A Recruiting Leader’s Guide to the H2 Headcount Reforecasting Process
With the first half of the year coming to a close the H2 reforecast season is upon us. Recruiting leaders play a key part in the executive planning process by providing context about the overall service of recruiting. By analyzing the relationship between recruiting capacity and the ever changing recruiting demand, recruiting leaders can paint a realistic picture regarding the feasibility of desired recruiting outcomes. This is a key exercise in proving the operational capability and value add of a recruiting leader as a strategic partner of the business.
Download headcount365’s H2 Reforecast checklist here!
Step 1: Understand the driving factors to the reforecast
Timeline: Typically 30 days before the reforecast period begins.
Reason: Context for “the why” shapes communication to the hiring and recruiting teams, while providing guidelines for future solutions.
Recruiting Leader To Do: Listen for executive input to apply in future actions.
Sales Targets: Sales is a growth catalyst for headcount and is a leading indicator for changes in headcount demand. Missing sales targets often reduces headcount while exceeding sales targets will typically increase headcount.
Product Targets: Product launches often trigger headcount growth, especially for features in demand by existing customers. Cancellations, or slowing of new feature development will reduce the demand for headcount.
YTD Hiring Progress: Net new hiring growth is often conditional. This can be as broad as something such as account management teams hired after the on boarding of a sales team, or as narrow as not hiring the sales reps until the sales manager is in seat. If we’ve missed key high-priority roles that trigger additional headcount this will often create front-loaded hiring demand at the beginning of H2.
Utilization of Fundraising: New infusions of cash typically will spike headcount growth, while cash burn management will reduce it.
Productivity Reforecast: Can we do more with less? Reforecasts are critical times to challenge the productivity goals of the business.
Business Goals: Profitability vs growth? Location expansion? Launching that enterprise product? All of these decisions impact hiring activity. Business objectives are key drivers for headcount changes.
A Recruiting Leader’s key takeaways from step one: Understanding the context for headcount changes within your company helps build a unified communication plan for hiring managers, and recruiters alike. Helping those impacted by the change understand the reason for the changes increases buy in while reducing their cultural impact. Recruiting Leaders should walk away from step one with a communication plan regarding the reasons for H2 reforecast changes.
Step 2: Give Business leaders context for recruiting’s impact on achieving reforecasted numbers
Timeline: Typically 10 days before the reforecast period begins.
Reason: Recruiting leaders understand the health and efficiency of headcount production and give critical context during a reforecast. Objective reasoning for misses in H1 help prevent future misses in H2, while capacity & demand based forecasting helps recruiting leaders manage expectations for H2 recruiting production.
Recruiting Leader To Do: Pull key reports and deliver context to internal stakeholders.
Analyze H1 Recruiting Capacity vs Recruiting Demand: This is a critical metric to understand the capability of recruiting teams to meet H2 goals. Knowing your production goals and production actuals will answer questions about recruiting performance in H1, while setting expectations for what’s possible in H2.
Analyze Missed Offers and Starts on Time: Hiring on time is critically important to finance and executives as a start of a new hire on time triggers OPEX spend for salary, and production activity for executives. (Revenue generation for sales, product development for engineers) Recruiting leaders should be able to articulate whether or not key hires started on time, and the reasons for early and/or late starts.
Report on In-year Spend for Filled Roles: Headcount reforecasts always having a financial component. Without headcount365 to give real-time updates to the in-year spend of hires, an H2 re-forecast is one of the few times the overall headcount budget is recorded given the manual work it takes to produce this information. As a recruiting leader, you should be able to produce information about the current spend of all hired roles, and articulate the impact of salary negotiations, start date changes, and other key budget information associated with headcount.
Forecast In-year and Annualized Budgets for Remaining Roles to be Filled: The best recruiting leaders can produce an accurate projection of the remaining spend for roles to be hired down to the nearest dollar. This comes from a 1:1 match of everything the recruiting department is working on with everything on the finance plan.
Provide Variance Reporting: Understanding variance in total headcount requests and their associated budgets is absolutely critical to driving accountability in recruiter production, hiring on time, and budget accuracy. Recruiting leaders should be able to report all variance in the headcount plan, the timing & reasoning behind those changes, and use this information to drive accountability.
