On today’s episode of the RecruitingDaily Podcast, William Tincup speaks with Emily Connery from ChartHop about annual planning  and how it’s dead.

Some Conversation Highlights:

Are we moving away from annual planning to monthly or quarterly or weekly?

I think first and foremost, you absolutely need your leadership team aligned on approaching it differently. It could be considered as maybe more work or sort of riskier. I think your CFO needs to absolutely be on board, right, from a budgeting financial perspective. But I think the vast majority of companies simply cannot sit down at the start of the year and make a plan that will actually stick for the year.

I think what’s actually happening in reality, and maybe there’s levels of denial around this, but that it’s being revisited and reiterated throughout the year. I think quarterly is probably a cadence that is the most reasonable. For an earlier stage company, maybe series A. It could even be more often than that. It could be monthly, per your suggestion. But for us, quarterly has been working really well. And like I said, we’re two years old, we’re series B, we’ve hired 120 people this year. And so we make a plan for the year, but we know that we’re going to revisit it quarterly. And we really map out the sort of details of that plan on a quarterly basis. 

Tune in for the full conversation.

Listening time: 29 minutes

Enjoy the podcast?

Thanks for tuning in to this episode of The RecruitingDaily Podcast with William Tincup. Of course, comments are always welcome. Be sure to subscribe through your favorite platform.

Emily Connery
VP, People & Talent ChartHop

Emily Connery is the Head of People & Talent at ChartHop. She is a creative and adaptive Human Resources leader with 10 years of diverse experience in both early stage startups and large corporate environments. She has a proven track record of success in driving organizational effectiveness and coaching managers to attract and retain top talent while positively impacting the bottom line.

Emily is a champion of company culture, facilitator of cross-team communication, driver of leadership development, and challenger of the status quo. Prior to entering HR, Emily gained her master's degree from Columbia University in Mental Health Counseling and her undergraduate degree in Psychology and French from Tulane University, both of which have supported her career in the HR space.


Music:   This is RecruitingDaily’s Recruiting Live Podcast, where we look at the strategies behind the world’s best talent acquisition teams. We talk recruiting, sourcing, and talent acquisition. Each week, we take one overcomplicated topic and break it down so that your three year old can understand it. Make sense? Are you ready to take your game to the next level? You’re at the right spot. You’re now entering the mind of a hustler. Here’s your host, William Tincup.

William Tincup:   Ladies and gentlemen, this is William Tincup and you are listening to the RecruitingDaily Podcast. Today, we have Emily on from ChartHop, and we’re talking about annual planning is dead. D-E-A-D, dead. Now what? And fun topic, good timing. Can’t wait to talk with Emily and get her take on this. So let’s just jump right into it. Emily, would you do the audience a favor and introduce both yourself and ChartHop?

Emily:   Sure. Yes. Thank you so much. Nice to meet you, William. Really excited to be here today. I am the head of people and talent at ChartHop. I’ve been at ChartHop for about nine months. We are a two year old series B Andreessen Horowitz backed SaaS company. We’re about 140 people. We’ve hired about 120 people this year. So lots of growth, which requires lots of planning. And our product is awesome. It’s a people product. So I get to use it on a daily basis, but essentially it helps you with making better people decisions for your organization. And I’m really excited to talk about this topic today.

William Tincup:   That’s nice. Hey, before we do, people decisions, so just give the audience because, obviously, they’ll go and Google it and do all that stuff. But when you say that, what type of people decisions are you referring to?

Emily:   So decisions around org planning, hiring, promotions and development, basically it pulls together all of your people data from disparate systems, so that you can look at your organization holistically and be able to run analytics and make decisions in a dynamic way versus having to have set planning times throughout the year where you set aside a ton of time to really pull together all your disparate data. This allows you to operate much faster.

William Tincup:   I love that. I mean, it leads to what we’re going to be talking about. So annual planning. So what we’ve grown up or accustomed to, and it depends on with your calendar year or not, but normally October, November and December are usually those months where we squall away, capture a bunch of data, bring a whole bunch of data together and then make decisions for next year. And I always… I joke now, not always. I joke now about if we were in the room at Zoom in December of ’19, what would’ve been their hiring plan?

