Somrat is the Head of Business for Gusto Embedded Payroll, so he oversees a cross-functional org that includes finance, HR, go-to-market, and product teams. He previously oversaw Gusto’s strategic partnerships, technology ecosystem, distribution partnerships, and the developer ecosystem. Somrat also has founded two VC backed companies, both of which were later acquired. Somrat gets really involved with headcount management and org design at Gusto, and shares what's made him successful over the course of his career.

Chapter list

00:00 - Cold Open

00:14 - Introducing: The Headcount People podcast00:54 - Guest introduction - Somrat Niyogi

02:53 - Why is headcount planning important?

04:14 - What has worked for you that viewers can use as a blueprint for headcount planning?

08:14 - What is effective org design?13:10 - Why build your org chart in a slide deck vs an org chart product?

15:27 - How do you keep all of these things in sync?

20:23 - What are the best ways to work with GMs, CEOs, and also department and function leaders?

23:02 - Best practices and parting advice for adjusting strategy.

[00:00:00] Hey sound. Good to see you again today. Um, good to see you for all our list, for all our listeners. Uh, I, I met Soma almost a year ago, uh, when we were researching and building on the early idea of headcount planning and headcount management with Timana. And, uh, how I got introduced is that Soma, lots of experience has built, big teams, manages a big budget now at Gusto, uh, as the head of.

The embedded payroll product, um, and is also very opinionated on how to build teams and how to do headcount management. So I reached out to Somera for advice on what we should be doing, and it's been a great year learning from his experience. So today I invited you to actually share some insights and your experience with the wider audience. So do you wanna just start by introducing yourself for the audience, please? 

Yeah, sure. So, uh, Shara I, uh, work at, at Gusto. I, I run a new emerging

[00:01:00] business, um, within, uh, the Gusto portfolio, which is our embedded, uh, our embedded business line, uh, which starts with the payroll.

Uh, previously I was, uh, responsible for business developments. All of Gusto from strategic partnerships to managing our technology ecosystem, uh, our developer platform, and doing distribution deals. Uh, previously, you know, been part of early stage companies, mid stage companies, uh, and have founded a few companies along the way.

Awesome. So, so let's just dive in. Why is headcount management and headcount planning an important process, right?

Given that you have worked at a 50% organization all the way to a 3000, 4,000 plus organization, right? Um, from your perspective from now leading a business as a gm, why, why do you think companies should indulge in headcount? 

Well, I think strategy is

[00:02:00] really about people, and I think that, uh, in order to execute any strategy and in order to achieve any business outcome, you need to have the right people in the right roles with the right functional design, uh, with the right levels and the right management structure.

And so to me, planning, uh, particularly around. What type of organization are you actually trying to build can really dictate the success of your business. 

So, you know, when we speak to talent leaders, HR leaders, and you know, I've been spending time with finance leaders, they are all talking about budgeting, and then they're all talking about planning as more of a very contained once a year or at twice a year kind of an exercise, but, Given that you are running the whole business and you have a finance team, you have a HR team, and you have a recruiting team that

[00:03:00] all bubble up to you and reporting to you, what is your process, uh, at the beginning of the year?

And you also mentioned that you should do continuous planning. So what has worked for you that can be, you know, a blueprint for leaders that are listening onto this call today?

 Really it starts with the leadership. And, uh, what has worked well is really starting with thinking about org design, uh, by removing, uh, Removing the people out of the equation first, right? Like, what is the right org Design that can help align to the outcomes you're trying to achieve. And so, I kind of institutionalized this, uh, independent process that leaders kind of go through where they are, where our managers are ultimately defining their orgs and their functions, and they're going through their independent thought process of what they think they need to

[00:04:00] achieve, knowing.

At one abstraction level, higher, I might be changing things up, but I look at that as just various inputs to what is the optimal design by also learning and listening from, from our leaders. Once we get through a effective org design process. Um, the next thing we're trying to do is to, uh, understand what is the actual, uh, headcount people are, are requesting.

Uh, this is typically. done not through, uh, something that I'm proud of, but, you know, lots of spreadsheets. 

