Hiring Model
Corporate Finance Financial Model (Free Excel Download)
Plan team growth with hiring, attrition, headcount, compensation, and sales-capacity forecasts that connect recruiting pace to payroll and runway protection.
professionals from Deloitte
Used by professionals from
About this model
A hiring model forecasts headcount, fully-loaded compensation expense, and sales productivity across a 12-month horizon for an early-stage operating company. The workbook tracks five departments - Engineering, Sales, Marketing, G&A, and Customer Success - with a parallel row layout that lets totals roll up cleanly and per-department metrics tie back to a single source.
The Hires sheet drives every downstream calculation: new hires per month come from a per-department plan, attrition is computed off the prior month's ending headcount times a department-specific attrition rate, and ending headcount is built as a rolling balance. The Compensation sheet multiplies ending headcount by an annual base salary and a benefits-load multiplier (typically 1.25–1.35× for US tech orgs) and divides by 12 to land a monthly fully-loaded expense; a cumulative line shows the full Y1 burn from hiring. The Productivity sheet applies a static productivity factor to sales ending HC - a deliberate simplification that captures the blended state of ramped plus ramping reps without forcing the user to model a cohort ramp curve - then converts that productive HC into monthly revenue capacity using an annual quota assumption.
Founders, CFOs, FP&A teams, and Heads of People use this template for annual hiring-plan reviews, sales capacity planning, and burn-from-hiring sanity checks. The Summary sheet rolls each department into starting HC, ending HC, Y1 hires, Y1 attrition, Y1 comp, and average annual fully-loaded comp per head, with a separate sales-productivity rollup that ties Y1 sales comp back to Y1 revenue capacity for a quick efficiency check.
What every model includes
Live formulas, no hardcoded values
Outputs are driven by live formulas, so the workbook updates from its assumptions instead of relying on hardcoded results.
All assumptions in one tab
Inputs are clearly marked in the Assumptions tab and separated from calculations, making it clear what to change and what to leave intact.
Statements always balancing
For integrated-statement models, the balance sheet, cash flow, and supporting schedules tie through properly.
Distinct schedules for clarity
Debt, working capital, taxes, and cash flow can get messy quickly. We group calculations in clear schedules, not across disconnected tabs.
No hidden macros or external links
There are no unexplained external workbook links or macros to undermine auditability or portability.
Changes flow through the model
Update a key driver and see the impact carry through the forecast, financing, and return outputs. We never use hardcoded numbers in formulas.
What's inside the Hiring Model
- 12-month hires sheet with new hires, attrition, and ending headcount per department
- Fully-loaded compensation expense by department with cumulative running total
- Sales productivity sheet: ramped headcount and monthly revenue capacity
- Editable assumptions: starting HC, hires per month, salary, benefits load, attrition %, quota, productivity factor
- Per-department Y1 rollup: hires, attrition, ending HC, total comp, average annual fully-loaded comp per head
- Sales comp / revenue capacity ratio as an efficiency check
Hiring Model: Headcount, Compensation, Burn, and Sales Capacity Forecast
This hiring model is a 24-month forecast of headcount, compensation, recruiting cost, cash burn, and runway for a growing company. It tracks hires, attrition, and ending headcount across five departments, translates sales headcount into monthly revenue capacity, and offers Base, Bull, and Bear scenarios to test the plan's financial impact before making offers.
Operating Drivers and Scenario Structure
The hiring model is driven by a scenario selector and a set of assumptions covering starting headcount, hiring-pace multiplier, base salaries, annual merit, benefits-load components, sales commission and quota attainment, monthly attrition, recruiting-cost components, starting cash, non-compensation operating expenses, and sales quota and ramp months.
- The Base, Bull, and Bear scenarios each carry their own values for these drivers, and the model resolves which set to use based on the selected scenario. This allows a founder, CFO, or talent leader to compare hiring plans under different market conditions without rebuilding the model.
- The assumptions feed every calculation sheet, so changing the scenario updates the entire forecast consistently.
Calculation Flow: From Planned Hires to Ending Headcount
The hiring model starts with an editable grid of planned hires by department for each of 24 months. These planned hires are multiplied by the hiring-pace multiplier and rounded to whole numbers to produce realised hires.