There was no way they could have foreseen what in 2020, of course, no one could. But how did they adjust? How did they create that after people started using them and consuming them in the way that they did, they had to hire… I don’t know, but they had to hire a couple thousand people. So how did they adjust? So it gets to that like, “Okay, if we’re thinking about October, November and December as planning months, we’re probably thinking about this incorrectly.”

Emily:   Yeah, absolutely. I mean, I think the whole annual planning method really only works for static organizations. But for scaling companies or when you need to pivot quickly, it just doesn’t make sense anymore. Nothing is what it used to be. Tenure isn’t what it used to be, career growth isn’t what it used to be, right? Technology certainly isn’t. And then of course the macro environment, to your point around the pandemic and needing to pivot. So I just think the whole sort of paradigm around planning really needs to be blown up and look at differently. And that’s why I think we need to make a big shift away from the annual mode.

William Tincup:   So let’s play with that for a second. So one of the things is this movement of adaptivity and resilience and also agility and making yourself a little bit more nimble, no matter what size of the company or any of that type of stuff, which is how do you become more nimble and agile. And I want to get your take on just kind of, okay, how do you change, let’s not just… because you’ve got both a people component mindset, we’ve got a process, so we got all these underpinning processes that are there and we’ve also got tech. So what do you suggest, for the practitioners that are listening to the call, where do we start? Because we’re going to change all three of those and if not more, where do we start first?

Emily:   Start first in terms of approaching it differently?

William Tincup:   Right. Yeah. Moving away from annual to monthly or quarterly or weekly, whatever just off of annual.

Emily:   Yeah. So I think first and foremost, you absolutely need your leadership team aligned on approaching it differently. It could be considered as maybe more work or sort of riskier. I think your CFO needs to absolutely be on board, right, from a budgeting financial perspective. But I think the vast majority of companies simply cannot sit down at the start of the year and make a plan that will actually stick for the year. I think what’s actually happening in reality, and maybe there’s levels of denial around this, but that it’s being revisited and reiterated throughout the year. I think quarterly is probably a cadence that is the most reasonable. For an earlier stage company, maybe series A. It could even be more often than that. It could be monthly, per your suggestion. But for us, quarterly has been working really well. And like I said, we’re two years old, we’re series B, we’ve hired 120 people this year. And so we make a plan for the year, but we know that we’re going to revisit it quarterly. And we really map out the sort of details of that plan on a quarterly basis. And-

William Tincup:   Real quick, Emily, sorry to interrupt, but is it rolling quarterly? So do you make it out for the year, let’s say 2022, and in Q1, once you get done with Q1, you’re looking at Q1 of ’23, is it rolling in like that? Or do you still do an annual, but then revisit it quarterly?

Emily:   It’s pretty much rolling. We have an executive offsite where we think about what the year might look like. And people sort of do their out of system ideation of what their orgs could look like, but when it actually comes to planning, we’re doing quarterly plans, right? We’re looking at how we did the previous quarter. And it’s not just performance of the company, and budget dollars, but it’s also really thinking about your talent. I mean, we keep hearing about the great resignation, but headcount planning has so much to do with talent retention and recruitment. I mean, if you want to keep your high performers, you need to make sure that they’re constantly challenged and growing. And if you hire above them or higher into a role that they might be interested in, then you risk losing them, right?

And so I think there’s all these factors that come into play that simply if you’re looking at it just from a year, you can’t make those changes to be able to retain your talent. Whereas quarterly, you can certainly look and see, do I have the right spots for people, right, in my org? And accommodate those in making the shifts. And I think too, there are definitely seasonal lows and highs throughout the year that… Some can be predictable, right? We know that the end of year holidays can be slow recruitment-wise, but things just happen and can slow down recruitment or speed up recruitment. And so I think you also need to take that into account and adjust your planning accordingly. So those are just some other things to consider.

William Tincup:   I love that. I love also that you brought leadership into it. It’s like get the board on board, get C-suite on board, especially the CFO, because if CFO is accustomed to annual planning and sticking to an annual plan and it being relatively rigid then it’s going to be harder or for some of the HR and recruiting leaders to then make some of those changes. They can switch budgets, but they’re still kind of locked in. And so I like the idea of, okay, if we can get the CFO on board with this, then there’s a flexibility. We’re going to start with a number, but if things cha- not if, as things change, I guess I should change the language there, as things change, we’ll change.

