Skip to main content

Hiring Planning

Definition​

Hiring Planning is the process of determining when and how many sales hires you need to meet capacity targets, accounting for ramp time, attrition, and revenue goals.

Why It Matters​

  • Forward-looking: Plan hiring 6-12 months ahead to account for ramp
  • Avoid surprises: Anticipate capacity gaps before they become crises
  • Budget alignment: Justify headcount requests with capacity math
  • Timeline clarity: Know exactly when hires need to start work

The Hiring Planning Formula​

Basic Capacity Gap Formula​

Hiring Need (RRE) = Target Capacity - Current Capacity - Pipeline Capacity + Expected Attrition

Where:

  • Target Capacity: Revenue goal / Expected attainment %
  • Current Capacity: Sum of existing team quotas (ramp-adjusted)
  • Pipeline Capacity: Hires already in process (with ramp adjustment)
  • Expected Attrition: Anticipated departures (capacity-weighted)

Worked Example: North America East Q1 2026 Planning​

Context: End of Q4 2025, planning for Q1 2026

Step 1: Set Target Capacity​

Q1 2026 Revenue Goal: $3.0M
Expected Team Attainment: 85%
Target Capacity Needed: $3.0M / 85% = $3.53M

Step 2: Calculate Current Capacity​

End of Q4 2025 Capacity:
  - 10 fully ramped reps × $350K = $3.5M
  - 3 ramping reps × $200K (avg 57%) = $0.6M
  - 1 backfill (Month 2) × $88K (25%) = $0.088M
Total Current: $4.19M

Step 3: Adjust for Pipeline​

Hires Already in Process:
  - 1 offer accepted, starts Jan 15 (Month 1 of Q1)
    Q1 capacity contribution: $350K × 25% (avg Q1 ramp) = $88K

Pipeline Capacity: $0.088M

Step 4: Forecast Attrition​

Historical Q1 Attrition: 3 people (avg capacity: $1.2M)
Q1 2026 Expected Attrition: $1.2M

But: If departures happen mid-quarter, partial capacity remains
Assume 2 months of capacity before departure: $1.2M × (2/3) = $0.8M retained
Net Loss: $1.2M - $0.8M = $0.4M

Step 5: Calculate Hiring Need​

Target Capacity: $3.53M
Current Capacity: $4.19M
Pipeline Capacity: +$0.088M
Expected Net Loss: -$0.4M

Net Capacity at End Q1: $4.19M + $0.088M - $0.4M = $3.88M

Gap to Target: $3.88M - $3.53M = +$0.35M (SURPLUS)

Hiring Need for Q1: 0 additional hires needed
(Already over target, even with expected attrition)

Step 6: Look Ahead to Q2 2026​

Q2 Revenue Goal: $3.5M
Target Capacity: $3.5M / 85% = $4.12M

Starting Q2 Capacity: $3.88M (from Q1 ending)
Gap to Target: $4.12M - $3.88M = $0.24M

If Q2 attrition = $1.2M:
Total Need: $0.24M + $1.2M = $1.44M

Hiring Need: $1.44M / $350K = 4.1 ≈ 5 hires

BUT: Ramp matters!
If hired in Q2, average Q2 capacity contribution = 25% = $88K
5 hires × $88K = $0.44M (not enough to cover $1.44M need)

Need to hire EARLIER (in Q1) to have ramped capacity by Q2

Accounting for Ramp Time​

The Ramp-Adjusted Hiring Formula​

Hires Needed = Capacity Gap / (Quota × Average Ramp % in Period)

Example:

Capacity Gap: $1.5M
Quota per Rep: $350K
Target Period: Q2

If hiring in Q2:
  Average Q2 Ramp: 25% (Month 1-3 average)
  Hires Needed: $1.5M / ($350K × 25%) = 17 hires (unrealistic!)

If hiring in Q1:
  Average Q2 Ramp: 75% (Month 4-6 average)
  Hires Needed: $1.5M / ($350K × 75%) = 5.7 ≈ 6 hires (feasible)

Takeaway: Hire 1-2 quarters BEFORE you need the capacity

Hiring Timeline Backwards Planning​

Step-by-Step Timeline​

Goal: 5 fully ramped reps by Q4 2026

Work backwards:

EventTimelineDate
Need full capacityQ4 2026Oct 1, 2026
Must start6 months priorApr 1, 2026
Offer accepted2 weeks before startMar 15, 2026
Offer extended1 week before acceptanceMar 8, 2026
Final interview2 weeks before offerFeb 22, 2026
Phone screen3 weeks before finalFeb 1, 2026
Job posted4 weeks before screenJan 4, 2026
Req approved2 weeks before postingDec 21, 2025

Total lead time: 9-10 months from approval to full capacity

Common Hiring Planning Scenarios​

Scenario 1: Hypergrowth (50%+ YoY)​

Challenge: Need massive hiring ramp

Example:

