A headcount plan lists every role the company intends to hire, at what level, in which month, with the full cost attached. Built well it is the bridge between the financial model and the hiring plan. Built from job titles alone it becomes a wish list that the cash forecast quietly ignores.
What headcount planning is
A headcount plan answers four questions for every role: what problem it solves, what level of person solves it, what month they start, and what the fully loaded cost is. Anything short of all four is a list of job titles. The plan is what connects the revenue and margin assumptions in the model to the actual people who have to deliver them, and it is the largest controllable line in the cash forecast.
It is also the document most likely to be built once and abandoned. A headcount plan is only useful if it is re-tested each time the forecast moves, because the two are the same conversation. When a finance function is working properly, hiring plans get properly tested before they become commitments.[1] That test is the whole value of the exercise.
Building the plan: from targets to roles
Work backwards, in this order. Start with what the plan requires the company to do next year, not with the current team. For each of those requirements, name the specific work that has to happen and who is doing it today. Where the honest answer is that nobody is, or that a founder is doing it badly at midnight, you have found a role. Then decide the level, the month and the cost.
Sequencing matters more than the total. A role hired in month two and a role hired in month ten cost very different amounts in the same financial year, and a plan that lands every hire in the first quarter is usually a plan that has not been tested against cash. Assume a real time to hire as well: from job brief to shortlist my own process typically runs five working days,[2] but notice periods in the Australian market mean a senior finance hire is rarely at a desk inside three months of the decision.
The plan only means something against the cash position, covered in how to manage cash flow in a growing business.
What a hire actually costs
Base salary is the number people plan with and it is not the number that leaves the bank account. The superannuation guarantee the ATO requires sits on top, along with leave entitlements set out in the Fair Work National Employment Standards, plus payroll tax where the state threshold is crossed, recruitment cost, equipment, software seats and the ramp period before the person is fully productive. Plan on the loaded figure.
For finance roles specifically, the Australian bands are reasonably settled. A half-decent finance hire who can add value beyond compliance might cost $150,000 to $160,000, while a hire with strong experience in automation, tech, AI, capital raises and acquisitions will be closer to $200,000 or more.[3] A first finance hire role, whether it is titled financial controller, head of finance or VP of finance, generally pays between $180,000 and $220,000 to $230,000, though that varies where a company leans heavily on long-term incentives to save cash.[4] At the CFO end, an early-stage CFO role around Series B typically sits at a base of $300,000 to $350,000 plus super.[5] The ladder either side of that, from seed through to pre-IPO, is set out in the CFO salary guide for the Australian market.
| What goes in the plan | Why it belongs there | |
|---|---|---|
| Base salary | The advertised number | The anchor for everything else, and the only component candidates negotiate directly. Set it against the market band for the level, not against what the last person in the seat earned. |
| Superannuation and entitlements | Super guarantee, leave, payroll tax | Non-negotiable on-costs. Leave entitlements are set by the National Employment Standards and payroll tax applies once the state threshold is crossed. |
| Incentives | STI and long-term incentives | The lever that lets a cash-constrained company reach a candidate it could not otherwise afford. It costs equity rather than cash, so it belongs in the plan as its own line. |
| Cost to hire and ramp | Search fee, equipment, time to productive | One-off but material, and the ramp period is the part founders leave out. A senior hire contributing from month four should be modelled that way. |
The mistake that forces you to hire twice
The most expensive error in headcount planning is not overspending. It is under-levelling. Founders err on the side of under-hiring for their first finance role, pricing it against the complexity they have today rather than the complexity they will have in twelve months, which often leads to re-hiring because the initial hire could not scale.[6] The saving was real. The second search, the handover, the gap and the lost year were larger.
The reverse error is real too, and it is worth naming. Businesses that restructure by replacing senior leaders with cheaper hires look efficient for a year and then discover the work has stopped being done. Both errors come from the same place: pricing the salary line without pricing the capability line.
A useful anchor for the level question is company size. Businesses making their first finance hire typically have roughly ten to twenty headcount.[7] If you are materially past that and still have no finance owner, the role you are planning is probably a level above the one you are budgeting for.
The level and timing question is worked through properly in when to make your first finance hire.
Who owns the headcount plan
Finance owns the numbers, people or the founder owns the roles, and somebody has to own the reconciliation between them. In a company of twenty that is the founder with a finance hire doing the modelling. In a company of a hundred it is the CFO with a people lead, meeting monthly, with one version of the plan rather than a finance version and an HR version.
The market context is worth holding while you plan. Over the last couple of years significant redundancies, headcount cuts and restructures have left many highly skilled finance professionals seeking new roles without a proportional increase in the volume of jobs available.[8] That means the level of candidate available to a well-defined role right now is often better than a founder expects. The constraint is usually the clarity of the plan, not the supply of people.
Common questions
What is headcount planning?
It is the process of turning a company plan into a costed, sequenced list of roles: what each one solves, what level of person solves it, which month they start, and what the fully loaded cost is. It sits between the financial model and the hiring plan, and it is the largest controllable line in most cash forecasts. Anything that stops at job titles and a total is a wish list rather than a plan.
How do you calculate the true cost of a hire in Australia?
Start with base salary, then add the superannuation guarantee, leave entitlements under the National Employment Standards, and payroll tax where your state threshold is crossed. Then add one-off costs: recruitment, equipment and software. Finally model the ramp, because a senior hire is rarely fully productive in month one. Planning on base salary alone consistently understates the real figure.
What does a first finance hire cost in Australia?
A first finance hire, whether titled financial controller, head of finance or VP of finance, generally pays between $180,000 and $220,000 to $230,000, and that can shift where a company leans on long-term incentives to preserve cash. A hire who can only cover compliance sits lower, around $150,000 to $160,000. A candidate with strong automation, tech, capital raise and acquisition experience is closer to $200,000 or more.
What is the most common headcount planning mistake?
Under-levelling the role. Founders price a first finance hire against the complexity they have today rather than the complexity they will have in twelve months, and then re-hire within a year or two because the person could not scale. The second search, the handover and the months without an owner cost more than the salary ever saved.
References
- How I frame this: reporting gets clearer, forecasts become more believable, board prep gets less chaotic, cash conversations get more accurate, and hiring plans get properly tested before they become commitments.
- From the executive brief for that role: from the job brief meeting to the presentation of the candidate shortlist typically takes five working days. Tom Hunter describes how that search process runs in an interview on the Honest Wealth Builders podcast.
- My read on the Australian market: a half-decent finance hire who can add value beyond compliance might cost $150-160k, but a hire with strong experience in automation, tech, AI, capital raises and acquisitions will be closer to $200k+.
- What I see the market paying: the role, such as an FC, Head of Finance or VP of Finance, generally pays between $180,000 to $220,000-$230,000, though this can vary if the company leans heavily on LTI to save cash.
- Where the Australian market sits on this: for a CFO role around Series B, the typical base salary range is $300,000 to $350,000 plus super.
- What I say when this comes up: many founders err on the side of under-hiring for their first finance role, pricing it against current complexity rather than anticipated complexity in 12 months, which often leads to re-hiring because the initial hire could not scale.
- Where the stage thresholds actually sit: businesses seeking their first finance hire typically have roughly 10 to 20 headcount.
- What changes as a business scales: over the last couple of years significant redundancies, headcount cuts and restructures have led to many highly skilled finance professionals seeking new roles, while the volume of available jobs has not increased proportionally.