Mid-Year Headcount Planning: How to Execute H2 Reforecasting Without Operational Tax
Podcast Overview
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Eric Guidice: Headcount experts, Eric Guidice Chris Mannion. This time it's about re-forecasting or just forecasting headcount for the first time. But the idea that it's June, and most companies are taking a look at H2 now and saying, is what we decided to do good? And should we continue to do that or should we change it some type of way? We're here to talk about all of that. Whether you're a part of the process, whether you're affected by the process, whether you're scaling up, scaling down, or you're just kind of moving things around for a similar budget outcome. That's what today's episode is all about. Chris, you're actually working on a new module, as I understand. For meander for your SHRM certified courses. You wanna talk about that first? You wanna talk about what you're building right now?
Chris Mannion: Yeah, and it hopefully should be out in the next week or two. But this is the first of a longer certificate track that's going to just help to get people up to date with some of the planning and analysis that we have talked about here. This module is focusing on headcount capacity planning for new in-seat talent leaders who've never done it before. So if you have never actually built a headcount plan before, you've always had it handed to you. And now all of a sudden you've got a plan 2027 or H2 2026, and you've got to stand behind the data. Hopefully this is going to help you get up to speed. And one of the kind of the big angles I'm taking is how do you actually work alongside AI to produce the model that's based on your data and your understanding and not trying to defend the data that an AI model spits out to you when you actually get in front of the senior leadership team? Because that's where I see a lot of people fall short. So I'm actually really excited. I'm actually just working on the most fun aspect, which is pivot tables and forecasts, which is where it's my Zen spot, that's something that's coming real soon.
Eric Guidice: That's where you excel? Sorry. I actually might cut that, okay? I might cut it. You know, from our angle, you know, I've built them. I have a couple articles on headcount 365 about how I've done it. I have a download list about how to reforecast headcount, a checklist, which I may or may not flash on the screen now. But generally Chris and I have done this a bunch of times before, whether it's a support role for a leader that's in seat as leaders or supporting customers with their own data set. And for Chris's course, if you are pursuing SHRM or maintaining SHRM, these courses can be redeemed for credits. I don't even know if I'm saying that correctly, but you can continue in your pursuit of SHRM or your continuation of SHRM by taking this course, and so highly recommend it, obviously, because Chris is the smartest headcount planner I know, myself included. So take a look at that course when it's ready. I'm sure we'll post it and maybe even do a little preview of it here, but let's start off with headcount reforecasting 101 or headcount forecasting 101, right? There is you're either in the process and you're having the discussion, you have to navigate that conversation, or you're outside of that process. So those are the kind of two contexts, and you have to kind of deal with the results. You're either forecasting up, down, or flat, and each of those has a context. And then every team that's not in the conversation needs some sort of interaction to understand what the results are. So the business can operate in kind of like one central motion post-reforecast. So that's kind of the highlight, the high level that I think we'll cover today. Am I missing anything? Anything else you want to talk about today?
Chris Mannion: No, I think this read forecast mid-year is a critical point because it's normally the first time that you'll really see whether the initial assumptions held true and you're on track for the goals or whether actually something big has changed and that changes the goals that you initially planned against. And so quite often it's like Q2, Q3, I'm sure for you as well is normally the busiest time when I got a lot of inbound calls and people who are now trying to figure out how did they get back on track in the second half of the year. So I think this is perfect timing for a lot of people that are going through this process. But I think we're gonna really get into the weeds on actually how to go about this and I'm really excited about it.
Eric Guidice: Yeah, I think amazing transition. Not sure if you see the list that I put out there, right? But step number one, understand the driving factors of the reforecast. So if you're the person in the conversation, that means bringing the data. Did sales targets change? Did AI change the way you do product development? Is there a fundraise? Is there some sort of new business goal? Like, why are we doing this? Is kind of the number one step to then make a call about how you do every step thereafter. I think every person, whether it's kind of been we're doing it today in June for H2, or you've just kind of been over the course of time seeing how the different AI models change the way your business works. From a productivity standpoint, you are understanding how this change is going to impact how you hire in the future. So if you know what it is that you wanna do with the headcount reforecast, the rest of the process kind of falls into place much easier. It's much more difficult to get a team to work off of the same page if you don't even understand the real reason why you're doing it in the first place. Any part that I'm missing in terms of like why someone would do it or how they should do it?
