# Headcount as Professional Services KPIDefinition, Calculation, Example

Why is headcount an important metric? How is headcount calculated and measured?

Headcount is the number which shows how many people are working in a group (organization or department).

## Why headcount is an important metric

It is the most straightforward metric but often not well known among employees when an organization has a more than 30 people. Also, headcount metric involved in calculation all other "per employee" calculations like annual profit per employee.

• How many contractors vs. full-time employees work in a specific department?
• How big is the team?
• How many people should we have the next year to reach the goal?
• Are we overstaffed for a particular role?

## How to calculate the average headcount

An average headcount formula is outlined as follows:
$$AVG\; headcount\; =\; \frac { \displaystyle\sum_{i=1}^n { { a }_{ i } } }{ n }$$
where:
n – days total
m – first day
ai – headcount at i-day

## Headcount calculation example

Let's calculate the average headcount for a week. On Monday, the company had 15 employees. On Tuesday, 2 employees left the company. On Thursday, a new employee had his first day.
Average headcount of the firm for a week is 13.8.
$$AVG\; headcount\; =\; \frac { 15\; +\; 13\; +\; 13\; +\; 14\; +\; 14 }{ 5 } \; =\; 13.8$$

## How to measure the average headcount

To precisely count the average number of team members, we recommend the use of software which could perform calculations each daily. Metric.ai tracks the number of employees on a daily basis and uses the average headcount in turnover calculations.
Metric.ai interface, employees section, headcount dashboard