Emily:   Right. Yeah. And so there almost needs to be a very strong philosophical alignment between the CFO and CEO there, right? Because if they are thinking about it in very different ways, then we wouldn’t be able to be flexible as an organization.

William Tincup:   That’s right.

Emily:   And-

William Tincup:   Yeah. It’s a constraint that we can only be as flexible as their flexibility.

Emily:   Right. And if the budgets are constrained, something that we’re contending with… Well, everyone’s contending with is major market changes for certain jobs. Like for example, for product roles, the compensation is way up. And if that isn’t factored in and then you need to borrow from other areas, I mean, it’s not the best for your growing company.

William Tincup:   Right. Well, and the markets, right? The market’s going to bear what it’s going to bear. So if a candidate believes that… I was talking to a recruiter earlier about this, and she was struggling with having compensation discussions with candidates. And I said, “Listen, if you get 100 people and they all feel like they’re worth $280,000, it doesn’t matter what compensation data you’re looking at. They’re telling you what they’re worth. And you’re either willing and able to pay that or you’re not.”

Emily:   Right. Yeah. And then I think something that I’m happy we’ve done from the beginning is really set up clear level definitions and compensation bands that we look at at least twice a year to make sure we’re still competitive in terms of those bands, but setting in place some structure to make sure that there’s equity, fairness, that you’re recruiting into that. So then that might give some people solace if it’s a little scary to think about shifting from an annual plan to quarterly planning. That at least if you are planning around that sort of structure, it’s not just like wild, wild west. There’s order to the madness.

William Tincup:   Right. No. You’re just trying to respond to being able as a business. Especially HR and recruiting, as a part of the business, you’re just trying to be able to be more responsive. And it’s hard to be responsive once a year, but that’s how we grew up, right? I’m old enough to remember five year plans, which is, thankfully, never talk about anymore. But people would actually put together three and five year plans. It’s like, that’s outdated the very moment that you finish that plan. And I think one of the things that I love about your approach is you’re saying the same thing about annual planning. It’s like, the very moment you put kind of the final period on that document or whatever, it’s outdated.

Emily:   Yes, absolutely. I mean, it’s funny that you mentioned the five year plans. My parents can’t believe how long people stay at companies now. I think the average for people between 25 to 35 years is like 18 to 24 months. And people used to stay at their jobs for 20 years.

William Tincup:   Oh, yeah. But the upside of that when we think about it, because there’s a lot of negativity around that that’s in a popular press. It’s like job hopping is bad and all those type things. And I look at it, I’m sure you do too. It’s like, you want the best person while they’re there. And if at a point they think that there’s a better opportunity, great. That’s okay. But while they’re with you, if it’s 24 months, that’s two years, and they give you two years of great work, fantastic. It’s that mentality of let’s keep them. Well, first of all, they’re not house plants, so we don’t have to keep them, we should grow them, we should invest in training them and developing them. And well, we should also be happy if they find a better opportunity that we couldn’t create, good for them. We should be happy for them, not… It isn’t a negative thing, it should be a positive thing.

Emily:   Yeah. I totally agree. Some companies even call it graduating from the company to put a more positive spin, but some turnover is healthy, because if people are ready to move on, then that’s better for everyone. I totally agree with you.

William Tincup:   That’s exactly right. You don’t want them to be there to be unhappy. That helps nobody. Okay, so we’ve addressed the mindset, which I appreciate. Underpinnings of process. So you’ve been through this a jillion times, kind of unpacking the annual planning process and moving that, let’s say, to quarterly, because I think that is the next logical kind of place to move. What do they need to do? What do HR and TA professionals, what do they need to do to unpack the processes and redo and make sure that they can kind of start doing things quarterly?

Emily:   So I can speak to how we have ourselves set up. So basically, we have quarterly exec planning offsites, right? Which are virtual right now. But we look back at the previous quarter and set goals for the upcoming quarter. And in having those goals for the upcoming quarter, we can then make a head count plan around that. So each executive takes a stab at that just from a big picture, however, we really believe in having every single manager involved in headcount planning. And-

William Tincup:   Oh, that’s cool.