Chris Mannion: I think the big difference is that going into this re-forecasting period, it's a lot more tactical. It's like you're in the process right now. So whereas you would have done the strategic forecast back in Q4 of the previous year, and there's a lot of back and forth and negotiation, and you're trying to figure out what is the polished version we're going to present to the board. I think this is a lot more gritty. It's like you're actually getting into the weeds. You're like, okay, why did we not hit the goals or what did change? How do we actually adjust the numbers on the fly? So I actually think this is a funner part of the forecasting process because you can actually do a lot more applied analysis rather than just trying to predict the future, which never works. So I think if you're in the process, whether you were involved in the Q4, like long-term fiscal year plan or not, I think it's really important that you get your head around all the assumptions that were made in the previous planning cycle so that you can come in with the knowledge that you're not going to make the same mistakes again if mistakes were made.
Eric Guidice: Yeah, I think one of the main things that I've done to support a leader in a reforecast is delivering that level of context to the person in the meeting. When I've been in the meeting, not only am I taking that data and applying it in the situation, but I am kind of like adapting to what everyone else's data is. But as a person who's going to help prepare your leader for a headcount reforecast, one of the biggest places I used to start was the plan change rate. What did we think was gonna happen versus what actually happened and what the reason for that deficit is or surplus, right? So if we thought we were gonna hire people and didn't, we want to know if it's recruiting capacity or business changes. If we thought we were gonna hit a sales target and we didn't, was it the seller performance, was it the business performance, was it product, was it macroeconomic? So I think understanding the delta of what was supposed to happen or what was intended to happen versus what actually did, and then the reasons behind that. In the form of your department's data is kind of the foundation for how am I gonna make a change in the future starts. And have you had to put together data for leaders or as a leader to kind of talk about that delta in context and did anything stand out to you as kind of like this is the North Star metric for how I make the baseline for my reforecast?
Chris Mannion: Yeah, I think you've touched on all the points there. I think you want to know, did you hit the number that you forecast or not? And then did that forecast goal change? So there's two ways that you could have missed the forecast. Either the goal was set and there was some kind of input or some kind of activity variance that meant that you didn't actually hit that goal, or the goal actually changed at some point through the planning period and you would have hit the goal but the goal post moved before you had a chance to hit them. And I think it's really important to understand which of those two or if both of them happened and then what were the underlying reasons that that changed. Because then you could actually, as you start to re-forecast for the second half of the year, you can actually take those into account. And so if it's a recruitment capacity issue, which is often where I see these kinds of challenges, you can try and figure out, okay, why did the capacity not deliver the hires that were needed? Was it a, do we see higher than expected attrition in the recruiting team? Did we just not close the number of candidates that we expected because our comp plan is not aligned with the competitive marketplace? Or do we not have the right employee value prop? Did attrition spike higher than expected? And so we would have hit the goals, but for the attrition. I think it's really important to be able to kind of parse out the reasons. So you have the kind of like assumed goal and then the actuals. And then for each number that was missed or each number that was over, kind of a line item saying, you know, recruiting capacity, negative 10 hires because we didn't have enough recruiters because we didn't get authorization for our new recruiting hires in time. And so you start to kind of build this table that's then going to go in front of the senior leadership team when they start to understand what's happened and diagnose and actually come up with next steps. And I think that's where I've often leaned in most because to actually get to that, you actually do need to analyze a lot of the underlying data, but actually view it from a leadership perspective. They don't really care if your time to hire shifted or cost per hire or the metrics that we might want to track as a TA leader. They actually care about what are the levers that they can use to move and where were those levers not put in place effectively enough so that we can actually make that change moving forward. And so you're kind of coming in not with excuses, but with a plan moving forward for actually what you're going to do next time around.
