What Does Headcount Mean in HR?

What does headcount mean in HR?

At its most basic level, “headcount” in human resources parlance simply refers to the number of people employed by a company at a given time. Of course, as complex as companies’ workforce organization can be, there are many nuances and factors to consider when tallying up the actual headcount.

In reality, employees can—and should be—categorized in a number of different ways for reporting, organizational and planning purposes. A headcount, therefore, is not only about tallying the total number of employees, but also categorizing them according to a variety of characteristics.

Job status

When one digs into the specific real-life scenarios that impact companies and their employees, it becomes easier to comprehend why it isn’t always possible to classify an employee as either employed or not in a binary sense. What if an employee is a seasonal worker? What if they are on maternity or paternity leave? What if they are on disability leave?  

Full- versus part-time

Should an employee working full-time an average of 40 hours per week be counted the same as an employee who works 30 hours per week? Generally, the latter employee would be considered a .75 FTE (full-time equivalent) for headcount and other purposes.

Seniority/pay bands

Aside from more precisely defining who to count in an HR headcount, it’s also important for a variety of reasons to think about how to count staff. Seniority levels and pay bands are prime examples. In addition to a company knowing that it has 500 employees, it likely would also want to know that it has 75 managers, 25 directors, five vice presidents and one president, for example. It may also want to know that it has 350 employees making between $30,000 and $75,000 per year, 100 making between $75,001 and $125,000 per year, and 50 making $125,001 or more per year.

Conducting an HR headcount might seem as straightforward as gathering everyone into a room and literally counting heads, or simply counting how many paychecks went out on the last payday. But HR headcounts are more nuanced and complicated than that. HR headcounts take into account demographic and other data. They often also require some level of categorization of employees based on seniority and pay level in order to facilitate organizational planning.