Spreadsheets vs. Headcount Software: 5 Reasons to Make the Switch
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If you're a Talent Acquisition Leader, Strategic Finance Leader, or HRBP struggling with a complex web of spreadsheets to manage your headcount, this article explores the benefits of transitioning to a system designed specifically for headcount management.
Before starting headcount365, I built hundreds of recruiting tracking spreadsheets to have a source of truth for all recruiting demand. I’d then build formulas on top of the data to help manage my team, my stakeholders, executives & finance. They were extremely painful. Here’s why.
The Best Headcount Tracking Spreadsheets: An Overview
Because the market has not had a tool like headcount365, there have been years of investment in creating spreadsheets & processes to compensate for the gap. It’s a cross-functional process, with different teams needing different data & processes to make it work. Let’s review.
Best Metrics Each Team Includes on Their Headcount Tacking Spreadsheets
Existing Employee Data
Total Headcount - The total count of employees and their associated employment information (Job Level, Salary, Tenure, Performance score) is transferred to spreadsheets so HRBPs can guide budget owners on employment decisions.
Compensation - Job Level & Salary Framework, including equity, benefits, and fully burdened cost of employment, helps budget owners manage their total spend as they add new employees or request changes to existing.
Future Hires / Active Recruiting
Total Hiring Plan - How many people will I hire, and what is the budget & org makeup of these hires?
New Hire Onboarding - Tracking variance created from new hires helps budget owners manage FP&A numbers.
Recruiting Performance - Recruiting capacity vs demand, offer-to-accept rate, time to fill, and other critical performance metrics are all pulled from systems and tracked and modelled in spreadsheets.
Budgets, Approvals, Scenarios, & Variance
New Hire Change Requests - Requests & approval tracking for hiring manager “horse trading” of roles. Whether they are merging 2 roles into 1, adding & eliminating, or delaying hires, these change requests are tracked in spreadsheets.
Internal Mobility & Attrition - Internal transfers, status changes, and pay changes are all requested in email and tracked in spreadsheets.
Hired to Goal Variance - Budget, start date, title, level, and other key variances are tracked on spreadsheets.
Total Budget - Salary, equity, labor burden by location & level is a financial model built for HRBPs, Budget Owners, and FP&A to align with the budgets stored in your FP&A tool.
Headcount Planning Spreadsheet Process Best Practices
Consistent Updates (Feedback Friday)
Update the status of every requisition for all teams on a schedule. For spreadsheets, I used to run a process called feedback Friday, where at the end of every Friday, the recruiting & HR teams would update our spreadsheet trackers so Finance had accuracy on Monday. Headcount365 does this automatically, every minute.
Unique Identifiers for Every Requisition
Budgets change. Titles change. Transfers happen. Without a unique identifier that’s recognized by all teams regardless of the change, you’ll lose track of the budget. Linking this number to at least one of your systems (either FP&A or HRIS) creates alignment to prevent reconciliations.
Track Change History
Before headcount365’s activity feed, I used to have a notes column for every requisition on my headcount planning spreadsheet. Sometimes it would link to a doc where I manually tracked its changes, and other times it would include a one-liner so I had context in a meeting.
The Real Cost of Managing These Spreadsheets
Headcount tracking with a spreadsheet is flawed. Even the best headcount spreadsheets have fundamental issues that create inefficiencies & inaccuracy that impact the productivity of FP&A, HR, and Recruiting teams.
Time Intensive
Every team has its own siloed spreadsheet that needs multiple reconciliations to capture all of the activity from a given week. Hires, Terms, and changes that require updates to FP&A and HR teams so they can stay on budget.
Reconciliation Meetings: Each sync meeting takes time. If there are discrepancies, there's even more time investigating the cause or seeking approvals.
Labor-Intensive Maintenance: Maintaining a headcount tracking spreadsheet takes significant time and effort to ensure all data entering and exiting is accurate. It takes even more time if something goes wrong. Recruiting leaders need a tool that can keep track of things automatically, so they can spend less time maintaining data and more time acting on it.
Productivity: Spreadsheet maintenance diligence that often gets sacrificed in lieu of production.
Low Accuracy
Spreadsheets require the use of complex formulas that live in individual cells. Data access is not easily controlled. Multiple updates from multiple users create confusion. Spreadsheets are never truly accurate. Here’s why.
