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Scale Competitively While Minimizing Burn and Dilution with Headcount Plan in OpenComp

, , | Dec 8, 2022 10:01:12 AM | By

Amidst a raging talent market, record inflation, and economic uncertainty, businesses must get creative when it comes to balancing retention and performance with conserving cash. And with compensation being the #1 spend for any high growth organization, your headcount plan is effectively your financial plan. 

Until now, designing and managing your headcount plan required utilizing siloed systems and spreadsheets. But these methods are not only time-consuming and error-prone, they make it nearly impossible for you to stick to your budget when they’re based on stale benchmark data and fail to account for updates to your compensation program – like promotions, changes in geographic strategies, and more.

With OpenComp Headcount Plan, you can model the impact of future headcount and compensation decisions and prepare a plan for any future scaling scenario. You’ll simplify the planning process by surfacing your compensation policies at the point of every decision and immediately see the effects that even the smallest compensation changes have on your financial plan.

Read on to learn how OpenComp’s Headcount Plan can help you save time and resources as you plan to scale your business. You’ll adhere to your financial plan, surface key insights, and identify your organization’s optimal path forward.
 

Create a data-backed financial plan with ease in Headcount Plan. 

Your headcount plan is effectively your financial plan, and for any financial plan to be accurate, it must be built on reliable data. Without relevant and accurate data, you risk overspending, wasting resources, and creating internal pay inequities.

When you create a scaling plan in Headcount Plan, your organization’s unique compensation philosophy is surfaced at the point of every decision, whether your organization is benchmarking roles to market data, or utilizing professional-grade pay ranges built in OpenComp Range Builder. By surfacing OpenComp’s proprietary dataset Market Pulse, or your organization’s unique pay ranges, you can be sure that decisions are being made on the most accurate data available for your organization.

Headcount Plan then simplifies the budgeting and planning process by automatically accounting for current employee start and end dates, future hires, setup costs, overhead costs, recruiting fees, raises and more, so that you can produce accurate and actionable plans as your company scales. You’ll be able to see insights like monthly, annual, and cumulative burn up to 10 years in the future, shares granted and available, and aggregate spend and shares granted by department. 

With Headcount Plan, you’ll stick to your budget with one, end-to-end solution that ensures your pay practices are competitive, fair, and fiscally responsible for years to come. 

 

Model different scenarios to optimize your organization under different economic conditions with Scenario Modeling.

As market conditions shift, it’s wise to model different scaling plans for your business that assume differing market conditions. 

OpenComp’s Scenario Modeling coupled with Headcount Plan can help you to see possible consequences under a number of different economic projections – including what it could look like to scale up or down. 

Scenario Modeling makes it easy for you to test and optimize your company’s plans by showcasing the effects that different scaling plans would have on your business. You’ll quickly be able to answer questions like, “what’s the cost benefit of providing raises to my engineering team versus adding headcount to the department?” 

When you create additional scenarios in OpenComp, you’ll create a duplicate of your business and your compensation philosophy, so that you can easily make changes and analyze the effects that using different scaling strategies will have on your burn and dilution. 

Together, Scenario Modeling and Headcount Plan bring financial analysis and market data together so that you can get everything from the most conservative to the most aggressive scaling plan for your business in seconds.

 

Optimize your organization’s location-based pay strategy within Headcount Plan.

As you tweak and optimize your company’s scaling plans in Headcount Plan, you’ll want to account for how location-based pay strategies can impact your financials. After all, given today’s distributed workforce, implementing geo-based strategy can be a creative way to stay competitive in local markets while optimizing for burn and dilution.

Historically, managing a location-based pay program required utilizing manual calculations and multiple spreadsheets to determine employees’ compensation based on their location. But now, OpenComp Headcount Plan and Location Strategies make it easy to test the costs associated with implementing different geo-based pay programs by simply choosing an in-app template that enables you to adopt the remote pay policies that power today’s fastest growing organizations in seconds. 

You also have the ability to build and test a completely custom strategy specific to your company’s unique goals. Custom Strategy in Location Strategies enables you to change tier names, add new tiers to your strategy, and freely move locations between tiers. You can also specify overrides based on job function or executive level. 

With Location Strategies and Headcount Plan, you’ll be able to quickly realize the costs associated with altering your geo-based compensation program without the manual labor and guesswork that normally accompany this kind of financial planning. Not only will you operate smarter financially, you’ll create a well-defined pay program that attracts and retains top performers longer.

 

Become a compensation champion overnight with OpenComp Design Studio.

OpenComp Headcount Plan, Scenario Modeling, and Location Strategies are features of the OpenComp Design Studio Solution. 

Design Studio makes it easy to create professional-grade compensation programs that are optimized for effectiveness. You’ll execute with expertise, surface key insights, and simplify your entire comp admin in just a few clicks. Begin using OpenComp Design Studio, and become your organization’s compensation champion. 

See OpenComp Design Studio in action with a live demo.

 


Lexie Sirak is a Senior Campaigns Coordinator at OpenComp and previously worked at JPMorgan Chase & Co. Connect with her on LinkedIn here.