Emily:   Yeah. And this is where it’s nice to have a tool for headcount planning, because spreadsheets can make that a little cumbersome. But I think it’s really important for every manager to have the ownership of their hires, right? It’s a huge part of their job. And they’re the ones closest to the work that their teams are doing. And the growth plans that people on their team would like to see for themselves. So I think it makes the most sense to do a sort of roll up. So basically executives will say, here’s our departmental goals, go into ChartHop, which we use for planning and make your scenario for how you would achieve these goals for this quarter. What head count do you need?

So each manager goes in and does that. They share it with their executive and with me as the HR partner, we kind of go back and forth, making sure comp is competitive, the titles make sense, the levels make sense, or we want to look at it from like an equity perspective, is it aligned with how the team is set up right now? We certainly don’t want any unfairness. Making sure that we’re taking into account any developmental opportunities for people. And then we kind of merge all those scenarios together to look at what our quarterly head count plan might be. And this year, we’ve just kind of been off to the races. And so every team has really been growing like crazy, but maybe as we sort of level out a little bit and the growth might slow down, I mean, I’m certain companies hit chapters of that, then we might make more iterations to them. But that’s how we are approaching it right now.

William Tincup:   Do you start with revenue and basically that’s the beacon, the north star, right?

Emily:   Absolutely. Yep. We start with revenue. What is our ARR goal? And from that, how many account executives do we need to hit that? Right? And once you understand what your sales team needs to look like, then you can understand how many customer serving roles you need, right? So if we expect X amount of customers to come through, how many people do we need to really support them? So that can be pretty scientific on the [crosstalk 00:   18:   07] side.

William Tincup:   Yeah. I was about to say that’s all ratios at a certain point.

Emily:   Yeah, exactly. Yes. And there are economies of scale, like earlier on, you definitely need more customers support, for example, because your product is in the nascent phases. But the technology side of things is a little bit more of an art. It’s really, okay, if that’s our financial goals and that’s how many customers we hope to obtain, what do we think we need to build in terms of functionality, right, for our product roadmap. And then there are some ratios in terms of engineers to product managers. So that can help make it a little scientific, but really how many engineers do you need to build that roadmap? And then, okay, if you’re building all these different things, how many product managers do you need to own those pieces of the product? And then once you have your go to market and tech, then you look at your G&A, so how many people do you need to support all of those people? And that’s just something where I think there’s often under investment. So-

William Tincup:   Oh, 100%.

Emily:   Right? And-

William Tincup:   Especially in HR and recruiting.

Emily:   Yes, and recruitment. Yes. I think people have learned their lessons a little bit and people are staffing up their recruitment side of things a little bit more.

William Tincup:   Little harder to do right now, but yes. Yes, they are.

Emily:   It’s very hard. It’s really hard. But honestly, I think that’s what’s helped us be able to hit our hiring goals this year is we’ve staffed up on our recruitment side. And then on the HR side too, if you want to really retain and focus on your managers, making that a really strong group and focus on employee experience, you need the HR are people, right? They can’t just be doing the foundational work, they need to be able to go beyond that. And so I think that’s an important call out.

William Tincup:   Yeah. First of all, I love the way you bifurcated revenue and product, because at one point product is… they’ve not only sustain the product that you have, but then grow the product so that you can then sell what’s next and sell what customers want and all that other stuff. So I can see that being a little bit more challenging because the people that run product are going to want to push and they want the best product on the market. And so they’re going to want to push. Revenue seems to be a little bit easier to figure out once we set the goal. Once we set the AR goal, it seems a little bit easier to kind of figure that one out. But how do you reconcile? I guess that’s the thing that I know the audience is going to… Okay, because everybody wants something. R&D want something, sales, marketing wants something. Everybody wants something, everybody. And this is true of all budgeting cycles, but especially true in a quarterly situation. They all want something. How do you then make the tough decisions of who gets what?