Human Error: Cells get deleted, formulas get broken. Copy and paste errors mean the source data may not be accurate. Spreadsheets are vulnerable to mistakes made by human data entry.
Tracking the Changes to Headcount: Changes are not tracked and often have a delay from when they are entered by a department to when they are represented on the spreadsheet.
Data Accuracy: There is rarely a moment when all departments are fully reconciled to the master file. In order to get your data accurate and produce an executive summary, QBR, or board slide, there must be a time-intensive and costly team-wide meeting.
Missing Safeguards: If a hiring manager wants to add something to the plan with a start date that does not give enough time for a recruiter to fill the role, there are no safeguards or warnings to do so. This applies not only to time, but compensation, level, and other key factors that may need sign-off before being accepted into the hiring plan.
Version Control
If the hiring plan is reforecasted, a new spreadsheet is typically created, or the existing one is updated to reflect the new headcount plan. Changes to individual requisitions on the headcount plan are often lost, causing head-scratching moments in the future during reconciliation.
Lost Data: When a reforecast requires the creation of a new spreadsheet, the old spreadsheet is often deprecated, losing the data that helps tell the story of the recruiting demand.
No Individual Change history: Changing a req, and even more — the reason for changing a req is lost over time.
No YoY Data: The history of headcount activity is missing. Without macro-level data about headcount, businesses can not learn from their previous actions.
Missing Integrations
The only way data gets into or out of a spreadsheet is if a human makes it happen. If a requisition is ready to be published, it has to be manually entered into the ATS. If a company is using a unique requisition identifier, the responsibility of accurately entering it between systems is on the person performing the data entry. When hires are made, a report from the ATS must be manually input into the recruiting leader’s spreadsheet.
No Sync with ATS: Every user needs information from the ATS, but it’s currently a manual connection, run by recruiters who update headcount planning spreadsheets with the status of every req.
No Sync with HRIS: New hire reconciliations, internal mobility, and budget changes are all siloed in the HRIS.
No Sync with FP&A: Tracking budget-to-actuals is a monthly exercise in most companies. This means FP&A teams have accurate headcount data (70% of their budget) 12 times a year.
No Integration of hiring managers’ data: If one manager is transferring a role to another, it may leave their spreadsheet and never end up on another.
Lacking Actionable Data
Headcount stores critical data about org structure, recruiting capacity vs demand, budget, and compliance. Spreadsheets are tactical solutions to action headcount, and are not designed to capture this data.
Accountability: It’s difficult to drive accountability with missing information about requisition changes & their impact.
Org Structure: Span of control, empire building, and overhiring are common issues with spreadsheet-based headcount processes
Real-time budget: Hiring managers & FP&A do not have real-time data to make budget decisions, delaying approvals for change, and creating significant OPEX variance.
Change Impact: The only way to tell if a cell has changed is to remember the previous value. Activity tracking on spreadsheets is too broad to drive accountability to those who make changes. Any context for a change has to be noted manually, and can not be a requirement for a change.
Transitioning From Headcount Spreadsheets to a Headcount Management System
It takes the same amount of time and effort to move to a headcount system as it does to create next year’s headcount plan. Simple API integrations with user access auto-provisioned from your HRIS, headcount365 links headcount from your FP&A & HRIS tools with one single source of truth.
Key changes:
Integrated HRIS, ATS, and FP&A
One unique ID for every headcount across all systems, with AI summarized activity feeds for every requisition. Requisition data seamlessly flows from HRIS to HC365, from HC365 to ATS, and back to FP&A.
One headcount source of truth without any maintenance
All headcount data is automatically updated across all systems. Instead of updating spreadsheets, headcount365 does that for you.
Requests & approvals move to a consolidated system
Any change request happens in a consolidated system instead of Slack and email. Configurable to any process, this eliminates the constant tracking & status updates associated with changes.
Reconciliations are automated
Instead of reconciling budgets to actual or new hire starts, headcount365 does it automatically. Spend time investigating discrepancies, rather than inputting data across systems.
Self-serve headcount data instead of update meetings
Hiring managers have access to relevant HRIS and ATS data without needing an update meeting with a recruiter. FP&A knows the status and budget of every headcount from every system without needing an HRBP or recruiting update.