What Does Headcount Mean in HR?
Headcount in human resources simply refers to the number of people employed by a company at a given time. Learn more.
What does headcount mean in HR?
At its most basic level, “headcount” in human resources refers to the number of people a company employs at a given time. Of course, as complex as a company’s workforce organization can be, there are many nuances and factors to consider when tallying the actual headcount.
In reality, employees can—and should be—categorized in a number of different ways for reporting, organizational, and planning purposes. A headcount, therefore, is not only about tallying the total number of employees, but also categorizing them according to a variety of characteristics.
How does job status impact headcount?
Counting heads suggests that each individual will be counted once as a whole number—one. Yet, headcount is a bit more complex than that. Consider, for instance, the difference between a full-time and part-time employee, a seasonal employee, or a contract worker. How should employees on parental leave or FMLA leave be counted?
While there may not be definitive answers to these questions, they’re important questions for HR leaders to consider in establishing the methodology for how they will calculate headcount so that they can trend these numbers over time and be confident in the validity of these numbers.
How should we calculate full- versus part-time employees?
Should an employee working full-time an average of 40 hours per week be counted the same as an employee who works 30 hours per week? No. Some simple math can help us come up with the appropriate number. Generally, the latter employee would be considered a .75 FTE (full-time equivalent) for headcount and other purposes, using the standard 40-hour work week as a barometer.
How do seniority/pay bands come into play?
Aside from more precisely defining who to count in an HR headcount, it’s also important for various reasons to think about how to count staff. Seniority levels and pay bands are prime examples. In addition to knowing that a company has 500 employees, it likely would also be important to know that it has 350 employees making between $30,000 and $75,000 per year, 100 making between $75,001 and $125,000 per year, and 50 making $125,001 or more per year. It may also be useful to know how many people fall within specific seniority ranges—e.g., less than one year, one to five years, six to ten years, etc.
Conducting an HR headcount might seem as straightforward as gathering everyone into a room and literally counting heads, or simply counting how many paychecks went out on the last payday. But HR headcounts are more nuanced and complicated than that, taking into account employee classification, as well as seniority or pay levels.