Eric Guidice: In the three ways that you can do a reforecast, right? Staying flat is where the context of recruiting performance matters the most because people are going to be changing things that are active or adding new things with new deadlines, and the context of recruiting performance allows that team to understand whether or not they can hit those goals based on the hiring metrics, like the pure facts of I can fill something on time or not. If the business is going down, or you're declining, or constricting whatever, then recruiting performance is a little, it's more a little bit about : Do we still need you to be that big? And in the world of acceleration, it's a lot more of a dollars conversation where we just want to have people in the seat and the cost of acquiring the person is less than the value that person would produce in the seat given our growth trajectory. So we need to be able to articulate like what is possible with our team, how much will it cost, and how much can my team support? So, from a recruiting leader perspective, at least, what you're doing is you're managing that team's contribution of budget, contribution of hours to interviewing or funnel review so that they can hit their targets. You are kind of balancing for that operator: what do you need to do in order to hit these goals, or can I do it myself? And I think that is true not only of recruiting, but every individual team is coming to the table with some sort of compromise of this is what I need based on the context of this reforecast, up, down, or flat.
Chris Mannion: Yeah, and I think that the downside, the downside scenario that you just explained is probably one of the hardest ones to deal with, kind of going into those reviews and actually realizing that you have more capacity on the recruiting team than you need. And at that point, you don't want to be going to the meeting and showing that you want to be going with a plan for actually how you're going to reduce capacity, reduce cost, and still deliver against the goals. And so it can be hard if your team has overachieved in the first half of the year and now you have too many people because you're probably having to let go people who are over performers. But actually having a plan of action in place is going to mean that you don't get that plan of action put on you. I've seen many teams go into Q3 with a kind of forced action plan where they actually have to make some drastic headcount decisions. Whereas if you would forecast this a little earlier, you could actually start to think about not backfilling attrition and reallocating resources to kind of different teams in kind of a more organic way to adapt your capacity to the needs of the business. And I think one of the kind of biggest challenges that I see some leaders go into these conversations with is they obviously want to protect their team. They want to keep, they want to support everyone in their organization, but they're not thinking about the recruiting function from a business perspective, which ultimately is a cost line item. And so if you're not going in with a recommendation for how you're gonna adjust that, then someone else is gonna make that recommendation for you and you're actually gonna lose control over your ability to actually make the right call for your team. So I think that's one of the hardest parts, but perhaps one of the most important as you're thinking about the H2 reforecast. Ties back to everything that we've discussed around staying close to the business, think about the recruiting function from a business leaders perspective and a financial perspective so that you understand what's coming and actually can make adjustments ahead of time.
Eric Guidice: Off camera, I gave you the preview of our staffing scenario tool. It's in beta, probably not gonna flash on the screen, but you mentioned something that just caught my attention. Like, if you don't come with a plan, someone else will make a plan for you. But as you and I were kind of discussing the nuance of like what does capacity in a reforecast mean? There's the idea of like the long-term planning. H2 reforecasting is a very narrow focus of what do we need for the end of the year. And if you're under capacity, who's gonna make the decision about whether or not you have a full-time recruiter with their own hiring period and their own ramp time, if we don't even know 2027's headcount? And I think there are people who want the service of recruiting to just do what they want it to do without considering the overarching strategic makeup. I mean you can make the same thing: I need this feature delivered, so I'm gonna hire full-time engineers. Well, do I need that engineering capacity? I need sales today, so I'm gonna hire all these people. And so it makes less sense when you do it to other parts of the business, but there's this idea that recruiting is something that everyone can do and it's a shared ownership. And so they're gonna take their piece of that pie and try to accelerate or decelerate or whatever, the recruiting process. And as a functional data-driven talent leader, or the SHRM accredited, meander-trained, data-driven talent leader, you have to be able to engage in that conversation and defend not only in the moment of what it is that you need to do to make it through H2, but like what is the long-term impact. And here's the trade-offs that you're making by doing that here. Can be supportive and enabling of that conversation or even that decision, but you're bringing information to the table so that those people who have that great idea that sounds good in that moment because it helps you do the thing in H2 now have the