While many organizations these days talk the 'lean' talk, few walk the lean walk. When considering an increase in headcount, your first question should always be:

Is this task even necessary?

You would be amazed at the number of (mostly legacy) companies that assume that, if a task already exists, then it must serve some vital function. Folks, it just ain't so. Do your due diligence and dig down a bit. If after that you decide that the task that you're considering adding bodies to is necessary, the goal is to add as few bodies as possible can, both so that you're a good corporate steward and also to decrease the likelihood that you'll have to look them in the eye and lay them off 12 months from now.

How do you determine 'right number' of bodies to add, or if you really need to add bodies at all? It's a simple matter of efficiency vs. cost increase. Here's the yardstick that you should use, in order of least expensive to most expensive solution:

  1. Improve the process. 
  2. Improve the tools. 
  3. Increase headcount. 

If you don't do #1, you have to do #2 (which costs more). If you don't do number #1 and #2, you have to do #3 (which costs more). And if you don't do any of them now, right now, it will cost 3 times as much later.

A good place to go for answers about how processes can be improved is the people who already do the job - especially employees who are relatively new, and don't already have tunnel vision. They'd love to tell you all about the things that they know will make their jobs easier.

When discussing headcount (or anything else), beware of anyone who uses the words, "Do what's best for the company."

More often than not, the translation of this phrase is, "Screw the company! Do what will get me my bonus!" It's the corporate-speak version of, "Can I be honest with you?", which is invariably invoked just before someone tells a whopper. It's also a frequent code-phrase for, "How can we cover our asses?"

If you're running your business right, doing "what's best for the company" is exactly that - doing what benefits your Customers and the majority of your employees, both now and long-term. Doing anything else isn't just short-sighted and selfish, it's suicidal - plus you'll take everyone else with you. Retaining knowledge and talent is what's best for the company. Never forget that.

Here's one more headcount tip:

If you plan to hire more than 2 people, hire 1 person less than what you think you'll actually need.

Especially with a new position, or additions to an existing employee level, you'll be amazed how clever people are at making things work better if there aren't quite enough hands to stir the pot.

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