HR metric - Headcount Change Year over Year (YOY)

What (Definition)

Headcount Change Year over Year (or Headcount Delta Year over Year) measures the change in Headcount this year compared to previous year.

Why (Benefits)

Headcount changes are very common in all companies. New employees join and existing employees may leave anytime. A growing company sees increase in headcount and during tough economic times, companies may have to reduce headcount to cut expenses. Monitoring headcount changes is extremely important.

While the absolute headcount metric is useful to know the number of employees, this metric Headcount Change measures the change in headcount.

This metric allows us to focus easily on the change whether this is up or down and the magnitude of the change.

Let’s take the 2 charts below.

Headcount Change Year over Year metric Visual

While the first one shows the headcount trend yearly, the second chart shows the change in headcount yearly as a %. While the first chart can inform us of the overall trend, minor changes are not easily visible. This is where the second chart is useful. It shows the direction of change (increase or decrease) very clearly.

How (Calculation)

Formula:
Headcount Change Year over Year
= (Headcount in current Year – Headcount in same period previous year)
Headcount Change Year over Year %
= (Headcount in current year – Headcount in same period previous year) / (Headcount in same period previous year)

Let’s take an example. You can see below a table of headcount data as of end of each year in our fictional company.

Headcount Change Year over Year calculation - HR metrics

We have calculated Headcount Change (YOY) as Current Year headcount - Previous Year headcount.

For example, end of 2012 we had 195 employees while end of 2011 we had 205. That is a reduction in 10. Hence it is -10.

We also calculate this Headcount change as a %.

For 2012, it is (-10 / 205) = -5%

Headcount reduced by 5% in 2012.

In this example, I am assuming our headcount measurements are taken as of Dec 31st each year. It could be end of March 31st or any date. However, they need to be the same for each year. That will make sure that we are calculating change yearly (from 12 months earlier)