Headcount grew 30%. Output grew 8%.

When a growing firm adds people and throughput barely moves, the usual suspects are the wrong ones. The arithmetic is more interesting than weak hiring.

By Steve 5 min read
Abstract bridge artwork for Headcount grew 30%. Output grew 8%.

A firm adds seven people to a team of twenty-three. Twelve months later, gross profit per head has fallen, jobs are running later than they did before, and the senior people are visibly busier than they were when the team was smaller. Nobody is idle. The invoices for the payroll increase arrive on time every month; the output does not. The first explanation reached for is usually that the new people are not good enough. Sometimes that is true. More often the pattern is structural, and it repeats across firms…

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Important: General information only. Rialto Bridge articles describe patterns and considerations that may apply to a business; they are not financial, legal, tax or accounting advice, and they take no account of your particular circumstances. Consider your own situation and seek advice from a qualified professional before acting.

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