A Recruiting Leader’s Key Takeaways From Step Two: This data does two key things. First, the burden of recruiting production usually falls squarely on the recruiting team. Variance reporting helps recruiting leaders articulate how hiring manager requests or business changes have impacted the recruiting teams ability to produce hires. Second, it helps build the case for recruiting leaders to add capacity to account for these changes. Recruiting leaders should walk away from step two with data that helps them respond to business scenarios of what is possible as executives work to nail down the H2 forecast.
**Each of these reports is automatically produced by headcount365 saving recruiting leaders hundreds of hours of tracking information and producing reporting via spreadsheets.
Step 3: Answer key questions about YTD recruiting performance. Was performance, good or bad, a result of recruiting team performance, funnel conversion rates, or hiring manager actions
Timeline: Typically 5 days before the reforecast period begins.
Reason: Objectively understanding the current performance of your recruiting team gives executives confidence that you can reliably produce the output needed in H2.
Recruiting Leader To Do: Identify high performers who have produced above capacity. Objectively understand blockers from the three main sources below and provide solutions on how to unblock in the future. Investigate funnel volume and throughput to advise on sourcing requirements.
Funnel Conversion Metrics: Know your conversion rates and whether or not top of funnel volume supports the overall output needs of hiring. Understand interviewer capacity and the limitations of team interviewers on meeting recruiting demand.
Recruiting Team Performance: Know whether or not your recruiting team performance is a blocker to meeting hiring demand. Do they push requisitions to ATS on time? Are they making offers on time? What is their offer to accept conversion rates and are they at or better than the benchmark.
Hiring Team Performance: Know how hiring managers impact the ability to produce hires. Do hiring managers show up to interviews or reschedule? Are they filling out scorecards? Do they move the goal post for a good hire while recruiters are actively recruiting?
A Recruiting Leader’s Key Takeaways From Step Three: Recruiting leaders should walk away from step 3 with an understanding of the controllable inputs to recruiting production. Accountability for hiring manager performance should be distributed to the appropriate executives. Funnel and recruiting team performance management may require financial investment depending on the outcome of the H2 reforecast requests. Use objective data to build the case for additional recruiting support for H2 requests.
Step 4: Manage recruiting team culture during a reforecast “limbo” period
Timeline: Typically the entire duration of the re-forecast period.
Reason: Changes to the headcount plan impacts the work of a production based team who manages stakeholders who rely on their production of hires. Giving your team the information to communicate to their hiring managers while providing “air cover” during a period of change maintains a good recruiting culture. Transparency with your team on how ambiguity is not a reflection of their performance helps keep your team happy.
Recruiting Leader To Do: Deliver unified communication to impacted hiring managers. Prioritize roles that are still getting filled. Communicate with your recruiting team the impact of this reforecast on their performance. Set clear timelines for candidates in process for any roles “in limbo”.
Set Priorities: What are you definitely going to fill? Have a plan to communicate with all candidates in the roles marked as “maybe”. Unpost all roles in question. Pause new roles going out to the job boards unless marked as high priority.
Manage Candidates: Protect your late stage candidates experience. Candidates understand that businesses go through changes and respect transparency. Communicate every Friday if you are not doing that already to maintain high engagement and reduce fall off throughout the funnel.
Hiring Manager Communication: Hiring managers can sometimes be left out of the reforecasting conversation and internal communication channels need to be established during the reforecast process to ensure recruiters are not bearing the brunt of the blow back from hiring managers.
Continue Recruiting on High Priority Roles From H1 during Reforecast: Give clear direction to your team on roles to be opened during the reforecast. High priority designations can be leveraged to provide clarity regarding net new job openings.
A Recruiting Leader’s Key Takeaways From Step Four: This step is all about managing expectations for stakeholders. With clear communications you can maintain high recruiter and candidate NPS scores through ambiguity. Recruiting leaders should walk away from step four with an action plan of communication for navigating this ambiguity.
Step 5: Navigate common outcomes of an H2 reforecast
Timeline: The time between the executives locking in the future plan and releasing it to the rest of the company.
Reason: New plans require action from recruiting leaders to meet goals, and executives often focus on the outcome of having a person in a seat than the timeline or effort to produce it. Proactive expectation setting on resources, spend, and timelines help executives navigate the recruiting challenges associated with a reforecast.
