline Managers Need to Know About Headcount Planning

Headcount planning is one of the most important efforts a company takes on. It affects everything from growth and retention to the ability to meet objectives and revenue targets.

Critically, headcount planning can’t happen in a vacuum.

The most effective headcount planning efforts go beyond the people team and even finance to include the entire leadership team as well as frontline managers.

How to confidently approach your headcount planning

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It Pays to Include Frontline Managers in Headcount Planning...

If headcount plans and compensation are transparent in your organization, there is really no reason not to involve all managers in the planning process. In fact, involving frontline managers in headcount planning typically leads to a stronger end result for two key reasons:

1. Direct insight: Frontline managers have a better understanding of the gaps in execution and the details of what day-to-day work looks like than their executives. This insight can lead to more meaningful conversations about what’s needed to hit growth targets. On the contrary, failing to include manager input in headcount planning opens the door to missing key aspects of what teams need to scale successfully.
2. Sense of ownership: Frontline managers should always have a sense of ownership over their teams, including their budget, team goals, hiring, and professional development. Including this group the planning process is also a huge part of that ownership.

...But it’s Often Too Challenging to Include Frontline Managers

Despite the benefits of including frontline managers in the headcount planning process, it often doesn’t happen. That’s because doing so is challenging.

Headcount planning is a complex, ever-changing puzzle when it’s concentrated within a small group, and the more people you add to the mix, the more challenging it becomes. Involving all managers in headcount planning leads to more voices and more priorities that need to be heard throughout the process. Most often, it’s not that people leaders don’t want to hear these opinions, it’s that there’s no good way to prioritize and facilitate meaningful collaboration.

But just because it’s hard doesn’t mean it’s impossible. Effectively bringing frontline managers into the headcount planning process requires more communications, clear processes, and modern solutions to facilitate collaboration. It should also include training on topics like compensation, impact on cash burn, and elements of org design that managers need to consider.

In short, it’s a big effort and not something your people team should have to take on alone. Lean on your entire executive team to communicate your company’s approach and offer training around headcount planning to fully enable managers to participate in the process.

How to Enable Frontline Managers to Participate in Headcount Planning

With that in mind, what does it actually take to properly enable frontline managers to participate in headcount planning? Here are three critical areas to consider:

Step 1: Provide the necessary insight and guardrails for success

First and foremost, you need to arm your managers with the right foundation of knowledge to participate in the headcount planning process successfully. One of the best ways to do so is to lead information sessions that focus on:

• Basic principles of headcount planning: Review how managers should think about headcount plans in light of company goals (particularly annual recurring revenue targets for SaaS companies) and growth on other teams. For instance, managers on the customer experience and marketing teams need to first understand the size of the sales team so they can align their plans accordingly. Meanwhile, growing engineering and product teams is more of an art based on the product roadmap. To help facilitate this process, click here to download our editable guide for an aligned approach to headcount planning.
• Company-specific requirements: Outline the company-specific requirements managers need to consider as they build out their teams. These factors include everything from compensation bands so that managers can budget accordingly, to any leveling guidelines your organization has in place so that they can balance seniority and craft appropriate job descriptions.
• Internal considerations: Headcount planning isn’t just about bringing on new team members, it’s also about managing internal movement among existing employees, and that’s something every manager needs to consider. Remind managers of the importance of understanding the career aspirations of their existing teams so that they can make the right internal moves first versus immediately hiring from the outside, which can block opportunities for existing employees and lead to turnover.

Step 2: Arm managers with the tools they need to turn ideas into action

Once your managers have a holistic picture of budget, compensation guidelines, and career aspirations and performance among their current teams, they should be well-positioned to start planning.

While they can do this planning manually, for example in a spreadsheet or by manipulating an org chart in a slide deck, that approach is time-consuming, error-prone, and not a realistically scalable option for organizations with more than about 50 people.

Instead, a platform that can bring all of this information into one place creates a far more efficient and completely painless process. It ensures managers have all the information they need in front of them and can even put in place automated guardrails around elements like compensation bands to eliminate any chance of human error.

Further, a solution that offers scenario planning functionality gives managers space to experiment with different growth plans and easily visualize the impact of each scenario on elements like budget and growth opportunities.

Step 3: Integrate manager plans cohesively across the entire organization

Finally, it’s important to avoid a situation in which there are too many competing voices and ideas in the process. Otherwise, you’re likely to end up with a plan that’s out of budget and/or completely lopsided across teams.

The best way to integrate manager plans cohesively across the entire organization is to take a bottom-up approach. In this approach, managers should submit their plans and roll them up the manager chain for approval. This allows each manager to review, approve, and integrate the details from any other managers on their team into their own planning -- all while ensuring that the plans start with those who are closest to the day-to-day action.

Of course this approach is really only feasible with a solution that streamlines each of those steps (especially approvals) and brings all the data together in a single place to ensure visibility across teams.

Bringing Frontline Managers Into Headcount Planning Can Yield Powerful Results - If Done Correctly

The positive impact of bringing frontline managers into headcount planning can’t be overstated. This group is the closest to the day-to-day functions of the organization, which gives them the most direct insight into what’s required to meet future goals.

But involving managers in headcount planning can easily go awry if not handled correctly. As you think through how to best inform managers, empower them with the tools they need to succeed, and structure a collaborative process, remember these best practices:

• Communicate, communicate, communicate: Share as much information and as many updates throughout the process as you can. And do so everywhere possible, including manager training, 1:1s between managers and their executives as well as managers and the people team, any manager-specific chat channels, and through documented processes readily available in a document.
• Set up your processes in advance: Whether you use a platform like ChartHop or stay manual with a spreadsheet, it’s essential to set up your processes in advance to work out any kinks. Be sure to pilot the process with one or two trusted managers to get their feedback and spot any gaps before rolling it out to the larger audience.
• Lean on your executive team: Last but certainly not least, remember that your people team doesn’t have to go at it alone. You should lean on the entire executive team to promote the importance of the headcount planning process and the principles your company will follow. Remember: Headcount planning is a business process, not an HR process.

Now it’s time to start putting these plans into action. For a more detailed look at what it takes and how your team can account for the unique complexities of headcount planning, download our guide How to Confidently Approach Your Headcount Plans.

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