Budget season is pretty much past us at this point, which means headcount budgets are set for 2008. Of course, that doesn't mean the need for staffing justification is final. Some organizations cut new headcount to zero as part of the budget process, and some organizations allow business units to layer in additional headcount, then vigorously track revenue to determine if the new headcount will be hired in the upcoming year.
Make your revenue early in the year, and maybe you'll get to hire the additional headcount. Struggle and
chances are the new talent isn't going to be joining the organization.
One additional exercise used, when needed in headcount discussions, is the creation of staffing metrics. Customers per Customer Service Rep, Revenue per FTE - you name it, there's a staffing metric that can be created. Some are useful, some aren't - it's all in the context.
Here one you may or may have not seen - comparison of the raw number of 100K jobs in your organization compared to similar organizations. Organizations routinely take a look at this simple metric to determine if they're top heavy or not. Of course, the number itself really doesn't tell you a lot - you've got to have some type of comparison with other organizations (or divisions in the same company) to make it mean anything.
Here's an example. In my hometown, a new mayor is comparing the Birmingham School Systems to other school systems regarding this metric. From a Birmingham news editorial on the results of the analysis:
"Look around the area, and it's plain to see that Birmingham taxpayers pay a premium for the top administrators in their school system.
That's especially true when you have an assistant principal making more than the principal at the same school. Also, when the school system has 22 employees, most of those in the central office, making more than $100,000 a year while at Jefferson County, which has 8,000 more students, only half that many administrators make $100,000-plus. Mobile County, the state's largest school system with 65,000 students (almost 2X as many as the Birmingham City District), has just 12 administrators making more than $100,000 a year."
When you see this type of analysis, it's clear which side you want to be on - the lean side.
Just like analysis of CEO pay, the raw number of highly compensated individuals in an organization is an emotional topic. More importantly, since it deals with multiple positions, it's a barometer of how efficient an organization is compared to its peers.
Of course, the time to control what the Birmingham school system is experiencing is before the additonal group of highly compensated indviduals is hired. At that point, it's voluntary. Later, it usually becomes involuntary.
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