Archive for June, 2008

Set a Budget and See if it Sticks – A Scalable Approach to Meeting Hiring Objectives?

June 9, 2008

Granted, we all must establish operational P&L budgets that are reflective and supportive of company goals.  Some fixed costs, like capital expenditures or rent, are fairly easy to predict.  But what about human capital?

You enter a line item for an incremental Project Manager hire, yet what is the basis for entering the anticipated cost – the last PM hire you made 9 months ago?  An amount you believe is fair for the position?  Or was it an amount that kept your budget intact?

When you went to market with your product or service, did you come up with the pricing in the same fashion?  Of course not!  Amongst other things, you conducted considerable competitive intelligence and elicited input from industry experts as well as potential customers.  Why would budgeting for headcount be any different?

A number of our clients and potential clients contact our firm to seek input on their headcount budget.  In this highly competitive talent market, where for every candidate you’re trying to allure, there are 7 other companies doing the same, you must be prepared to do what it takes to attract and hire the top talent.  A good starting point is to talk to the professionals who are plugged in to the market, have placed candidates for the types of positions you seek to fill, and can recommend in no uncertain terms an attractive package it will likely take to get the right people on the bus.

You may be under the impression that candidates will be willing to take a cash compensation cut just to join your special company, but is that really a scalable approach to building out your organization with the top talent?  The most successful companies at meeting their growth objectives (i.e. hiring objectives) are the ones that include realistic place marks in their budget based on current talent market trends.  Yet, to take it one step further, these companies prioritize getting the right people on board above meeting a budgetary line item and in turn, let the market dictate what that will take.

Action Items:

  • Seek input from industry experts prior to establishing your headcount budget
  • Remain humble and flexible in this highly competitive talent market
  • Prioritize getting the right person on the bus over meeting a budget line item