Been reading up on this - https://infraeng.dev/hiring-ratio/ (strongly recommend the whole thing to be honest) and was wondering whether anyone in this thread use hiring ratios in practice for headcount planning?
04/06/2022, 1:36 PM
Yes but personally i think its more useful to think about ratios of KTLOFoundationalProduct investments if you’re doing roadmapping/prioritization and then do the HC allocations based on that taking in the R&D vs COGS constraints later. HC planning is just a way for people to avoid having to do actual prioritization discussions ;)
You’re looking to ultimately maximize Product as a percentage of the org so having common nomenclature for each team that you can look at then sum up or ask to be invested/reduced is nice
04/07/2022, 12:01 PM
That all makes sense, and definitively feels like the right way to go about it. The issue I’ve seen in the past is having to operate in environments where that level of maturity is not present in terms of planning and prioritization - to the point of people actively ducking these conversations as you said! That means that even having that local level of understanding of future and current resourcing needs doesn’t sit well alongside the approach used by the wider business. For my situation at least, right now a simple heuristic like the hiring ratio - or something I tried to do at a previous role which was basically have the cloud/platform team be funded out of a share of the cloud spend - is easily digestible and understandable by peers and others who influence the budget-setting process. As the business evolves or if I end up somewhere with more rigorous practices, I would definitely look to adopt your more useful approach.
04/07/2022, 1:00 PM
Cloud spend is COGS though and product is R&D from an accounting POV usually. The question is then a margin question and the ratio shouldn't matter from a HC perspective. unless it's a full P&L model and then I assume you're reporting to the person in charge of P&L?
In that case then the question is “what are we looking for from a margin over the next N years and what is the overall plan?” once you have that then it's “my contribution from cloud is X to margin let me hire the way i want to”
let me know if this is helpful - i think i am missing something - i am not sure what the toplvel decision making/constraint framework is