One of the key metrics CEOs and revenue leaders look at is revenue per head. How much money does this division cost me, and what kind of headcount do I need to hit my goals and run a high-margin business? This contributes to how the company will scale and the look-ahead hiring plan.
For start-ups, this metric is critical. Cash burn is one of the hardest things to manage, and looking at cost per head, married to contribution, is essential. For large corporations, managing revenue per head matters as well. Companies easily become bloated in robust economies, and managing to this metric allows for measured growth vs. irresponsible spend. The way to manage this metric is by incorporating an impact metric into your headcount and hiring practice. This means, when making the decision to open headcount, asking yourself and your team, how much impact will this new hire make on the business, and can it be measured? Should you decide to move forward with opening new headcount, the next step is to incorporate impact into your interview process and your annual review and compensation plan.
How to interview for impact:
- Ask for specific examples and metrics. During the interview, ask candidates to provide real work examples of how they personally impacted revenue, efficiency, or other key business metrics. Even if you are interviewing for roles that are not directly aligned to revenue, ask how they contributed to the company's success and drove growth, top-line or bottom-line. For sales and revenue-driving roles, get actual numbers, don’t let the candidates off the hook with just percentages.
- Look for a strategic mindset, not just a task-doer. Often, we are asked to hire leaders who are also "doers." This is important, especially with start-ups, but don't just focus on the immediate task vs. also considering the long-term business needs. Marketplaces are constantly shifting, and great leaders can be in the weeds with their team while looking ahead and building a strategy for the future. During leadership interviews, spend time discussing change management, strategies for revenue growth and profitability, and the trade-offs your executive had to make in past decisions that may have hurt short-term but had a positive impact in the long-term.
- Evaluate how your candidate can adapt and scale. Start-ups and fast-scaling businesses need leaders who can adjust as the business evolves. Ask candidates how they planned for the future, what metrics they put in place that triggered new hires or technical investments, and how they had to adapt their thinking as the business changed.
- Learn how your candidate handles high-pressure situations and conflict. Impact hires know how to handle pressure and can galvanize the team and diffuse a situation. Regardless of company size or stage, work is stressful, and, at times, teams can become misaligned. Ask your candidate to give an example of when they were in conflict with another leader or management, how they navigated it, the actions they took, and the outcomes that resulted. You can also employ third-party assessments in this area if you feel it is difficult to read between the lines.
Recruitment isn’t just about filling headcount, it’s about choosing to add an expense with the confidence that this hire will make a high-impact contribution. Every new hire should drive your business forward—whether that’s by taking entry-level tasks off others’ plates so managers can focus on their expertise, or by spearheading initiatives that transform the company. In the end, each hire should be an investment that pushes your business closer to its goals.
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