Headcount: definition, concept and structure

2024 Author: Howard Calhoun | [email protected]. Last modified: 2024-01-17 18:37

For the management of any company, the question of how much staff should be in order for it to function effectively is always an important question. Many enterprises are forced to lay off workers due to costs, which does not always have a positive effect on the development of production. There is a concept of the optimal number of people in which the company can function effectively.

The higher the composition and number of employees of the company, the more difficult it is to manage. Therefore, determining the optimal number of employees is a significant moment.

Headcount is one of the most important categories for personnel research in a company. It should not be neither higher nor lower than the optimal indicator. Let's see how to identify it.

Concepts to consider

The number of personnel of the company is the most important personnel indicator of the company, which characterizes its condition. This concept can be concretized by the concept of a list,attendance and average number of staff units.

The headcount category is understood as statistical and economic indicators that reflect the number of people who perform labor functions in the company and are part of various categories of employees.

Composition of staff

Under the structure understand the union of its employees into groups and functioning units according to various criteria. The following groups are distinguished by composition, reflected in the table below.

Groups	Characteristic	Classification stage	Characteristic
Non-industrial	Those workers who are not directly involved in the production process. Workers of the social segment	_	_
Industrial production	Those employees who are involved in the production process	Company leaders	-grassroots level (master); -medium (managers of structural divisions); -highest (CEO, deputies)
_	_	Servants	Secretary, cashier, timekeeper, freight forwarder. All employees for paperwork, financial and settlement work
_	_	Specialists	Engineers, economists, lawyers, technologists, personnel officers,accountant, etc. Accomplishment of administrative, economic, engineering and legal tasks
_	_	Workers	Those who directly create the company's products, produce the final product, provide services.

The following factors may influence the structure and number of staff:

• Automation and computerization of production.
• Using modern technology.
• Using the latest materials.
• Organization of production.

Structure of population

It can include several categories of employees:

• Payroll.
• Employees performing labor functions under civil law contracts.
• Part-timers.

The payroll number of employees is all employees who work at the enterprise: full-time, seasonal, temporary, etc. The fundamental point is the fact that all of them have an entry in the work book. Each such employee is counted as part of only one company. Also considered are those people who did not go to work for any reason. When calculating employment, this list is used. If a person is included in the payroll, therefore, he is not unemployed.

For those who work under civil law contracts, work contracts or labor agreements are concluded. Such employees during the reporting period maybe involved in several companies and be considered full-fledged employees.

Their number cannot be determined without taking into account external and internal part-time workers. External part-time employees are employees who are usually on the list of one company, and part-time (according to the laws in the field of labor relations) are employed on projects in another organization. Internal part-time employees are company employees who additionally perform paid tasks in their own organization.

When calculating the average number of people, the work of external part-time workers is taken into account according to the time they spent. The subgroup in which the new person is included is stated in the employment order and in the contract concluded with the company. Part-time employees and contract workers are not included in the list for determining the proportion of staff employed in order to prevent double counting.

Types of numbers

Among the main types of headcount are the following:

• Planned.
• Normative.
• Regular.
• Average list.
• Hobby.
• Actual.

The table shows the main types of headcount and their characteristics.

Numbers	Characteristic
Planned	Can be determined by labor productivity factors and the specifics of the organization in the market. The indicator is close to reality
Normative	Formed based on industry labor standards and scope of work
Regular	Formated from the number of employees who are on staff, excluding seasonal and temporary employees
Average list	Determine the average number of employees for the period
Safety	Only those employees who are currently at the workplace
Actual	Number of actually working employees in the company

Techniques

Analysis of the number of personnel of the organization is carried out in several stages, reflected in the table below.

Stage	Characteristic
Comparison of the number and composition of the state with organizations - analogues in the industry	Study the percentage of qualitative and quantitative categories of composition. Determine the normative attitude to the total number of personnel
Comparing the growth rate of profits and costs for the entire staff of the company	Wage bill growth must be below productivity growth
Recalculation of the hierarchy in the company	The ability to identify unnecessary links in management
Audit and revision of personnel	Analytics of staffing byage, length of service, gender, level of education, etc.

Average number of employees

The average headcount can be determined by the formula below:

Average=(Average1+Average2+…. Average12)/12. The denominator is the number of months in a year.

where Avg1, Avg2 … - the average headcount by month of the year (persons).

To calculate Avg1, Avg2, etc. apply the payroll values by months of the year, taking into account holidays and weekends.

An example of the calculation is shown below.

Initial data:

• The number at the end of December is 10 people.
• 15 more people accepted since January 11.
• 5 people laid off on January 30th.

