KPI Wednesday: Tracking Headcount Status of In-seat and Attrition (Part 1 of 3)

Part 1 of a 3-Part Hiring KPI Series. View Part 2 (Hiring Velocity and On-Time Hiring) and Part 3 (Hiring KPI Scorecarding).

Since publishing Revenue Growth: The Metrics You Can't Ignore we have received a lot of great feedback. Thank you to everyone that has downloaded, taken the time to read it, and commented on the book. We wrote that guide to serve as a resource for Sales and RevOps, really any GTM leader, to provide best practices for measuring, gaining insights, and taking actions for your revenue supply chain, capacity and productivity.

To support this objective, we are now publishing weekly blog posts each Wednesday, hence the name of this blog being KPI Wednesday. These weekly-yet-light practicums will describe a KPI or two, share scorecards, suggest how you can gain insights from combinations of KPIs. (We also may include anything else relevant to each week's topic that we discover from our customers or the many conversations we have with GTM leaders if we feel it's compelling and insightful to share.) And of course, if you have suggestions for any topics or areas to dig into, please let us know and we will do our best to to share knowledge and expertise from our network of great customers and advisors.

Many of these weekly blog posts will build upon previous ones and read as old-time Serial Novels... well more like very short micro stories and probably not as dramatic... culminating in a finale that ties the weeks together. For the first such Serial, we are going to focus on Hiring-related KPIs. (In future Serials we will focus on planning for, managing and adjusting capacity and its impact to efficiency. But for now let’s start with the basics of getting your team together.)

Understanding Hiring KPIs: A Quick "Cheat Sheet"

Hiring Gap:

Key questions answered: Have we hired enough people to hit our targets?
How to measure: Hiring Gap = Actual Hired - Planned Hires
Noteworthy: The number to be hired in plan has to include not just net increase, but also an allowance for attrition.

Attrition Gap:

Key questions answered: Are we retaining people?
How to measure: Attrition Gap = Actual Attrition - Planned Attrition
Noteworthy: Plan and measure attrition with seasonality and manage timing where you can such as promotions.

In-seat Gap:

Key questions answered: How many people do we have active in role vs plan?
How to measure: In-seat Gap = In-seat actual - In-seat plan
Noteworthy: Among Hiring, Attrition, and In-seat Gap KPIs, In-seat is the most important and insightful to use if only using one in a scorecard

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Measuring the Basics of Hiring KPIs

Tracking hiring KPIs seems straightforward, and it is... on the surface. Most companies need people to build pipeline, close deals, and manage customers. The “people” resourcing aspect is essential. It starts with a hiring plan which details how many people, in what role, on what segment or team need to be in-seat (or onboard) and when incremental ones need to be hired.

Here's how to best approach measuring: Create a plan, then track and forecast to your plan. Do this every week, review it, share it and raise its visibility to hold hiring managers accountable. Any delay in hiring or any amount by which you fall behind will materially impact your ability to achieve your targets.

Figure 1: Example hiring plan and in-seat (or total reps onboard) plan vs actual with gap to plan, broken out by sales segment.

Don't Forget Attrition

Too many organizations unfortunately stop there, but they are forgetting about attrition. Without planning for attrition, your plan is wrong from the start.

Figure 2: Example hiring plan, in-seat (or total reps onboard) and attrition plan vs actual with gap to plan broken out by sales segment.

It is important to understand any seasonality of attrition at your company, so it can be planned more accurately. Please don’t just assume the same percentage of attrition for each month of the year. Maybe attrition is the highest right after sales reps receive their final commissions and bonuses from the previous fiscal year, and it's lowest in the summer. And attrition is not just people that exit the company; it is also people that get promoted or change roles. If a sales rep gets promoted from a small business rep to a mid-market rep, that is attrition to the small business team. Details of attrition types -- voluntary, involuntary, promotion, role change -- should be tracked in order to gain insights into the various trends and be used as an input for planning.

The immediate impact of attrition is that the “hiring” plan needs to be increased to account for the loss. As you can see in the Figure 2 table above, the planning assumption for attrition in the SME segment is 2 attrits in February. The hiring plan is therefore 5 instead of 3 for February when compared to the table without attrition assumptions, in order to backfill for the people loss. In fact, given ramps (more on that in later weeks or in the free guide download) you may offset the backfills to the hiring plan to earlier months to allow time to ramp to productivity.

If you didn’t account for attrition, and hired the same amount of people in both scenarios above, you are already in a people deficit early in the new fiscal year. Whenever you talk about headcount plan and measure hiring you also need to do the same with attrition.

And of course... we'd love to show you how to build, track, and adjust your plans in the Revcast platform, making all of these insights easy to access and to model different scenarios as things change. Schedule your demo walk-through now.

Next: View Part 2 (Hiring Velocity and On-Time Hiring) and Part 3 (Hiring KPI Scorecarding).

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