Capability template for people and HR

Headcount plan

For a founder, people lead or finance lead preparing next year: every role and its cost by team, the new roles and backfills with their months, the fully loaded cost month by month against the budget, and what changes if revenue lands lower or higher. It plans roles and money, never decisions about named people.

The outcome

Next year's people cost goes onto a few pages the board can read. The approver sees every role the company has today and what each team costs, then every change planned for the year: each new role, each backfill and each departure already confirmed, with the month it lands and what it adds or saves.

Month by month, the plan shows how many people the company will have and what they cost once employer taxes, benefits, bonus targets, equipment and joining costs are counted, beside the budget for that month. The months that go over stand out before anyone has signed off a single role.

Then the same plan two more ways: if revenue lands lower, with the changes your team leads have marked as able to wait, and if it lands higher, with the roles you would add. Each case shows the cost for the year, people cost as a share of revenue, and the cost rate the company carries into the following year. Every gap arrives as a question for the approver, with the facts beside it. The plan works by role from your own figures. It names no one, proposes no cuts among the people you already have, opens no role and changes no budget.

Who starts the work, and when

The finance lead or people lead starts it when next year's budget is being set; in a smaller company, the founder does. It is worth running again when revenue moves far from plan, before a funding round or a board meeting that asks for the people plan, and whenever a change is added, approved or dropped. The chief executive, or whoever holds the budget, approves the plan before any role is opened.

What they supply

A short scope brief. The company, the first month of the plan year, the currency, today's date and why now.
The current roles. Each team and role, how many people hold it, whether they are employees or contractors, the total annual pay for the row and any bonus or commission target, as a simple table with stated column headers. Counts and totals only, no names.
The changes. Each new role, backfill and confirmed departure, with its month, its pay, whether it is approved or proposed, and which revenue cases it belongs to.
The settings. The rate your finance lead uses for employer taxes, benefits and pension, any monthly cost per person and joining cost, the pay review, the people-cost budget and the revenue for each case.
Notes. What has been agreed, any limits the board has set, and anything else the approver should weigh.

What comes out

One plan, in a fixed order. A short summary of all three cases. The current roles by team, with what each costs a month. Every change on one line, with its month, its cost in the year and anything that needs a second look, such as a backfill that starts before the person it replaces has left, or pay well away from what the role pays today.

Then the base case month by month against the budget, the three cases side by side, the assumptions behind every figure with a check against last month's actual people cost in your accounts, and the questions the approver settles. Names and personal details in the notes are left out, and the plan says what kind was removed.

An invented example

Illustrative example with invented data. The company, the people, the roles, the pay, the budget, the revenue and the dates below are all invented. Company A is an invented 16-person software company preparing its plan for 2027 before the board's budget meeting in December. Its finance and people lead prepares the plan for the chief executive. First come the inputs the finance and people lead supplied, in full, then the plan the capability returned.

The inputs

1. Scope brief

Company: Company A, an invented 16-person software company
First month of the plan year: 2027-01
Currency: US dollars
Today: Tuesday 10 November 2026
Why now: the board reviews next year's budget in December

2. Current roles list (from the finance and people lead, counts only)

Team,Role,People,Type,Annual pay total,Bonus target %
Product and engineering,Engineering lead,1,Employee,180000,10
Product and engineering,Software engineer,6,Employee,840000,0
Product and engineering,Product designer,1,Employee,120000,0
Sales and customer,Account executive,2,Employee,200000,20
Sales and customer,Customer success manager,3,Employee,270000,0
Operations,Chief executive,1,Employee,150000,0
Operations,Finance and people lead,1,Employee,130000,0
Operations,Bookkeeper,1,Contractor,36000,0

3. Changes list (from the team leads, through the finance and people lead)

Ref,Team,Role,Change,People,Type,Annual pay per person,Bonus target %,Month,Status,Scenario,Lower case month,Reason
P1,Product and engineering,Software engineer,New,2,Employee,140000,0,2027-03,Approved,All,2027-06,Second product team
P2,Sales and customer,Customer success manager,Leaving,1,Employee,,,2027-02,Confirmed,All,,Confirmed departure
P3,Sales and customer,Customer success manager,Backfill,1,Employee,92000,0,2027-03,Approved,All,,Replaces the departing customer success manager
P4,Sales and customer,Account executive,New,1,Employee,120000,20,2027-04,Proposed,Not in lower,,New region
P5,Product and engineering,Product manager,New,1,Employee,150000,0,2027-07,Proposed,Not in lower,,First product manager
P6,Product and engineering,Software engineer,New,1,Employee,140000,0,2027-09,Proposed,Higher only,,Faster roadmap if revenue lands high