full context and can share not only in the decision to make things done, but in the responsibility of the longer-term impact of doing so. And so I just think you're bringing up great things about like what is the context of the meeting, and just to summarize kind of like where we are and the context conversation now like understanding the driving factors of a reforecast. Why are we doing it? Are we going up, down, or staying flat? What is the context that we need to know about the recruiting capacity or the demand that helps us navigate the delta in what we thought was going to happen in H1 and what our expectations are in H2? And anytime there's a missed target or a delta in expectations, we want to understand the root cause of doing so. So having this driving factor, having the context, understanding the root cause of a missed target or an exceeded target, then helps manage the expectations of the different stakeholders throughout the process so that you can come up with this H2 reforecast. And there's a lot of stuff that we could go podcast on podcast on podcast about you know how to negotiate and compromise for limited resources, how to display the return on your particular agenda's ROI versus the rest of the business and how to compromise your position as a department leader in one area against another's as you compete for limited resources or how to opt in for fundraising or to like set context for like hiring triggers. There's all this stuff to do. I think that's gonna be the nature of your individual company and the context of your reforecast and where you're trying to go. This is the framework I hope that is underneath all of that. And I don't know if I'm maybe underselling or you wanted to get into some of those certain points, but like that's where we are today. And so now it's all about making a plan going forward. And what am I missing in that consolidation of where we are right now? Did I capture everything correctly?
Chris Mannion: I think so, and I think we're talking to talent leaders and negotiation is one of the core competencies of anyone that's in a leadership role in talent. So I don't know if we need to kind of teach people things they already know, but I think actually framing things up from the perspective of what the business is looking at, I think is a really useful skill. And especially people who are going into this process for the first time, they may get taken off guard by some of the questions that they get asked. And I think your point around understanding a little bit about the implications of different changes that people might recommend for the team and trying to understand the perspective of why those changes are going to be made is really important. Just from my own experience, kind of going through a period where the growth projection had changed quite significantly at the end of the year, from the start of the year, actually going through this re-forecasting phase, I had I was leading a campus recruiting team. And so my forecast was always 18 months ahead because I had to build the team in order to make the hires, in order to build the internship program and everything else. And so when I could see changes in financial forecasts, I actually had a long lead time to make adjustments and keep the capacity around about the kind of supply and demand about the same. The other teams that actually had a shorter horizon didn't quite have that flexibility. But what they did start to do is look ahead , so instead of going quarter by quarter and saying, okay, next quarter, we're actually not going to have the capacity. So my team size goes from 50 to 20. They actually said, well, we're actually going to reduce the capacity a little bit. But we know that the quarter after is when we see a huge spike in hiring. And so if we lay people off right now, it's going to take this amount of time to kind of go through that process. It's going to cost this amount. Then it's going to take this amount of time to rehire them and train and ramp and everything else. And so if we go through that process, we're actually going to miss our Q2 goals to save money in Q3 of this year. And so just framing it that way and saying, this is the trade-off. Now we can make this trade-off if that's a business decision, but you're putting at risk the goals that we have in Q2. And actually the mitigating factor that I'm going to have, and this is a real example, is what we're actually going to do is use these experienced recruiting resources to improve different areas of the business, like onboarding , certified interview processes, we're going to improve a lot of data so that we can actually improve time to hire in the coming year. So we're actually not just going to have people sitting around doing nothing. We're actually going to make some tangible improvements that's going to lower our future need for recruiting capacity as heads because we actually have all these improvements in place. And I've seen some TA leaders who've gone through this process several times really understand how to manage that process and come up with a very practical solution instead of being mandated to make cuts that then are very difficult to recover from in the coming year. So I think framing it that way, I think is hopefully very helpful for anyone going through this the first time. Because I've also seen the other angle where teams didn't have a plan and were just kind of given the plan by someone else and then had to recover in the following year, missed targets, underperformed and everything else that comes with it. And so I think that kind of framework I think is really important for anyone going into this process.