These spreadsheets become a, a starting point of a, a next level conversation around prioritization and, uh, prioritization's interesting because, uh, prioritization starts at sort of two levels. One is what is a priorities within, uh, the, the actual functional department. And then there's the leaders kind of coming together and prioritizing against all, uh, all departments.

And so leaders kind of have to operate, uh, with an understanding across all, uh,

[00:05:00] various, um, uh, functional teams and units. And I think the, it's really important as leaders is that we are being very, we're kind of listening and we're learning from each other.

We're kind of calibrating each other. Like, what is, what are our goals? What are our outcomes and how do we get there? And what are the people strategies that needs to go, uh, to ultimately achieve it? Now, ultimately, what we're trying to do is think here, here are the plan. And if we hire these people, we can get to these outcomes. But then we kind of ha then we have to triangulate to say, well, depends on the budget that we have. And, you know, I'm not the only business unit across, so there's all types of other teams that are also trying to grow and, and, and, uh, have their own goals to achieve.

And so ultimately we get an envelope and we have, we have influenced that envelope by sharing sort of scenario. Right. Here's a, here's the best case scenario. If we draw our team in this specific way, and here's the strategy behind it and here's the org side and so forth, then here's the one, one outcome.

You know, here's a low

[00:06:00] case. If we have this type of team, here's what we can be. Ultimately, those are inputs that ultimately finance can take into consideration. 

 The reason why I talk about it as an ongoing thing is because as your, as your business evolves, right, as you achieve, you know, your interim milestones towards the longer plan, You're constantly asking yourself, is this the optimal, the design of the team?

Is this the optimal way that we should work? Do we have a room for improvement in this function area or that functional area? And are we finding new needs in this business that we previously have? Uh, you know, missed. I mean, you know, as much as you go through a planning process and you've articulated what you think you need, you learn things because that's the process of building a business.

The team is that you learn things and then you kind say, Well, I need to, you know, I need to have these two or three head count. And then it becomes an ongoing process of, well, what head counts, you know, that was not previously in the plan. And then now we have to like add the letter count what we thought the fit into the budget.

So we have to remove a head count.

[00:07:00] And so I always think of head count planning as an always on. Activity. 

Got it. So let me, There's a lot to unpack there, but let me summarize. I think what I, the key points that I understood here is that what is very different was instead of starting with the top down budget, and I try to shoe headcount around that budget, I really like the idea that how you are starting from. The needs and the requirements in allowing your leaders and your teams to come up with a board of a bottom up plan. Like, Hey, what do we need to go and become successful and deliver on your goals? And you mentioned something called as effective org design, and I know you and I have had multiple conversations around these, uh, which have spanned many hours given the time that we have today.

 Can you share a little bit more about that effective org design process? 

So, so. Uh, effective or design, I'm still learning what is, what it means to be effective, but what I will say is, the way I think about this, um, is

[00:08:00] what's the, what's the right organizational structure that really creates clarity of function, roles and responsibilities. Uh, across different functional teams to get to an aligned outcome. And, uh, that really ties to the, uh, initiatives that you are ultimately driving both in near term horizons and, and longer term horizons. You kinda have to think about both things in both ways, and so you have to have the foresight not only in terms of what is required for. The next quarter, two quarters, three quarters for comp. But you're also trying to understand how that org can change over time. 

I think sometimes what happens is we, we miss the next organizational design. Uh, and so we, uh, the way that we have operated this, um, uh, within our team today, and I've have great leaders that, uh, I have the, the unique fortune to

[00:09:00] work with is, uh, we go through, At least once a quarter, me and some other leaders within our team, I have an amazing, uh, uh, code GM that works. We're closely with, and we're always talking about the problems with the way that we operate, you know, um, and the challenges that we're facing to achieve business outcomes. And we're just scenario planning various types of ways that the organization design can achieve a better. There's a lot of messiness in terms of building a business.

And so, You know, we, we don't have any rocket science behind this. We, we kind of have, we build slide decks. We, uh, uh, on a quarterly basis we kind of think about functional teams and designs.

We talk about the maturity of those functional areas. Uh, we talk about different types of functional reporting structures. Um, we discuss, uh, uh, possible ways to think about those reporting

[00:10:00] structures in the context of our people. And in some cases we just talk about it and we kind of put in a corner and we say, Oh, great, great.