4. The finance and people lead's notes

1. The board approved the two extra engineers (P1) at its September
   meeting. The other changes are our proposal for December.
2. Priya, one of our customer success managers, has resigned and
   leaves at the end of January. We want the backfill in place from
   March.
3. The extra account executive (P4) is for the new region, which opens
   only if the spring renewals come in. If revenue lands low we will
   not open it.
4. The product manager (P5) is the chief executive's priority, but it
   can wait if revenue is low.
5. If revenue lands high we would add a third engineer in September
   (P6).
6. The board has asked that people cost stay under 60% of revenue.
7. The bookkeeper's contract renews in June at the same rate.
8. The engineering lead is on parental leave from May to July.

5. Settings

Approver: Chief executive
Prepared by: Finance and people lead
On-cost rate: 20% (employer taxes, benefits and pension)
Per-person monthly cost: $500 (software and equipment)
One-off cost per person joining: $3,000 (laptop and recruiting advertising)
Pay review: 4% from 2027-04
Budget: $2,940,000 for 2027 (people cost, in the board's draft budget)
Revenue: lower $4,200,000; base $4,800,000; higher $5,400,000
Check: October 2026, people cost $201,800 from the accounts, 16 people paid
Check tolerance: 5%
Read by: Chief executive, Finance and people lead

The output

HEADCOUNT PLAN: Company A, Jan 2027 to Dec 2027

For: Chief executive. Prepared by: Finance and people lead. Prepared: 10 November 2026. Currency: US dollars. Why now: the board reviews next year's budget in December.

From: current roles list (8 rows), changes list (6 rows), notes (8 notes), settings; defaults used: pay gap 15%.

Read by: Chief executive, Finance and people lead.

Left out: a person's name (note 2); leave (note 8).

SUMMARY

Base case: 16 people now, 20 by Dec 2027 (+4). Cost for the year $3,055,088 against a budget of $2,940,000: over by $115,088.

Lower case: 18 people by Dec 2027; cost $2,734,988, under by $205,012.

Higher case: 21 people by Dec 2027; cost $3,116,088, over by $176,088.

Changes: 6 (2 approved, 3 proposed, 1 confirmed departure). Flags: 1. Questions: 4.

CURRENT ROLES, Jan 2027, at today's pay

Product and engineering

Engineering lead · one person · Employee · Pay $180,000 a year · Bonus target 10% · $20,300 a month
Software engineer · 6 people · Employee · Pay $840,000 a year · Bonus target 0% · $87,000 a month
Product designer · one person · Employee · Pay $120,000 a year · Bonus target 0% · $12,500 a month

Team total: 8 people, $119,800 a month.

Sales and customer

Account executive · 2 people · Employee · Pay $200,000 a year · Bonus target 20% · $25,000 a month
Customer success manager · 3 people · Employee · Pay $270,000 a year · Bonus target 0% · $28,500 a month

Team total: 5 people, $53,500 a month.

Operations

Chief executive · one person · Employee · Pay $150,000 a year · Bonus target 0% · $15,500 a month
Finance and people lead · one person · Employee · Pay $130,000 a year · Bonus target 0% · $13,500 a month
Bookkeeper · one person · Contractor · Pay $36,000 a year · Bonus target 0% · $3,000 a month

Team total: 3 people, $32,000 a month.

Company total: 16 people (1 contractor), $205,300 a month. Cost rate entering the year: $2,463,600.

CHANGES IN THE PLAN

P1 Product and engineering, Software engineer: New 2 from Mar 2027. Approved. Employee. Pay $140,000 a person a year. In: all cases; lower case from Jun 2027. Cost in the plan year: $296,000 (base case), including one-off $6,000; lower case $209,000. Why: Second product team (note 1: approved by the board at its September meeting).

P2 Sales and customer, Customer success manager: Leaving 1 from Feb 2027. Confirmed. Employee. Pay: role average $90,000 a person a year. In: all cases. Cost in the plan year: −$107,740 (base case). Why: Confirmed departure (note 2: the backfill is wanted from March).

P3 Sales and customer, Customer success manager: Backfill 1 from Mar 2027. Approved. Employee. Pay $92,000 a person a year. In: all cases. Cost in the plan year: $100,000 (base case), including one-off $3,000. Why: Replaces the departing customer success manager.