Recruiting Leader To Do: Understand how the reforecast changes will impact the demand on your team and use time to fill, recruiting capacity, and agency spend data to proactively provide solutions.
Plan Date Shifts: Reforecasts often can change the desired start dates for roles. Understanding your time to fill, and the notice period for a candidate to quit and start a new role is the logic you need to manage your team’s workload balancing. Hiring managers with start dates that are moved up need their expectations managed about the recruiting time needed to post, source, interview, and offer a candidate. Location based notice period (US = 2 weeks, France = 10 weeks+) should be factored into total recruiting time.
Added Demand: Added demand should be factored into your existing capacity. Hiring additional recruiters takes time, and it’s often difficult to hire and ramp a new recruiter for an augmented H2 hiring plan. Contractors and agencies should be strategically planned for where your demand exceeds capacity for recruiters.
Lessened Demand: Lessened demand can lead to a surplus in capacity. Have a plan to utilize recruiters in different ways when there is surplus to improve process, systems or top of funnel candidate quality.
Conditional Hiring: Some roles trigger the hiring of other roles upon filling (Think VP of Sales triggers Sales Reps) need planning. Prioritize and invest in these “parent-level” hires as early as possible.
A Recruiting Leader’s Key Takeaways From Step Five: Reforecasts are often output focused, meaning executives are trying to hit business outcomes based on new employees being in their seat by certain dates. As a recruiting leader, you need to act quickly to account for these common outcomes to meet that business demand. Recruiting leaders should walk away from step five with an action plan to meet the demand with the updated changes.
Step 6: Team management following an H2 reforecast
Timeline: Immediately after the reforecast is released to the company.
Reason: Reforecasts are a time of rapid expectations management. Communication planning helps align all teams around a common goal and limits the frustration with change.
Recruiting Leader To Do: Communicate with all impacted parties, delivering a clear action plan for future work. Have a plan of escalation for disgruntled hiring managers, candidates, and recruiters.
Expectations Management: H2 reforecasts stop the normal flow of recruiting work. Your team should be aware of the process, and the potential “limbo” of work while the business understands if the roles are necessary.
Scorecard Transparency: Your recruiting scorecard should reflect the ambiguous conditions this month. Help mitigate recruiters stress of production by emphasizing the parts of recruiter performance management like data management, stale candidates, and projects that advance the health of the overall recruiting organization.
Communication Planning for Canceled Active Roles: Canceled roles are a big risk for your recruiting culture. You are actively interfering with the recruiters ability to meet their production stats used in performance management. Candidate’s processes are cut short. Hiring managers lose critical hires and will look to blame the speed or performance of the recruiting team for not making it happen on time. Recruiting leaders should leverage business managers to communicate these changes to the hiring teams. Canceled roles should be noted for performance management season. Candidates should have clear communication in email, with escalatory guidelines for candidates in late stages. Pipeline communication for these candidates should be set up in the CRM for future engagement.
Empathy for “The Impossible”: Sometimes, the requests coming out of the reforecast are impossible. What that means is that a new role might emerge that must be hired by a date that’s sooner than the amount of time it takes to hire someone and have them start. This may also mean that the volume of hiring greatly exceeds recruiting capacity, or even hiring manager interview capacity. As recruiting leaders, our job is to make things happen and push for these impossibilities as a best effort solution. Having empathy for your team during these periods of high stress when managers have to make hires to hit other targets is critical. Giving them air cover with the right data to protect “missed offer dates” of these impossible tasks will increase your credibility with your team while giving you the tools to drive accountability within the business.
A Recruiting Leader’s Key Takeaways From Step Six: Recruiting leaders should recognize the high demand for their people management resources as H2 reforecasts generate a large amount of uncertainty across the team. Recruiting leaders should walk away from step six with an action plan to field questions, and build comfort around the new forecast and it’s impact on the recruiting team.
headcount365 is a workforce planning and headcount management software that can play a key role in supplying the data and insights for a recruiting leader’s input in the reforecasting process. By automating the production of reports like viewing your team’s forecasted capacity vs. actual demand, hires on time, in-year and annualized budget, and many others, recruiting leaders can focus their time on applying solutions rather than collecting and organizing data. No more last minute data scrambles with recruiting operations or people analytics. Headcount365 provides usable data to give recruiting leaders operational superpowers.