Headcount Plan

What a headcount plan is

A headcount plan (الملاك الوظيفي) is the approved list of funded posts in an organisation for a defined period: how many posts there are, in which department, at what grade and cost, and when each one is expected to be filled. The process of setting that list is called headcount planning.

How a headcount plan differs from workforce planning

Workforce planning estimates the need. It shows the gap between the workforce the organisation will have and the workforce it will need. The headcount plan is the part of that need which has been approved and funded.

The two figures can therefore differ without either of them being wrong. Workforce planning may show a need for ten posts while six are approved, and the difference is a budget decision, not an error in the calculation. The four posts that were not approved remain a need that the organisation has decided not to fund in this period.

That is why the two are examined together. The first states what is required, and the second states what has been authorised.

A third planning concept sits beside these two. Capacity planning asks whether the working hours available in a particular period can absorb the work expected in it, and its unit is the hour. The headcount plan asks how many posts have been approved and funded, and its unit is the approved post with its cost.

The headcount plan and the job requisition

A job requisition draws on the headcount plan. Each approved requisition takes one post from its department’s balance, and each departure returns a seat to that balance. The balance here means the approved posts in the department that a new requisition can still draw on.

Without a visible balance, approving a requisition becomes a signature by someone who does not know how many posts remain. The person approving it cannot tell whether the request falls inside what was authorised or adds a post the plan never funded.

This link is what makes the headcount plan a living document rather than a table prepared once a year. Every requisition and every departure changes the balance, so the plan is current only if those changes are recorded as they happen. Once a requisition is approved, the post moves into the stage that time to fill measures: the days between opening a requisition for a role and the day the person appointed to it starts work.

The unit in which a headcount plan is counted

The unit is declared before the number: people, or full time equivalents. A full time equivalent counts capacity rather than people, so someone who works half the full schedule counts as a half. It is the same unit that forms the denominator of revenue per FTE.

A department of eight people, some of whom work part time, is not a department of eight full time equivalents. Its count in people is eight, while its count in full time equivalents is lower, by an amount that depends on how many of the eight work part time and for how many hours. Combining the two units in a single table produces a total that cannot be compared with anything, because one row counts people while another counts capacity, and the sum is neither.

The same choice arises with the employee growth rate, which can also be counted in people or in full time equivalents. One split that can be used in a headcount plan is to keep the count of people for administrative tracking, and full time equivalents for cost and for comparison between departments and between periods.

What a headcount plan should show

• The post, not the person. It counts seats, and the person holding a seat changes. When an employee leaves and someone else takes the same post, the number of posts in the plan stays where it was.
• The status of each post. It records whether the post is filled, vacant, or approved but not yet opened. The three answer different questions: who is in post now, which posts are waiting to be filled, and which authorisations have not yet been used.
• The reason for the post. It states whether the post replaces someone who left or is a new position. A replacement keeps the structure as it was, while a new position adds to it.
• The expected fill date. It determines how much of the post’s cost falls in the plan year. A post filled at the start of the tenth month of the year carries three of its twelve months, which is a quarter of its annual cost in that year.
• The grade and pay range. It sets out the grade approved for the post and the pay range attached to it. These are what allow each post in the headcount plan to carry a cost and not only a number.

What empties a headcount plan of its meaning

• A headcount plan that is not updated after approval. It becomes an old table against which a new reality is compared. Posts filled, vacated or added since approval do not appear in it, so every comparison made against it measures the present against a position that no longer exists.
• A post whose holder leaves and which stays open with no decision. It is counted as standing in the plan, its pay is counted as a saving in operating costs, and the effect of its absence appears in a third place.
• Figures built on departmental requests rather than on the organisation’s plan. They turn approval into an annual negotiation that the loudest voice can win. The headcount plan then reflects the outcome of that negotiation rather than the organisation’s plan.
• A count with no cost. It gives a figure with no amount against it, and a figure with no amount cannot support a decision. Approving a number of posts without their cost leaves the budget consequence of that approval unknown at the moment it is made.

When a headcount plan is reviewed

A headcount plan is approved annually and reviewed periodically. The occasions for a review are a change in the organisation’s plan, a clear divergence between actual and estimated departures, or a decision that stops drawing on the plan, such as a hiring freeze.

Each occasion affects the plan in a different way. When the organisation’s plan changes, so does the need that the headcount plan was approved against. A divergence between actual and estimated departures changes how many seats return to the balance: where departures run above the estimate, more seats come back than the plan assumed, and where they run below it, fewer do. A hiring freeze stops requisitions from drawing on the balance for as long as it lasts.

Review is also an opportunity to close posts that are no longer needed. Closing a post at that point can be a low cost way of correcting the structure, because it falls on a seat that no one holds.

This is an explanation of the concept, not legal advice.