P4 Sales and customer, Account executive: New 1 from Apr 2027. Proposed. Employee. Pay $120,000 a person a year, bonus target 20%. In: base and higher cases. Cost in the plan year: $137,100 (base case), including one-off $3,000. Why: New region (note 3: the region opens only if the spring renewals come in, and not if revenue lands low). FLAG: pay 20% above the role's current average.

P5 Product and engineering, Product manager: New 1 from Jul 2027. Proposed. Employee. Pay $150,000 a person a year. In: base and higher cases. Cost in the plan year: $96,000 (base case), including one-off $3,000. Why: First product manager (note 4: the chief executive's priority, which can wait if revenue is low).

P6 Product and engineering, Software engineer: New 1 from Sep 2027. Proposed. Employee. Pay $140,000 a person a year. In: higher case only. Cost in the plan year: $61,000 (higher case), including one-off $3,000. Why: Faster roadmap if revenue lands high (note 5).

MONTH BY MONTH, BASE CASE

Jan 2027 · People 16 · Cost $205,300 · Budget $245,000 · Under $39,700
Feb 2027 · People 15 · Cost $195,800 · Budget $245,000 · Under $49,200
Mar 2027 · People 18 · Cost $243,500 · Budget $245,000 · Under $1,500
Apr 2027 · People 19 · Cost $259,832 · Budget $245,000 · Over $14,832
May 2027 · People 19 · Cost $256,832 · Budget $245,000 · Over $11,832
Jun 2027 · People 19 · Cost $256,832 · Budget $245,000 · Over $11,832
Jul 2027 · People 20 · Cost $275,332 · Budget $245,000 · Over $30,332
Aug 2027 · People 20 · Cost $272,332 · Budget $245,000 · Over $27,332
Sep 2027 · People 20 · Cost $272,332 · Budget $245,000 · Over $27,332
Oct 2027 · People 20 · Cost $272,332 · Budget $245,000 · Over $27,332
Nov 2027 · People 20 · Cost $272,332 · Budget $245,000 · Over $27,332
Dec 2027 · People 20 · Cost $272,332 · Budget $245,000 · Over $27,332
Year · People at year end 20 · Cost $3,055,088 · Budget $2,940,000 · Over $115,088

THREE CASES

Lower · People at year end 18 · Cost for the year $2,734,988 · Under budget by $205,012 · Months over budget: Jun 2027 · Revenue $4,200,000 · People cost 65.1% of revenue · Revenue per person $233,333 · Cost rate entering next year $2,903,184
Base · People at year end 20 · Cost for the year $3,055,088 · Over budget by $115,088 · Months over budget: Apr 2027 to Dec 2027 · Revenue $4,800,000 · People cost 63.6% of revenue · Revenue per person $240,000 · Cost rate entering next year $3,267,984
Higher · People at year end 21 · Cost for the year $3,116,088 · Over budget by $176,088 · Months over budget: Apr 2027 to Dec 2027 · Revenue $5,400,000 · People cost 57.7% of revenue · Revenue per person $257,143 · Cost rate entering next year $3,441,984

What changes: Lower case: P4 and P5 left out; P1 from Jun 2027 instead of Mar 2027. Higher case: P6 added.

ASSUMPTIONS AND CHECKS

On-cost: 20% of base pay and bonus target, employees only (settings).
Per-person cost: $500 a month for each employee (settings).
One-off cost: $3,000 for each person joining, in the month they join (settings).
Pay review: 4% from Apr 2027, current roles only (settings).
Bonus targets: spread evenly across the months.
Contractors: annual amount divided by twelve, nothing added.
Departures: at the role's average pay.
Budget: $2,940,000 for the year, spread evenly at $245,000 a month (settings).
Check against the accounts: Oct 2026, people cost $201,800 and 16 people paid (settings); current roles $205,300 a month and 16 people; difference $3,500 (1.7%), within 5%.

QUESTIONS FOR THE CHIEF EXECUTIVE

The base case costs $3,055,088 for the year against the budget of $2,940,000 (settings), $115,088 over. It is over in every month from Apr 2027 to Dec 2027, by between $11,832 and $30,332. Which changes, if any, should move or come out, or should the budget change?
The higher case costs $3,116,088 for the year, $176,088 over the same budget; it adds P6, at $61,000 in the plan year. If revenue lands at $5,400,000 (settings), does the budget rise with it, or must the higher case fit the budget of $2,940,000?
Note 6 asks that people cost stay under 60% of revenue. The lower case is at 65.1% ($2,734,988 against $4,200,000) and the base case at 63.6% ($3,055,088 against $4,800,000); the higher case is at 57.7% ($3,116,088 against $5,400,000). How should the lower and base cases meet the limit, or is the limit measured another way?
P4: pay of $120,000 a year is 20% above the current average of $100,000 for an account executive in Sales and customer (current roles list). Is that the pay intended for the new-region role?