Eric Guidice: Yeah, I think last week we had Chris from Talentful on and he discussed kind of like how to leverage an RPO for situations like that. I'm curious to know if he was back here, if he has a busy spike during kind of these Q2 months because everyone's kind of changing their plan around and now needs these additional resources. And as you mentioned, balancing the cost versus productivity conversation, having an external kind of resource you can turn on is probably a great asset to have when you're getting these unexpected spikes in demand. It's a nice compromise of we don't lose necessarily the internal experience, but we can still turn on capacity for a cost that might be more expensive than if we hired them on our own long term, but gives us this level of flexibility. So I think it's just a very interesting conversation all the time in that meeting. But I think to summarize, if you know where you're coming from you are able to deliver the context of performance, explain the missed targets and rebase expectations. You can have a reforecast that the team is at a minimum considering what's possible when they deliver this net new plan for H2. And so now the plethora, let's fast forward through the negotiations of everything that's happening and the plan being created, etc. You now have a brand new H2 plan, which means some of the things from H1 stayed and you're working on them. Some of them are gonna close and some of them are brand new. What do you do from here on out, right? Do you have a three, four step process that is like, okay, the new forecast is now in my hands. What do I do next?
Chris Mannion: Yeah, I'd say that the thing I really like to do is, you start with the updated headcount forecast, you track the assumptions, and then you report back on progress to goal each month. I think if you can hit those three things, H2 is going to be much more successful and kind of going into each one. So re-forecasting, basically just taking all of the updated metrics and decisions from that meeting and projecting that for July through December if you're on a calendar year, and then looking to see what do we expect to happen. Updating all the assumptions and where those decisions were made and keeping a record of that means that you're actually going to be able to go back to the decision that was made in that meeting or in that email chain and point to that as a reason why you're making this decision or making this change moving forward and kind of keeping that as your kind of live source document so that when you get to October and someone asks you why the hiring process is a certain way, you can actually point back to the decision that was made. That's actually gonna help you when you go into next year's full year forecasting mode. And then the monthly reporting, I think is gonna be really important now because you're getting into the second half of the year when it's most important to hit the board briefed goals. You can actually start to track whether that's a burn down chart of kind of progress to target or kind of a monthly headcount forecast, which is one of my favorite ways to do it and showing what actually happened each month and how did that compare to goal and how far away are we from goal, whether that's maintaining an increase in or decrease in headcount or reallocated resources across the organization. You can actually have this visibility and six months is a nice period to track because it's enough time that you can make changes and see the results, but not so long that it's well outside the realms of ability to forecast. I think those three things are the recommendations I would make to anyone coming out of this period to make sure that they get to the end of the year in a really good spot.
Eric Guidice: Yeah, I think when you're managing up and you're setting this reforecast with an executive team, there's a new goal in the target to goal conversation. And so abstracting the performance into a conversation about target to goal and then using data to support any variance will help eliminate the lightning rod fallacy of the recruiting leader is solely responsible for recruiting performance only. The position of the recruiting leader from being the sole reason why everything happens to the manager of the process and the communicator of the data for any variance. The things I would add to your kind of three-step process is a little bit about how to manage down and out. And so when you have a changed headcount plan that comes from an executive meeting, not everyone's a great communicator about it. So to protect yourself from again the lightning rod of you've changed my plan, there's this idea of like any role that's going to have a change, delay, or cancel has a communication plan. What are we doing with this? Who knows about it? Why is it important? And what is their escalation path if they have a problem with it? And that includes recruiters who are counting on those roles, particularly the late stage roles, for their hires per month or meeting their production targets. So both of those people are probably not gonna be happy that something got taken away, and you need to just have a way to deal with it. So there's a certain level of things you can control with your team about the air cover of recruiters whose expectations about performance might be different, and to the hiring managers who are experiencing a change in what they thought was gonna happen with their roles, right? So there's this expectations management, then there's the outcomes of the tactical, right? So, like, what does the system look like? What does every position look like? How does the position and the budget ID and the plan ID and the headcount ID where do they go? And if things got, especially in things like merges or splits, we're gonna take these two roles, make them one, or take one role, split them into two. Is there a proper tactical identification system that's communicated from the headcount plan to the recruiting system back to the final finance system so that when these changes go from A to B, you have a history of that information of how it got here, and you have a net new tracking ID that everyone's aligned on across whatever corporate taxonomy that you have? Right? So there's that kind of outcome of the reforecast tactically that you manage. And then lastly there's the net new target to goal, which I think is everything that you're talking about about the monthly reporting is having a way to communicate to people that impact of the reforecast up front and get in front of any of the first month shock. I don't know if that's the right term I would give it, but like when you do an H2 reforecast, people approach that with like, okay, we said it, so that's gonna happen. And if they give you a net new role with a time to fill longer than their expectation of it being filled, or they just do things that are not necessarily possible, the earlier you get that information up, the easier it will be to handle the backlash of the missed expectation. Over to you. What do you think?