Well that's good. We're, we're planting, we're talking about this. Because at some point we'll go back and say, and this is every quarter, we kind of come back and say, Hey, do we need to, to actually make a change? Like do we actually need to make a change? Sometimes that happens or ad hoc because, uh, there's people changes in our business and team and we have to kinda operate fairly quickly.

Um, but by the way, that notion is actually of like building an org. Of functional departments, uh, minus the people is actually something we do at, uh, at a leadership level too. So it's not only at the, at, um, where the code GMs kind of like kind of operate and kind of work with our people team and, uh, to kind of align around.

But we're also doing that with our leaders because we wanna scale the way that we think about this, right? It's not just about, you know, uh, me, uh, sort of thinking about some off all teams. Obviously the leadership that we have is extremely incredible.

[00:11:00] They're have their own perspective. Um, so, you know, ultimately that translates to a spreadsheet and then we kind of, it's becomes a very messy process there because, you know, the org design and the spreadsheet are ultimately disconnected.

And then, you know, it becomes this interesting dynamic of like, how do you keep the spreadsheet and the org chart. Kind of constantly evolving, especially maybe in the beginning it sounds like nice and clean, and then we have to make a change and then everything kind of gets out of sync. And it takes a lot of work to ensure that our, that we're kind of building our own, uh, mental processes to ensure that, that these capabilities are in sync in terms of, especially if.

If new roles are coming in and we had to like, you know, cancel a role or we had to deprioritize or we had to push a higher date out, there's all types of things that we're doing as our business, um, evolves as, as we, uh, achieve things in our, in our plan.

So, So that's great. 

So you said the org chart slide deck is connected to a spreadsheet or you try to map it back to a spreadsheet.

[00:12:00] So, but you are using, uh, you may, you already have like an H R I S system that you would be using. Uh, is there any, how, why build the org chart in a slide deck and not use a more traditional org chart product?

Like what do you think is the missing link there? 

you just can't do that. I mean, the, the tools that exist today, uh, Workday and, you know, you know, I, I, I don't have experience with, uh, other platforms. Um, they're just the final input, right? Like, Hey, now I need to get like a job requisition in and I need to like, get approval. It's kind of like the last step. 

Um, and you know, the beauty of of, uh, sometimes the an empty, uh, slide that's just a white screen is you can put a square, you can, you know, connect dot and so. Um, and, uh, you know, effectively that process of collaboration, that process of

[00:13:00] explore exploration of potential scenarios is a, it's constantly an evolving thing and you're collecting new inputs, you're collecting new people inputs, and then ultimately you're kind of like rethinking.

 But the reason why we're doing things in spreadsheets and in slide decks is, is ultimately because, you know, planning, to me, is a collaborative process.

It is a process where leaders are coming to together, both business leaders, And the people team come together to align on what's the right people strategy to achieve this not come. That process is, is just as important, if not the most important part. Um, uh, then the final step to say, we have this headcount plan approved and here's the 50 people that you need to hire.

And by the way, I, I, I, I can definitely talk about what happens even after that. Cause there's a lot of messiness that needs to be done at that point as well. 

That's I think, a very natural progression right there is, let's say

[00:14:00] we've gone through this org design process. Now we have some sort of a plan, but now we are starting to operationalize it on a day to day basis.

So you have, you know, there is an applicant tracking system where you get all the. Information about what is being hired right now, uh, what is being actively being worked on. Uh, and then you have maybe your spreadsheet, which is your original approved hiring plan, Uh, and then you can educate a little bit more us on a little bit more on how it works all in Workday.

But how do you keep all of these things in sync, like If you wanna know, . 

It's, it's very challenging. Um, uh, quite, quite frankly. I dunno if it's ever in sync. Um, uh, but I, I'll share what we are doing, uh mm-hmm. To the best of our ability to, to, uh, be consistent with what's happening. So, one. Once we get approval on a plan, you know, there is a system of record of, of what those job requisitions

[00:15:00] are, and ultimately those job requisitions are connected from, uh, that are connected with finance and already approved.

