Reducing the risk in growth
The economy has picked up and our business has picked up with it. MK Partners is back in growth mode and since we have a profit sharing plan here, many of us have some concerns about the financial risks involved in hiring new employees. In the past, we had relied heavily on seasonal trends, but with all the economic issues we’ve experienced in the last year, we decided to take a more scientific approach. Fortunately for us, we manage our entire business in salesforce.com and have access to some key metrics that actually reduce our risks in growth.
We’re primarly a services firm, so the first metric we look at is our billable hours. We track all of our time in SaaS TEa our time and expense application. At any moment we know how many hours each employee is spending on their projects. We also know how many hours are included in those projects and when they’re expected to be complete. Many of our projects are long term, so we actually know how many hours will be worked for them months in advance.
Next, we look at our pipeline. All of our leads and opportunities are also in salesforce, so we know how many deals are in the works, the timeframe for those projects, number of hours included, and likelihood that they close.
Right now, we’re concerned about February. So, we look at the number of hours to be billed based on our current projects and add in a percent of the possible hours in the pipeline. If the number is greater than what we can offer with our current staff, then we know that we need to either adjust project start dates or hire new staff.
The percent of possible hours to add will vary depending on your historical track record of closing deals. In general, the more historical data you have the more accurately you can measure your win rate. The same concepts apply for any organization with long sales cycles (definitely works differently for retail).
Of course knowing that we need to hire is really the easy part, the greater risk is in finding the right people. We happen to also manage recuriting in salesforce.com too, so stay tuned for another post on how we do that. What metrics are you tracking in salesforce?