Chris Mannion: Yeah, I think I'm probably coming to this from an angle where as the person who's accountable for hitting the headcount goal, there's a lot of process that you need to start to think about putting in place. And quite often you have to be the headcount police, which is a real unfun place to be. And so that's why my number two there was actually creating that assumptions log, tied back to what you just said about, if a role comes in and it has a several months time to hire and needs to be closed before the end of the year, we're never going to fill that role. So I think making those kind of expectations clear. Likewise, if you agree that an individual's headcount is going to stay the same until the end of the year because they over hired in H1, and then they come in with 10 new recs in October because they have selective memory of the decisions that were made at the re-forecasting meeting, you need to kind of stand fast and say, no, we agreed that we're not going to make any more hires this year. So let's put them on the schedule for January. And it doesn't become, well, Chris said no. It's actually, the board said no because we put this plan in front of the board and this is what was agreed upon. And you kind of take yourself out of the situation where you become the least popular person in the organization, which unfortunately sometimes you need to be. But if your goal is to hit the headcount target, you kind of need to use the levers that you have available to make sure that the process is actually following best practice so that you can actually hit those end of year goals. I think realistically you can come up with some kind of collaboration and so those 10 recs that get put in front of you, you then start to think, well, where are we actually gonna make some swaps so that we can get those approved if that becomes a new priority area, it's a new area for R&D, what are we gonna pull back on so that we still hit our end of year headcount numbers, but we actually don't hinder the business in the kind of growth predictions moving forward. So I think it's kind of really important to be able to tie all those threads together, because otherwise if you don't stay very close to that, by the end of the year, you're all of sudden 10 heads above where you expected to be. And that comes back to this decision that was made where you weren't able to tie the impact of that request to the assumptions that were made initially. My really soapbox moment because I've been in those situations where I've had to kind of argue with C-level execs on not giving them the resources they need, but actually grounding that in data and not just in kind of vibes from myself.
