How Many Employees Do You Really Need?

For growing businesses, one of the most challenging yet crucial decisions is determining the optimal team size. Whether you're scaling quickly or reassessing capacity post-growth, knowing how many employees you actually need is key to staying productive, competitive, and cost-effective.

There’s no single formula that applies to every organisation, but there are reliable indicators that can guide workforce planning.

Key Factors That Influence Hiring Decisions

According to Indeed’s hiring guide, the number of employees you need depends on a combination of financial metrics, operational demands, and cultural factors. Below are some of the most useful areas to assess:

1. Monthly Revenue and Revenue per Employee

Start by dividing your monthly revenue by your current number of employees. This gives you a baseline for productivity and helps benchmark future hires. If your revenue per employee is strong, you may have the capacity to take on more work. If it’s declining, it could signal inefficiency or over-hiring.

2. Workload and Role Clarity

Review how work is currently distributed. Are key staff members stretched too thin? Are there bottlenecks or repeated tasks that could be streamlined or reassigned? These insights often highlight gaps where additional support could increase performance and reduce risk.

3. Review Your KPIs

Business performance indicators – whether related to customer service, sales, compliance, or delivery – can reveal whether staffing levels are aligned with expectations. Missing targets consistently may suggest a need for extra capacity or a more specialised hire.

4. Productivity and Burnout Risks

Employee well-being plays a significant role in retention and team performance. If workloads are causing stress or teams are regularly working overtime, it may be time to consider bringing in additional support – whether temporary or permanent.

5. Company Culture and Structure

As teams grow, structure and management requirements evolve. Sometimes businesses hire more employees when what they actually need is a clearer organisational chart or more effective delegation.

6. Future Plans and Projects

Growth plans, new service lines, or seasonal peaks can all drive the need for additional resource. Understanding what’s ahead will help shape your short- and medium-term hiring needs.

How to Work Out the Right Number

There are a few practical steps businesses can take when deciding on their next hire:

• Audit team capacity: Speak to line managers about current and projected workloads.
• Check against benchmarks: Use tools like revenue per employee and industry benchmarks.
• Forecast growth: Consider not just where you are now, but where you want to be in 6–12 months.
• Review existing talent: Sometimes upskilling or redeploying an existing employee may be a more effective move than hiring new staff.

When to Get Help

Recruiting the right number of people – and the right kind – is one of the most business-critical decisions you can make. A recruitment partner can help provide local market data, salary benchmarking, and insight into role scope and team structure.

At Allen Associates, we work with organisations across Oxfordshire to help them navigate hiring decisions with confidence. Whether you’re looking to scale, backfill, or restructure, we offer guidance on when and how to hire – and who might be the right fit.

Final Thoughts

If you're asking, “How many people do we actually need?” – you’re not alone. It's one of the most frequently asked questions by employers at all stages of growth. The answer lies in examining your performance, people, and plans – and being honest about where additional support could make a difference.

Connect with Allen Associates

Need help assessing your team's needs? We specialise in HR, Finance, Marketing, and PA/Administration roles and can help you recruit with clarity and confidence.

Contact us today or read about our recruitment process to find out more about how we work.