The initial data looks like this:

• From 1 to 10 January - 10 people.
• From 11 to 29 January - 25.
• From 30 to 31 January -20.

Calculation of population indicators:

((10 days10 people) + (19 days25 people) + (2 days20 people))/31=(100 + 475 + 40)/31=19, 8 or rounded up 20 people.

Planning

Staff planning is the process of developing plans to provide the company with the required number of personnel.

The process solves the following tasks:

• Lack of labor in the company.
• Lack of skills for business development.

Planning steps are shown in the table below.

Stage	Characteristic
Analysis of the current state of affairs	Identifying the compliance of company employees with existing requirements
Employment needs assessment	When exploring the following areas: -type of company work; -market features; -production volume; -managerial tasks; -financial resources. The process can be carried out according to how technically equipped the firm is
Formation of a new squad	Directly the process of attracting employees through hiring
Performance evaluation	Calculation of performance indicators for attracting new employees

Regulations

There are different staffing standards. Among them are production rates, service rates, etc. To find how many people are required to implement a certain labor function, calculations are used based on the number of personnel labor.

Reliance on regulations allows planning the number and composition of the company's employees, which practically leads to a level of productivity that corresponds to the technical characteristics of the company.

Let's give some calculation options.

Method 1. In accordance with production standards. They are defined as the amount of work (for example, the number of finished products) that the team (or employee withsufficient qualifications) is obliged to perform in accordance with the existing organizational criteria per unit of working time.

Method 2. In accordance with the population standard. The basis for this calculation is a fixed number of employees with a certain qualification required to solve managerial or industrial tasks. The main drawback of using this standard is the not very high accuracy of the characteristics. This is due to the fact that only normal volumes are taken into account when determining the standards for the number of employees. The more complex the actual workflow, the more it deviates from the typical. Therefore, the accuracy of the calculation decreases.

Method 3. In accordance with the norms of time. Here you need to take into account the amount of time spent on the implementation of a unit of an industrial process by an employee or a team.

Method 4. In accordance with service standards. In these calculations, the basis is the number of pieces of industrial equipment (for example, machine tools, animal heads) that a group of employees must process within a certain time. This rule is practically the same as for employees who perform service functions. Often, when calculating the number of employees in an organization (both regular and standard), headcount indicators are fractional and require rounding. The obtained values are used as arguments for making various managerial decisions in the field of personnel policy.

Optimal number of employees

For the optimal calculation of the number of personnel in the production area, other methods are used.

Method 1. Timing. For measurements, they use a stopwatch and note how much time each subsequent step of the workflow takes. Then all acquired values are summed up. The timing method is mainly used by production managers, financiers and raters. The main disadvantage of the method is its labor input and duration, especially with a significant number of company employees.

For example, the average production time of a part can be calculated only after 30 measurements, during which the actions are carried out by various workers. With all this, the measurement accuracy will not be high enough. The speed of work is reduced for employees who know that they are currently being watched. Another disadvantage of timing is the lack of flexibility. If you need to calculate the production rate of identical parts that have minor differences, this can only be done by measuring for each of them.

Method 2. Comparison with rival companies. Optimization of the number of employees in the organization is also done by comparing the number of employees you have and those of your competitors using the same industrial technologies. This is an extremely fast method, but it will only bear fruit if real information about the work of competing companies is provided. Comparison also helps to understand what place occupiescompany in the market, based on the beliefs of the number of employees and business productivity.

Method 3. Microelement planning. This method is based on the assumption that any work operation can be reduced to a certain number of simple actions, and the time spent on them is already known. Then, to calculate the standard, only the sum of the results of measurements will be needed. Based on this information, it will be possible to optimize the number of employees in the company. Rationing with the help of microelements of operations is suitable only for those types of work that are performed manually and consist of cyclic actions. To apply this method, you need a financier who has undergone special training.

Number of support workers

To calculate the number of personnel in the field of auxiliary operations, the factorial planning method is used. It is quite labor intensive. In this case, key criteria are used for each process and production operation. The degree of influence of factors on the number of personnel is determined as follows: the workflow is divided into elements, each of which depends on one factor. The results of such normalization are compared with similar values in comparable departments of the organization.

Conclusion

The number of personnel of the enterprise is determined by the nature of the company's activities, as well as the complexity of the technological processes of production. Automation, mechanization andother factors. Based on this value, the planned and standard headcount is formed.

For any company, personnel management plays the most important role. Without excellent professionals, no organization will be able to successfully continue its activities. In our time, there are many new principles of organization of production. However, the realization of all these opportunities directly depends on the employees of the company, that is, on living people. Their literacy, knowledge, and qualifications are of primary importance. To achieve the company's goals, it is necessary to form the optimal value of the number of working personnel.