One of the most important operational drivers of a company’s future success is its headcount plan for the coming year. Although they may drive the process for other teams, heads of talent are often last in line to finalize their own team’s plans. The headcount for their recruiting team depends entirely on the rest of the company’s growth plans — not to mention revenue goals, budget, and expected (and unexpected) market trends on the horizon.
Every company has its own take on how to scale efficiently. How should a talent team think about their own hiring plans? Here’s our approach at Entelo, drawing from what we’ve learned from hundreds of talent teams growing the world’s top companies.
Model your talent acquisition conversion funnel after your sales team’s. A talent funnel has similar dynamics to a sales funnel. In sales, a certain number of leads are required at the top of the funnel in order for the company to close a number of deals and hit a revenue target. At each stage of the funnel, the pass-through rate determines how many leads convert to opportunities, and eventually, customers.
Similarly, talent teams must identify a certain number of candidates for their open jobs, in order to make the hires they have forecast. In this case, the pass-through rate is determined by how many candidates engage with recruiters’ outreach, then advance to the interview process. Some of these candidates will receive offers, and a certain percentage will join the team.
Use what you know to set pipeline goals and forecasts for open roles. If your company is fortunate enough to have lots of rich historical recruiting data, use it to your advantage. Segment your funnel metrics by source, by recruiter, by role, or department. This segmentation will help you home in more precisely on the dynamics of your various recruiting funnels. For instance, pass-through rates will probably look different for employee-referred candidates than they will for passively sourced candidates. Your recruiters’ outreach to engineers might have a lower response rate than outreach from your tech hiring managers. One hiring manager might convert fewer candidates from the phone screen to an on-site interview than another manager.
The more narrowly you segment the data, the more insight you’ll have into which elements of your hiring strategy are or aren’t working to make an informed forecast of future hiring funnels.
Based on your segmented historical data, you can forecast how many candidates will be required to reach each stage of the funnel in order to make one hire.
Assign time values to your funnel stages to learn how much recruiting time is required to make one hire. With funnel forecasts in hand, you can now arrive at the sourcer, recruiter, and hiring manager bandwidth needed to achieve your hiring goals. You will have to make some assumptions at this stage; for example, “It will take about 10 hours for one sourcer to build a list of 200 tech candidates.” Note your assumptions so that you can alter them later, if you find your estimates were off.
Now roll up the time required to see how many people are needed to achieve your goals.
For instance, let’s say that to make one senior engineering hire, you have to reach out to 200 candidates. In this scenario, 10 candidates agree to an initial screen, five of them pass through to onsite interviews, two of the candidates receive offers, and one ultimately accepts. Now you can break down the time required for this process. (Here, “job kickoff” refers to the kickoff meeting between a hiring manager and the recruiting team.)
Job kickoff: 1 hour
Source 200 senior engineers: 10 hours
Job kickoff: One hour
Outreach to 200 engineers: 10 hours
10 phone screens: five hours (30-minute phone screens)
Scorecards & follow-ups: 2.5 hours (15 minutes per candidate)
Five onsite interviews: five hours
Article Continues Below
Guide: Practical Tips for Remote Hiring
Debriefs: 2.5 hours (30 minutes per candidate)
Offer management: Two hours
Candidate management: Two hours
Reference checks: Two hours
Miscellaneous (team meetings, hiring manager check-ins, etc): Three hours
Based on the timeline above, to make this senior engineering hire, the organization requires 10 hours of sourcing time and 35 hours of a recruiter’s time. We would add in a buffer of anywhere from 25-50 percent to convert “billable hours” to actual office hours, resulting in roughly 60 hours between the two employees. With these numbers, you could envision that one sourcer could support up to three recruiters, and that one recruiter could carry 8-10 reqs per quarter.
Now, calculate the talent team headcount required to support the org’s hiring needs. You’ve calculated how many hours of recruiting time each role will require, and how many reqs each of your team members can handle. Now you can map the organization’s overall hiring plan to your own team. Obviously, the above numbers will vary greatly depending on other resources in place, including recruiting coordinators, the degree of hiring manager involvement, the organization’s use of agencies, and so forth.
Do a gut-check against historical data here as well. How many reqs did each of your recruiters carry (and close) over the past year? Did they struggle to hit those numbers, or alternatively, did they hit their goals every time and seem eager to take on more challenging hiring quotas? Allow one quarter of ramp time for the talent team before you’ll need that bandwidth to support hiring for the organization. So if your business teams will go on a hiring spree in Q3, the talent team will need to hire additional heads in Q2.
If the numbers in the above exercise vary significantly from the reality of the last year, make sure to have a conversation with your team to see where the differences lie. There may be an opportunity to gain efficiency, either through better tools, or through a re-evaluation of the recruiting process.
Have a contingency plan. What if the exec team doesn’t approve the headcount plan you’ve submitted? Or what if the company’s hiring plan changes dramatically with little warning? There are short-term, if costly, options to temporarily staff up during crucial growth periods. Agencies, RPOs, or contract sourcers/recruiters can help companies scale their hiring on a short-term basis. These options require almost no ramp time and can often convert an open req to a hire within a few weeks.
For longer-term growth, your team is better served by making full-time hires for your recruiting team. Hiring in-house sourcers and recruiters ensures complete alignment between a recruiting team’s goals and the company’s goals. They will also do a better job of selling candidates on the company, vision, and culture, given their perspective as a full-time employee. Agencies work on behalf of many companies, and their ultimate measure of success is number of placements, irrespective of where those placements happen and whether or not these hires stay with the company “post-probation period” OR “long-term.” Furthermore, if you are making more than a few agency hires per year, the fully loaded cost of hiring a recruiter will be much less than using an agency.
The talent acquisition team is a company’s No. 1 driver of success. An organization is only as successful as the people who work there, and the talent team is at the forefront of finding and hiring those people. To best support your business, put the same rigor into making sure the right people are on the talent team to anticipate, adapt, and fulfill hiring plans for the coming year.