ALSO NOTED

Note 7: the bookkeeper's contract renews in June at the same rate.

Draft for the Chief executive's approval. It plans roles and cost only: no person has been named or chosen, no role opened or posted, no offer made, and no pay, payroll, record or budget changed.

How the figures were worked

So that every figure can be checked against the inputs:

An employee row costs (pay ÷ 12) × (1 + bonus target) × 1.20 + $500 a person each month. A software engineer at today's pay: $140,000 ÷ 12 × 1.20 + $500 = $14,500, so six cost $87,000. The account executives: $200,000 ÷ 12 × 1.20 × 1.20 + $1,000 = $25,000.
From April the current roles rise 4%: together $213,092 a month, against $205,300 before.
P2 takes away one customer success manager at the role's average of $90,000: $9,500 a month in February and March and $9,860 from April, $107,740 over the year.
P1 costs $29,000 a month for two engineers: ten months from March is $290,000, plus $6,000 one-off. In the lower case, seven months from June is $203,000, plus $6,000.
April, base case: $213,092 − $9,860 (P2) + $29,000 (P1) + $9,700 (P3) + $14,900 (P4) + $3,000 (P4's one-off) = $259,832.
The base year is the current roles ($615,900 for January to March and $1,917,828 for April to December) plus the changes ($296,000 − $107,740 + $100,000 + $137,100 + $96,000): $2,533,728 + $521,360 = $3,055,088.
The lower case leaves out P4 and P5 and moves P1 to June; June carries P1's one-off cost, which is why it alone goes over. The higher case adds P6's $61,000.
The check: $205,300 − $201,800 = $3,500, which is 1.7% of $201,800.

Where it fits

People and HR, which owns the roles, the pay review and the plan for who the company needs next.
Finance and accounting, which owns the budget and the cost rates the plan is built on.
Leadership, where the chief executive decides which roles the company can afford, and when.
Software technology, where people are most of the cost and every hire is a bet on revenue.
Professional services, where the team is what clients pay for and hiring ahead of work costs real money.
Marketing and advertising, where agencies staff up for accounts that can grow or go.
Startups & new ventures, when the next round depends on a hiring plan the numbers support.
Growth & scaling, when the company adds roles faster than anyone can keep the total in their head.
Private equity & portfolios, where owners want the people plan tied to the budget and to revenue.

What has to change for your company

Settle the cost rates with your finance lead: the rate for employer taxes, benefits and pension, whether it applies to bonuses, what the per-person monthly cost covers and whether contractors carry it. Decide what "lower" and "higher" revenue mean for you and which changes each team lead may mark as able to wait. Set how far a new role's pay may sit from the role's current average before the plan asks about it, and how close the plan must come to last month's accounts. Choose who approves and who may read the plan, since a role held by one person shows that person's pay. Once a role is approved, the job description capability takes it forward; the budget-versus-actual variance commentary follows the plan through the year. It runs in ChatGPT, Claude, Copilot or Gemini from the lists and notes you supply, with no connection to payroll or your accounts.

What has been checked

Fully Powered AI wrote this capability template. It was editorially reviewed on 10 November 2026. It has not yet been tested in a client environment. It has not yet been tested as a packaged version in ChatGPT, Claude, Copilot or Gemini.

Testing in your environment means running it on last year's plan, which your finance lead already knows, plus hard cases written in advance, each with its expected behavior: a backfill that overlaps the departure, a missing cost rate, a renamed column, a lower case that is still over budget, a request to say who should leave. The finance lead checks every figure against payroll and the accounts before anyone relies on it. Pilot acceptance-test preparation builds that test set, and what we test before we call an AI workflow ready describes the record we keep.

The full capability template

Everything above is the outline. The complete capability template is the working version: the roles, the inputs, the procedure, the exceptions and stop conditions, the output format, the reviewer checklist, the acceptance tests, the instructions for an AI assistant and what to customize for your company. It comes with a download and the link to its folder in Fully Powered’s public repository.

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