The headcount, at its most basic, is simply the number of people employed by a business at a given time. Also known as a workforce census, understanding who works for you and where they are within your company allows for critical insight into the health and operational power of your organization.
Counting your employees seems like an easy enough task, right? As straightforward as this HR measure sounds, it is also highly complicated, and the resulting census numbers can differ depending on the standards applied during tabulation. In order to plan your budget appropriately, remain legally compliant with certain workplace regulations, and strategize your workforce, you need to get this metric right.
What is an employee headcount report?
As stated in the introduction, an employee headcount is in essence an account of the entire personnel base for an organization. A complex census report will contain information on an individual employee which may be relevant to their employment status, eligibility or exemption from certain benefits and privileges, and other classifying variables that may affect business planning and projection.
Typically, an individual headcount report contains the following information:
- Job status - whether the employee is active or inactive, for various reasons.
- Schedule status - whether the employee is part time or full time.
- Exemption status - whether an employee is exempt or nonexempt from receiving overtime pay.
- Job title & position
- Veteran status
Generated employee reports which contain the above details on individual employees allows an organization to track and sort an employee base by specific classifications, ensuring compliance to certain legal obligations regarding hiring practices, employee benefits, and other factors.
Additionally, if there are workforce goals that a company has, either in terms of growth, diversification, redistribution of labor, internal promotions or external hires, companies may leverage the information generated in these reports to guide workforce planning decisions and strategization.
Why Employee Headcount Tracking Matters
There are four key reasons that employee headcount tracking and reporting is a critical undertaking for any business, all briefly stated in the preceding paragraphs.
- Employees may either be classified as exempt or non-exempt, meaning that they either do or do not qualify for overtime depending on their job description, schedule, and rate of pay. A nonexempt employee is defined as a worker who is paid less than $23,600 a year, paid hourly, and in a non-supervisory position. Exempt employees are salaried, in supervisory positions, and earn more than $100,000 a year. The definitions may change depending on industry and locale.
- Employee compensation and benefits obligations on the part of an organization may change depending on the number of workers on staff at any given time. If a company has over 50 full-time employees it is required to provide the workforce with health care benefits, as well as job-protected medical and family leave.
Beyond legal considerations, a headcount may be required when a company is making budgetary changes and must consider how shifts in financial planning will affect pay raises, insurance premiums, and other company-wide or departmental financial decisions.
- Organizational compliance to equal-opportunity laws are also activated by the number of people employed at a given time. Businesses with over 100 employees are required to perform demographic reporting, relating to sex and race, which demonstrates a concerted effort to diversify the workforce and provide equitable employment to underrepresented members of the population.
- Workforce planning is heavily informed by headcounts. This includes general departmental planning, as well as human resources planning.
Best practices for HR demonstrate the need to have one HR staff member for every 100 employees to provide adequate access to service for the employee base. And, understanding the status of the workforce can help leadership to strategize human planning to meet the business goals of an organization.
Best Practices for Employee Headcount Report and Tracking
Headcounts are sometimes measured differently by separate departments according to their own needs and standards of what qualifies as a “worker”. This can obviously result in some confusion, and ultimately creates more work for everyone involved. In this section you will find a few best practices to follow to keep your headcount report working for you.
- Define a universal worker. If cross-business, financial, and HR headcount reports are all showing different numbers, something isn’t lining up. The solution is to define a universal worker across all departments for an accurate and all-encompassing look at your employee base.
- Define a universal headcount. How you are counting your workforce matters just as much as who among them is being counted. The resulting report from your headcount tracking should be universally accessible across departments, for the ease of all.
- Make your headcount report a dynamic record. Often, headcount reports are generated on an annual or semi-annual basis. But to operate strategically and leverage your headcount tracking practices to the greatest degree of return, your reports should update in real-time, allowing your workforce plan to respond quickly, and as the needs arise.
Final Thoughts: Employee Headcount Report and Tracking
Knowing who works for you at a given time can be a major tactical advantage to planning your workforce, budget, and more. This complicated but critical operation will keep you in compliance and strategic when making employee decisions.
As you hire employees at a larger scale, you’ll need to find ways to automate and simplify processes. The same manual processes just won’t cut it as your hiring needs grow.. For example, reference checking is one of the most essential aspects of hiring. When your hiring needs are really small, checks can be done manually (by phone). But as soon as your headcount grows, performing checks manually will cause your important success metrics lag, including recruiter time spent on calls, overall time-to-hire, and even quality of hire. If you haven’t automated your hiring processes, your team will easily fall short of goals. Start with reference check automation. Find out more here.
Also, are you interested in finding out what other metrics you should be tracking and reporting on to communicate success to the exec team? Make a copy of our TA Metrics Dashboard to quickly build reports of the most critical metrics to measure success.