As companies in DACH and the broader EU prepare for headcount planning in 2025, once again they need to navigate a complex market environment. Although economic stability is gradually returning, it doesn’t mirror the high-growth years of the past.
Effective headcount planning can be demanding for businesses with fewer than 250 employees, often relying on a small HR team (one generalist or three people at most).
Unlike larger corporates, smaller firms don’t benefit from a well-known employer brand. Typically they also don’t have the structure needed for robust leveling or clear career progression paths. This makes it particularly challenging to attract and retain top talent, especially in a job market where employees seek stability.
Key Planning Pillars for 2025
Here’s how to handle headcount strategy with limited HR capacities. The following pillars help create a structured, efficient approach to organizational design that is aligned with business goals and the realities of 2025:
01 Define Your Objectives
Outline a clear objective for organizational growth and structure, considering your company’s short- and long-term revenue goals. Understand how each team (cost center) supports the core business objectives. Marketing, sales, and customer support – understand which roles add value directly linked to revenue growth.
02 Focus on Key Skills
Identify the key skills and knowledge areas needed to support organizational goals. Consider upskilling current employees for roles where appropriate, which can be more cost-effective than new hires and improve retention.
💡 Don’t forget AI adoption and training. 2025 will be about putting AI into practice and leveraging key use cases. Content creation, sales automation or customer support will benefit from greater efficiency.
03 Assess Bandwidth and Resource Needs
Work with your functional leaders. Look at their team’s current workload and capacity. Are they overworked? If yes, what can be done before growing headcount? Evaluate whether additional heads are necessary, where you have to restructure, or where you can leverage technology to increase effectiveness.
💡You can check the Workday’s – Adaptive Planning module. Great software to help you automate most of this work.
For example, in Saas (Software as a service), benchmarks exist to help companies in headcount planning:
For a company with $2M in ARR (within the $1-5M revenue range):
- Target ARR per employee: $100K – $150K.
- Example: A 20 FTE company achieving $2M in ARR has anARR per employee of $100K. This metric can indicate efficient growth if the company is still in the product-market fit stage and investing in growth roles.
For a company with $7M in ARR (within the $5-10M revenue range):
- Target ARR per employee: $150K – $200K.
- Example: A 40 FTE company with $7M in ARR achieves an ARR per employee of $175K. This indicates the company is efficiently scaling, with optimized sales and go-to-market strategies.
For a company with $12M in ARR (within the $10M+ revenue range):
- Target ARR per employee: $200K – $300K.
- Example: With a headcount of 50 employees and $12M in ARR, the ARR per employee is $240K, which reflects mature growth operations and efficient resource allocation, often characteristic of more established, profitable companies.
💡 Check this source by IconiQ Growth to play with the model and evaluate where you stand.
04 Execute Organizational Design
Develop an organizational structure and role chart for each department, outlining responsibilities and team goals.
Perhaps, leveling exercise is still too early for the size of <250 employees. But it’s still a great framework to understand what levels of skills you have available within the organization and potentially train your senior individual contributors for leadership roles. More on the career frameworks and leveling here:
05 Know your numbers (past and future)
Once headcount adjustments are made, measure the impact on productivity and revenue. The regular review ensures your organizational design remains in line with business performance and allows agile adjustment if needed.
You also want to consider the following frameworks to help you make sense of your human resources:
Employee Roster: Get an overview of your existing workforce by collecting data on current employees, including base salary, bonus targets, start dates, and team designations.
Hiring Plans: Include assumptions for upcoming hires, detailing start dates and expected compensation as planned for by your hiring departments.
Benefits Costs: Estimate benefits (e.g., pension contributions, insurance) as a percentage of salaries, adjusting for any specific regional or company policies, and add your specific general benefits as well as exceptions for certain employees to find your total benefits cost.
Projections: Include assumptions about employee turnover based on past rates. However, due to the current trend of low attrition (“The Big Stay“), turnover might be lower than in previous years. Adjust each employee’s start and end dates as needed to reflect any unfilled or vacated roles, which will automatically reduce costs for those positions.
In a year when efficiency and stability are essential, workforce planning for smaller businesses will benefit from a clear, data-driven approach that incorporates AI automation and flexible staffing.
As employees stay in their roles longer, businesses can invest in upskilling and productivity, reducing the need for new hires. AI automation helps streamline repetitive tasks, freeing up small HR teams to focus on strategic decisions. Meanwhile, flexible options such as fractional teams, embedded specialists or consultants allow companies to bring in expertise without a full-time commitment, and adjust resources as needs change.
If you need help with embedded hiring or finding the right talent to strategically grow your team, talk to us at acework by HEICO. We specialize in helping organizations like yours hire technical and commercial talent globally and in your region of choice.
Let’s make 2025 a year of smart growth together!
☎️ Schedule some time with our Founder Angelina Ebeling to discuss your needs