Eric Guidice: Yeah, I think one of the things that I did when I was in-house and then that I've tried to kind of codify in the headcount 365 environment is the idea that this one reforecast happens in the moment of urgency that generated the reforecast. And so there's a lot of bias in the moment towards the action that that moment creates. However, if you've done an H2 reforecast every year, you're gonna have year over year information that is interesting that helps influence what's going on. So every year that you have a headcount plan by H2, there's roles that you haven't filled by now. There's things you filled on time, the things you filled late, things you filled above comp, below comp. There's net new roles that were added. There's backfills, there's attrition that you didn't backfill. So there's all this information that's happening 2023, 24, 25, 26, and then the context of this, same with sales performance, same with product development, same with revenue. There's all these things that happen year over year that you're getting all this data from to help inform the decision that when you're in that meeting, you might be competing with folks that have access to this historic information that allows them to have a conversation that you can't have, right? If someone's argument is, well, for the last three years this has happened, so that's what I need, and you don't have any information from your side to kind of talk about that from like a macro recruiteronomics perspective, you're just gonna be outgunned in that conversation. So, like one of the principles that kind of got me to where I was in my career, and then what I've kind of infused into Headcount 365 is that this data set should be talking to you all of the time, and the macroeconomic conditions of how did the business end up here should be an influencer in how you make a decision today so that you almost understand the headcount habits of your business. You understand who's over ambitious, you understand which leader always makes everyone a director, and it's always at the offer process, and we always have to go over comp. There's all this information that, in the moment, everything makes sense. In the moment, if I have to make someone a director at the end of the process to get them in, because or else we're not gonna hit a target, that makes sense. If I do that every time, 100 times, that's an issue that needs to be solved. So I think for folks that are doing a headcount reforecasting process really well, they are doing the things in the moment that we've talked about in this call that help them kind of navigate that moment. I'm a really good negotiator in this time. However, tracking the same thing year over year is gonna give you a perspective that has those moments of influence removed so you can make a much more objective decision and you can then filter that into the conversation where it's necessary during that conversation. Whether that filter comes during the reforecast or after the fact as you manage the expectations of the hiring team, the recruiters, any managers that were impacted, etc. I think it's a much more powerful set of data in aggregate than if you just use it in that moment alone.
Chris Mannion: Yeah, absolutely. And I think I would argue that if you're seeing the same issues happen year after year after year, then something is wrong. Something's broken in the process. I think you're taking as a junior engineer in the military, one of the first things that I learned was the post-mortem or the after action report of actually when something doesn't go according to plan, what happened, why did it happen? And what are you going to do to make sure it doesn't happen again? And so going into a situation where you're new in seat, you can actually look at historic forecasts and see whether the target was here. And if it wasn't here, you just need to know why wasn't it here and what was done to prevent that from happening again. Chances are nothing was done if you're looking at it fresh and you're starting to see the same situation. And so now you can actually start to put things into place. And so when you go into those discussions and the CTO says, well, I'm going to give you a target of 500 engineers because you never hire more than 200, you can actually say, well, historically, we never had the capacity because the forecast to capacity model was incorrect because we made some wrong assumptions. Now we've actually changed that model. And so if you give me a target of 500, I'm going to hire 500 engineers. So let's actually make the target more realistic and you can actually show the working and the reasons behind that. And that helps to build confidence. I think the trick is making sure that if you did put an action plan in place to resolve the issue, that actually works moving forward. Otherwise you're gonna lose the trust of the organization. But I think every issue I just like to know as a leader, as an engineer, like what happened? Why did it happen? Why is it not gonna happen again?
Eric Guidice: Yeah, I'm gonna close with this is a let's call this one a risky close. So one of my favorite business influencers, Nathan Fielder, did The Rehearsal. Did you watch The Rehearsal? The second season? Okay, the second season is all about pilots avoiding crashes because of the relationship of the pilot and the co-pilot, and it has nothing to do with
Chris Mannion: That's good enough. I haven't, no.
Eric Guidice: It that's his main the main reason for why these crashes are preventable because you need to address this kind of relationship between the pilot. And so what he does is he objectively looks at all of the crash data and understands the pilot logs, and in the moment understands the difference between why they're interacting like that and then tries to break that in the moment by surfacing to like the FAA this idea that there's something much bigger than just that moment, right? They need to do this other training, they need to have this other information. It comes from the macro data of all these crashes and it like proves why they're preventable. What I'm getting at for anyone who is a Nathan Fielder fan, you shouldn't have a Nathan Fielder come in and tell you that your business if he can come in and say something's wrong with your business, something's definitely wrong. And all he really did in that season was take a look at the macroeconomic information about why things are happening and extract an insight from data over time to then create something that would hopefully prevent crashes in the future and in his case bring awareness to the issue. But it was an extremely for me, that's like when I look at the same company doing the same headcount reforecast year over year that creates the same issues because in that moment they just want to do what's in that moment. It's a completely preventable kind of experience. And at a minimum the company should just know who they are and be prepared for those types of things. And it will help that executive talk to the board. It will help the shareholders understand value, but it will help everyone at the business kind of operate more effectively. And it's the Nathan Fielder approach to headcount. I don't know if that's gonna get me too far in life, but that's the first thing that came to mind when we kinda went down this conclusion.