Current Capacity: $10M
Target Capacity (next year): $15M
Growth Need: $5M
Attrition (15%): $1.5M
Total Hiring Need: $6.5M / $350K = 18.6 ≈ 19 hires

Hiring by Quarter:
  Q1: 5 hires (to ramp for Q3-Q4)
  Q2: 6 hires (to ramp for Q4 + Q1 next year)
  Q3: 4 hires (to ramp for Q2 next year)
  Q4: 4 hires (to ramp for Q3 next year)

Key: Front-load hiring to account for ramp lag

Scenario 2: Steady State (10-20% YoY)​

Challenge: Maintain capacity despite attrition

Example:

Current Capacity: $10M
Target Capacity (next year): $12M
Growth Need: $2M
Attrition (12%): $1.2M
Total Hiring Need: $3.2M / $350K = 9.1 ≈ 9 hires

Hiring Strategy: 2-3 hires per quarter (evergreen recruiting)

Scenario 3: Restructuring (Flat/Negative Growth)​

Challenge: Optimize team composition

Example:

Current Capacity: $10M
Target Capacity: $10M (flat)
Attrition: $1.2M
Backfill Need: 3-4 hires

But: Selective backfilling
  - Don't backfill bottom performers (20% of attrition)
  - Upgrade roles (hire Enterprise AE instead of Mid-Market)

Best Practices​

1. Build 6-Month Rolling Hiring Plans​

Update monthly:

Month 1: Review actual attrition vs forecast
Month 2: Adjust hiring needs based on actuals
Month 3: Update ramp assumptions based on cohort performance

2. Pre-Approve Backfill Budget​

Traditional process:

Employee quits → Wait for approval (2 weeks) → Start recruiting
Time to hire: 8-10 weeks

Pre-approved process:

Employee quits → Start recruiting same day
Time to hire: 6-8 weeks
Saves: 2-4 weeks per hire

3. Maintain Evergreen Pipeline​

Reactive hiring:

Need 5 hires → Post jobs → Source → Screen → Offer
Total: 8 weeks × 5 hires = 40 weeks of effort

Evergreen hiring:

Always recruiting → Warm pipeline ready → Offer within 3 weeks
Total: 3 weeks × 5 hires = 15 weeks of effort
Saves: 25 weeks (62% faster)

4. Segment Hiring by Role​

Not all roles are equal:

RoleRamp TimeTime to HireLead Time Needed
SDR3 months4-6 weeks5 months
Mid-Market AE4 months6-8 weeks6 months
Enterprise AE6 months8-12 weeks9 months
Manager6 months10-16 weeks10 months

Plan each role separately

5. Account for Seasonal Attrition​

Example attrition patterns:

Q1: 15% of annual attrition (post-holiday departures)
Q2: 25% (spring job market)
Q3: 20% (summer)
Q4: 40% (year-end/vesting)

If annual attrition = 12 people:
  Q1: 2 departures
  Q2: 3 departures
  Q3: 2 departures
  Q4: 5 departures

Plan Q4 backfills to start in Q3 (ramp for Q1 capacity)

6. Use Capacity Waterfalls​

Visualize capacity flows:

Beginning Capacity: $10.0M
  ├─ Attrition: -$1.2M
  ├─ LOA: -$0.3M
  ├─ Existing ramp progression: +$0.5M
  ├─ New hires (Q1 starts): +$0.2M
  └─ Ending Capacity: $9.2M

Gap to Target ($12M): -$2.8M
Hiring Need: 8 more hires (with ramp adjustment)

Common Pitfalls​

1. Ignoring Ramp Time​

Mistake:

Need $1.5M more capacity in Q2
Hire 4 people in Q2 ($1.4M annual capacity)
Assume: "We're covered!"

Reality:

4 hires in Q2 @ 25% average ramp = $350K Q2 capacity
Still short $1.15M

Fix: Hire 1-2 quarters ahead

2. Linear Hiring for Exponential Growth​

Mistake:

Need to grow 50% this year
Hire 50% more people evenly across the year

Reality:

Q1 hires won't ramp until Q3-Q4
Q4 hires won't contribute until next year
Capacity lags growth plan by 6+ months

Fix: Front-load hiring in H1 for H2 capacity

3. Not Planning for Attrition​

Mistake:

Current: $10M
Target: $12M
Hire: $2M capacity (6 people)

Reality:

Attrition: $1.2M
Net gain: $2M - $1.2M = $0.8M
Ending capacity: $10.8M (missed target)

Fix: Hire for growth + attrition replacement

4. Assuming 100% Offer Acceptance​

Mistake:

Need 5 hires, make 5 offers

Reality:

Offer acceptance rate: 70%
Actual hires: 3.5 (need 2 more offers)
Delays: 4-6 weeks

Fix: Plan for 70-80% acceptance, have backup candidates

References​

  • Standard practice in sales capacity planning
  • Requires collaboration: Sales Ops, Recruiting, Finance, Sales Leadership
  • Revisit monthly with updated actuals
Edit this page