In this strange world, where it can feel like we’re treading water trying to stay afloat day by day, it can be hard to imagine planning for the future. Lockdowns begin, lockdowns end, and after seeing our world come to a screeching halt once already, who knows what the future holds?

But to keep our heads above water, we need to make an effort. We need to keep looking ahead and do our best to plan for an uncertain future.

Employee growth rate is an HR metric measuring your company’s rate of headcount growth. Many of us saw hiring slow down during the pandemic, along with unprecedented layoffs and furloughs, but the market is returning to pre-pandemic levels and, hopefully, we can begin planning for a more fruitful 2021.

Let’s discuss:

  • Why growth rate is important
  • How to measure growth rate

What employee growth rate means for your business

Sales are booming, web traffic is peaking. If you want to keep growing your business, you’ll need to expand your teams to match.

Calculating growth rates will help you plan the rest of your goals, KPIs, and projections for the quarter and year ahead, from recruitment needs to cost per acquisition. The larger your organization gets, the more complicated its needs will be.

In an article titled Why everything breaks when you reach 25 employees published by leadership and management blog Lighthouse, the importance of understanding growth rate is explained as critical to developing healthy communication practices. “Gone are the days when you can have a team-wide standup and someone can monitor your wiki and a project management tool to understand what everyone is doing,” they write. “The reason everything breaks is not anyone’s fault…however, in order for you to grow and succeed at your new company size, you have to evolve and change how you do things.”

Growth rate is important for building and maintaining an effective tech stack. The tech tools needed to manage 50 people is different (read: smaller) than 100, 1,000, and beyond. Getting ahead of this growth with a strong, effective stack will help keep your people engaged and productive—especially while working remotely.

How to calculate employee growth rate

Employee growth rate is calculated by—well, it’s complicated. Let us show you.

HR metrics that matter: employee growth rate - Employee-growth-rate-formula.png

You can calculate your employee growth by team, department, or period by adjusting the numbers accordingly.

Employee growth rate is a metric that matters

Measuring your employee growth rate will help you understand growth patterns in your organization and where you’re headed. Especially as we begin to recover from COVID’s impact on the economy, we can use employee growth rate as a signal for understanding overall organizational health and progress.

Shayna Hodkin

From Shayna Hodkin

Shayna lives in south Tel Aviv with two dogs and a lot of plants. She writes poems and reads tarot.