Emily:   Yeah. Great question. I honestly think it comes down to the ability for the leadership team to collaborate together on the plan. I think there needs to be honest reflection on, okay, there’s our goals, and then there’s the things that are nice to do towards those goals, and the things that need to happen towards those goals. And so if we’re trying to be responsible, I think we need to think about the need to haves, right? And think about how to help the company overall operate the best it can, right? So not thinking about individuals, not thinking about specific intricacies of your team, but really having the leadership team step back and look at the company operating overall, what are the work processes that are really broken and what roles would fix that? What are the major gaps in terms of knowledge and training of our staff and how could that be fixed?

What capacity do we truly need? So that there’s sort of an objective lens first? And then it’s a matter of how much you want to sort of put gas on the fire. If you want to be aggressive, if you feel like the competition is nipping at your heels, or if you’re behind the wave even, then I think you need to be more aggressive. And it’s kind of always at this series B, series C stage where companies are a little nervous, they’ve hired all these people, maybe the financials still aren’t where they would really love them to be. And so you feel like you’re just burning all this cash without seeing the reward yet. And it’s a scary stage, but I think that’s where leadership team coming together, obviously, having great guidance from your investors, board members is key, but if you need to be bullish, I think you have to be bullish. And it can be really scary, but your planning has to match that.

William Tincup:   So two questions. One is the role of investors during an annual process, especially at series B, series C. They’re relatively active, they’re in there. Especially as board members, they’re definitely involved. In a quarterly process, maybe you can’t get their attention as frequently as something like that or maybe not. So what’s the role of investors in a quarterly planning process. That’s first question. And the second question is what do we learn from history? So if you do this and you move to quarterly and we just went through a quarter, let’s say we just went through… we’ll just act like we’re in January. We went through Q4 of ’21, what does Q4 teach us about Q1? I’m thinking about postmortems, like IBM used to have this training model, or excuse me, this consulting model where they broke it into thirds.

A third of the project, they would plan the project. A third of the project, they would do the project. And then a third of the project, they would then learn what they did during the project. And it was fascinating the way that they would break down, basically, how they would do a consulting gig. So it brings me to kind of thinking about on the second part of the question is how do we use history to learn good and bad? From what we just went through, how does it inform what’s next? So the investor role… Those are two different questions. The investor role and in history’s role.

Emily:   Yes. So in terms of our investors, we have at least quarterly meetings with our board. It’s pretty much every other month at this stage still. And I know that our CEO and our board stay close in terms of… especially key hires like VP and above that are huge investments for the company. Okay, if we think we need these five different types of executive level roles, what is their sense from what other companies are doing from the mistakes that they might have seen other portfolio companies do or successes in terms of the order of hiring those executives, right? Outside of those sort of critical more highly compensated roles, I think the board is kind of just interested in volume, right? So what size is each department, and how does that compare to what they’re seeing with other companies and especially aligned with, of course, the revenue goals?

It’s really interesting because I think investors and board members have this perspective of overseeing lots of different companies and they need to take sort of product into account, right? What industry are these different companies in because that, of course, changes things and they need to be aware of the competition as well to sort of give us a gut check on how bullish or not we need to be. But generally, I think they have a formula in mind, which is kind of what I went through in terms of planning through those different teams. And they just kind of can lean in and give their perspective on what they’ve seen other companies do. So it seems like it’s kind of a take it or leave it advice, right? And the CEO can do what he or she wants with that. Probably depends on your board members, but I think no one thinks that there’s a hard science to any of this. It’s kind of just being open to what you’ve seen done and your gut of where the market is. So-

William Tincup:   Right. And one of the things I know that they’re looking for is bloat, where one fiefdom, I’ll use words like that, where one fiefdom has just grown disproportionately. And they’re looking to kind of like, “Okay, well, why is that?” I mean, first of all, if there’s a good reason for it, fantastic. Well, let’s dig into it. But if there isn’t, then let’s dig into that. Why is that? But I see them being really, really useful, especially SaaS investors, like you all have. They’re looking across hundreds of thousands of SaaS companies to then kind of figure out what’s the right model. If there is ‘a right model’, they’re trying to figure it out.

And we might not ever figure it out, but at least they’re trying. And so I like their input and I like that you’ve brought them in to the process. And again, if they’re bought in and the CFO’s bought in and the rest of the C-suite’s bought in, it’s going to make this a whole lot easier to do quarterly and get everyone on the same quarterly page. Because we’re not just talking about planning, and on the other side of that, we’re talking about then the communication of the plan to everyone on the team so that everyone understands what we’re trying to do.