Chris Mannion: I'm gonna take a look for this.
Eric Guidice: Watch it. It's definitely worth it. Okay. In an anticlimactic end to episode, I think 22 or 23 of the headcount experts. Next week, super exciting. We have Eric Lin joining us, who is the VP of finance at Tubi, at a number of different large companies, gonna give us some insights on a number of different headcount topics, whether it's the cadence of the financials or the underlying structure of the financials. So it's gonna be a tremendously interesting episode. I've also saved all of our content reactions for him so that we can see what he thinks. But join us next week on the Headcount Experts. Eric Lin will be joining us. Excited to have him on. And we'll be talking everything headcount and finance.
Mid-Year Headcount Forecasting | Episode Overview
Mid-year headcount reforecasting impacts budgets and recruiting production. The process can significantly impact the perception of the recruiting and finance teams, so we’ve crafted a process to help manage the process and mitigate issues.
Read the headcount365 blog on the headcount reforecasting process here
Sign up for Chris Mannion’s Headcount & Capacity Planning module on Meanderhq
Effective mid-year reforecasting requires a tactical, data-driven approach that quantifies the variance between planned targets and actual performance. Leaders must proactively present solutions to senior executives rather than receiving mandated headcount cuts. Done well, teams validate initial H1 planning assumptions, updates resource capacity models to match current macroeconomic realities, and ensures the business maintains fiscal discipline while pursuing shifting corporate objectives.
Key Takeaways from the this episode
Establishing “the why” behind the reforecast is critical to the process
Sets the Execution Baseline: Identifying the core driver behind the reforecast is the absolute first step that dictates how every subsequent decision in the process is handled.
Aligns Cross-Functional Teams: Pinpointing the change, i.e an AI productivity shift, revised sales targets, or a fundraise prevents organizational friction and ensures the entire team works from the same page.
Corrects Historical Mistakes: Uncovering "the why" forces leaders to analyze previous planning assumptions so they do not repeat past budgeting or capacity errors during the mid-year adjustment.
Data helps TA teams avoid being a lightning rod for all recruiting changes
Eliminates the "Lightning Rod" Fallacy: Recruiting production is an analytical conversation about recruiting capacity vs demand.
Isolates Root Causes Objectively: Leveraging data metrics, clearly differentiates whether a gap was caused by internal recruiting capacity limits or external changes to business goals.
Removes Personal Bias from Refusals: Utilizing a structured assumptions log allows TA leaders to ground hiring boundaries in board-approved data and financial realities rather than personal "vibes," removing the friction of being labeled the "headcount police".
Manage Stakeholder Expectations with communication
Build Targeted Communication Plans: Any open position that undergoes a modification, delay, or cancellation requires a formalized communication plan detailing the rationale and a clear escalation path.
Address Both Internal and External Stakeholders: Communication must manage expectations downward to recruiters (whose monthly production targets are impacted) and outward to hiring managers (who are losing or gaining resources).
Mitigate "First Month Shock": Utilizing monthly target-to-goal reporting early in H2 surfaces unrealistic timelines immediately, which effectively preempts backlash from missed executive expectations later on.
Headcount365 + Claude.ai help teams build better headcount forecasts
Integrate the Headcount365 dataset directly into an enterprise Claude environment alongside live sales forecasts, scheduling tools, and performance management metrics. This programmatic synthesis forces the language model to cross-reference pipeline velocity, actual seller performance, and interviewing throughput against hard recruitment capacity constraints simultaneously. By anchoring the Claude environment with Headcount365’s multi-year macro-recruiteronomics, you eliminate the latency and human bias inherent in traditional manual workflows. The environment delivers an instantaneous, mathematically optimized headcount forecast paired with an immediate, algorithmic action plan. Execute this technical integration to transition your organization away from reactive spreadsheet defense and establish an unassailable system of fiscal and operational discipline.