- A running raw headcount balance carries fractional attrition, and from this the model calculates expected departures and then rounds to integer ending headcount. Attrition for each month is derived so that the integer rollforward equation holds exactly: ending headcount equals prior ending headcount plus realised hires minus attrition.
- This approach ensures that the headcount figures a CFO reads are whole numbers while correctly accounting for attrition on the prior month's ending headcount. The model also sums departmental ending headcount to a company total.
Compensation, Recruiting, Burn, and Runway Calculations
Compensation expense is built from ending headcount per department. Base salary expense uses departmental ending headcount times base salary, escalated by annual merit, divided by twelve.
- For sales, a variable commission component is added based on sales ending headcount, sales commission rate, quota attainment, and merit escalation. Benefits are loaded as a percentage of total base plus variable compensation, with the benefits-load multiplier composed of payroll tax, healthcare, retirement, and other components.
- Total compensation per month is base plus variable plus benefits. Recruiting cost is gross hires times cost per hire, where cost per hire is the sum of agency, signing, and onboarding components.
Monthly burn combines total compensation, other operating expenses, and recruiting cost. Ending cash is starting cash minus cumulative burn, and runway is ending cash divided by monthly burn.
Sales Productivity and Practical Use
The hiring model includes a sales-productivity view that converts sales headcount into revenue capacity. It starts with sales ending headcount and applies a linear-decay ramp over the ramp months to determine productive sales headcount.
- Monthly revenue capacity is then productive sales headcount times sales quota divided by twelve. This shows how quickly new sales hires can contribute to revenue.
- The model also provides a summary per department with two-year rollups of starting and ending headcount, net change, gross hires, attrition, base salary, and average loaded compensation per head, plus a company rollup. A checks sheet validates 13 relationships, such as headcount rollforward, compensation aggregation, and cash never going negative.
The hiring model is intended for founders, CFOs, and talent leaders to sanity-check a hiring plan against burn, runway, and revenue capacity before committing to offers.
Formatted to IB standards
Named theme colors repaint the whole workbook in one click, on top of an investment-banking structure with clear input, output, and cross-sheet reference styling - brand-ready, institutional-grade, and fully auditable.
Created by ex-finance professionals
Hey, I’m Alex and I created Finamodel.
Over my years in the finance industry I kept building the same models over and over again. Same structure, same assumptions, different logo. So I started building frameworks to turn them into clean, reusable templates.
Every model here is one I’d actually use for a client, and I personally vet each one before it goes up.
I’m not an expert in every industry, but I’ve built enough models to know what belongs in one. And when something is completely foreign to me, I reach out to my network for experts to work on our models with us.
Having a template library on hand cuts a first build from hours to minutes.
Need help finding your model? You’ll find me in the Finamodel app!
Frequently asked
What is a hiring model?+
A hiring model is a 12-month plan that maps department-level new hires and attrition into ending headcount, fully-loaded compensation expense, and (for sales orgs) revenue capacity. It is the spreadsheet that lets a CFO or founder pressure-test whether the planned hires fit the budget.
How does the model handle ramp time for sales reps?+
It uses a single static productivity factor (typical range 0.7–0.8) applied to sales ending headcount, rather than a per-cohort ramp curve. Tune the factor so the productive-HC line reflects the blended state of fully-ramped plus ramping reps.
What does the benefits load multiplier cover?+
Employer payroll tax, healthcare, retirement match, and standard fully-loaded overhead. US tech orgs typically run 1.20–1.35× of base salary; European orgs run 1.30–1.50× because of higher employer social charges.
Can I add or remove departments?+
Yes. The builder is parameterised by a five-row layout per section. Add a row in Hires, Compensation, and Summary, extend the named-range list for starting HC, salary, and attrition, and update the Total SUMs.
Does this replace a full FP&A model?+
No. It is a people-cost forecast only. Pair it with the budget-vs-actuals or 3-statement template to wire compensation into the rest of the P&L and the cash flow.
Have more financial modelling questions? Contact us
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