Emily:   Right. And you bring up an interest point about bloat. I think that’s where the HR partnership can really come in. If HR is staying close to managers and understands sort of the bandwidth of everyone and goals and how people are performing against their goals, you know who is over their capacity and who doesn’t have enough to do, right?

William Tincup:   100%.

Emily:   Those can really raise some flags on, okay, maybe we don’t need to prioritize hiring for this team because they seem to be able to handle the workload that they have while this team is struggling, but also looking at the work processes. Okay, is this team struggling because really this body of work should shift to this other team instead? I literally just had a conversation with a manager about this yesterday, actually. So now we’re shifting a work stream to another team to help that work load of the team that was stretched. So-

William Tincup:   Oh, that’s cool.

Emily:   Yeah. And so then you can make some responsible decisions where it’s not about just adding headcount, you need to ask some critical questions first about capacity. So yeah. Thank you for bringing up bloat. I think that’s a really good point.

William Tincup:   No worries. Last question. We’re almost out of time, but it was on the history. What can we learn? What do you see that we learn from doing this? And annual planning, it’s like, I forgot last year. I mean, last year was a good year to forget, however. But you know how it is. You go 12 months like, “Ah, I barely remember last week.” So what do you find with just kind of doing a quarterly and kind of learning from just the rapidity and velocity that you’re going through that learning on all fronts, learning in a good way and learning, “Oh yeah, we should do that differently.”

Emily:   Right. So I think this is where having a planning tool can be extremely helpful because then you could refer back to the headcount plan that was submitted for each quarter in the previous year. But we also use our same system, ChartHop, to log goals for every single person every quarter. So I think having that discipline of quarterly goals for everyone and quarterly goals for the company. So we have actually KPIs for the company that are org public, everyone can see them. We review them-

William Tincup:   Oh, that’s cool.

Emily:   Yes. We review them on a monthly basis, actually. So CEO gets up in front of the entire company and it’s like red, yellow, green in terms of how we’re doing against our KPIs. And he’s really honest with everyone, where we’re doing well, where we’re not. So it’s really clear to everyone how their roles fit into the company KPIs and how they contribute to the company’s success or how their struggles might be reflected in company performance. So I think that’s really key. And then we have quarterly performance reviews to have everyone reflect back on that, but having that ongoing, so it’s sort of monthly with those all hands looking at the KPIs, right, but then also the quarterly goals and performance reviews really keeps everyone honest about where we are and are not hitting the mark. And that very much informs the headcount planning thereafter. But I think that requires a certain level of transparency and directness, right? The leadership team needs to be direct with one another, right? The CEO’s going to get up in front of the company and say where we’re not succeeding. There’s no sugar coating.

William Tincup:   Right. Nor should there be.

Emily:   Right. And I think if you can establish that as in your culture and your process, then that makes those retroactive discussions much more data based. And like I said, having the tool, right, versus like, “Where did I have that spreadsheet? And that spreadsheet?” Having it all in one place certainly makes it a lot easier to have those reflections.

William Tincup:   I love it. Drops mic, walks off stage. Emily, thank you so much. This has been wonderful. And it’s just good to get our minds around thinking about this differently. So thank you so much for carving out time of your busy day and just kind of educating us.

Emily:   Oh, my pleasure. It was so nice to do this with you, William. I really enjoyed it.

William Tincup:   Awesome. And thanks for everyone listening to the RecruitingDaily Podcast, until next time.

Music:   You’ve been listening to the Recruiting Live Podcast by RecruitingDaily. Check out the latest industry podcast, webinars, articles, and news at recruitingdaily.com.

The RecruitingDaily Podcast

William Tincup

William is the President & Editor-at-Large of RecruitingDaily. At the intersection of HR and technology, he’s a writer, speaker, advisor, consultant, investor, storyteller & teacher. He's been writing about HR and Recruiting related issues for longer than he cares to disclose. William serves on the Board of Advisors / Board of Directors for 20+ HR technology startups. William is a graduate of the University of Alabama at Birmingham with a BA in Art History. He also earned an MA in American Indian Studies from the University of Arizona and an MBA from Case Western Reserve University.


Please log in to post comments.