And then they all have to get, uh, inputted into our ATS platform. Uh, now the challenge, uh, from operationalizing this is now that we have a bunch of approved plan. Um, approved head counts. We are not the ones that are hiring, right? We are now, uh, we have invite partners who are effectively our recruiting partners, who are amazing at what they do.

Uh, and then we have, uh, the managers that are ultimately accountable to, uh, those, uh, filling those positions. The challenge for us, uh, and you know, one way we solve this I'll talk about is that it's really hard to get full visibility. To, uh, all the things that are happening across all this very various head count, right?

Let's say you have, like, let's say there was 30 or 40 head count that's open. You know, uh, which

[00:16:00] ones actually has an invite? Partner is sometimes it's a simple question, Does this, do we have recruiting partner for this specific role? It's hard to get insights into sometimes. Uh, and then even if there is a recruiting partner assigned to an, to a role, how's it going?

It's a simple question like, are we, you know, most of the times when we're building our financial plan, we are, we're, uh, targeting a specific. Like our budget is tied to achieving an outcome by a higher date with a specific level. And so the question is, are we gonna hit that higher date? You know, are we on target to hit that hiring plan?

Because that's an important in, that's important output to achieve our business outcomes. And so, uh, there isn't a way to sort of, uh, at least, uh, today, uh, to easily stitch, stitch all these things together. And so, uh, we have. Uh, recurring meeting with various leaders where, uh, we kind of go through, uh, every headcount and, and ultimately, Uh, we're asking our people partner, uh, ing the invite side, and we're

[00:17:00] looking for central contact.

Keep in mind these roles can span multiple departments, right, That have very different, uh, recruiting processes. And ultimately we're saying, Hey, can you give us a red, yellow, green against, uh, these, these roles against the, the higher data? And, and ultimately what we're trying to ask ourselves as, as leaders is, are, do they.

Do our managers need help? Uh, are the right resources applied to the right roles? Do we have to make tight, tough calls? Um, and this is also the time where we said, Hey, we have a new request that is important to, to fill because once again, like, you know, hey, oh, you could be two months in, even one month into the plan, and you all of a sudden there's an oversight because that's just.

And we have to figure out, well, what do we do about this new headcount? And, you know, are we gonna remember we have all these preapproved? Do we like, replace an existing headcount, replace into something else? Um, so it's a very messy process. We're using meetings. Uh, there's a lot of manual processes to, to, uh, look

[00:18:00] across the ETS system.

And, and there isn't a single platform to ultimately bring it all together. Uh, but it, it is something that we. Done the best job. We, we, uh, can through our spreadsheet process and, you know, it works, right. Um, it's imperfect, but it, it works, but it clearly has a lot of room for improvement.

Great. So now we've, we've spent, we've spent a lot of time talking about the.

From a leader's perspective, uh, how you think about headcount planning, how do you communicate, uh, with your leadership? But if we, we also have HR leaders and talent leaders, recruiting leaders who, who will be listening from your perspective, how, what advice, Oh, what request do you have for them? What would you ask them that, how should they, what can they do to work better with.

CEOs and, uh, GMs of businesses

[00:19:00] because I, I think though they are a very critical part of this, right? I think HR is needed for the org design to give you feedback. Recruiting and talent is needed to give you feedback on whether they'll be able to meet the deadlines that you have set, and that connects it all together.

That if you cannot hire people on time, then you cannot hit your business goals. So what, what are the best ways to, what they can do to work with, um, GMs and, uh, CEOs and also department and functional leaders. 

Yeah, I mean, I think the most important thing I think is just having a culture of shared accountability.

Um, you know, this is we're all helping each other out to achieve. We all have the same shared outcomes. You know, we all wanna grow our business. We all wanna hit the various goals that are in front of us. Quite frankly, we won't be able to achieve any of those things without the amazing partners, uh, that, uh, that you mentioned.

But it takes effort, it takes, uh,

[00:20:00] commitment. So I would say for the, for the HR teams that are out there, you know, I, I think it's important to really learn about the business and learn about the challenges in the business and ultimately build a strong partnership with, uh, your. Your, uh, business counterparts, um, that are ultimately, uh, whether they're an EPD or, or in a, a functional, uh, domain, um, really try to understand what's going on and, and, uh, help them think through the, the people dynamics that, that they have to prepare for both near term and longer term.

That only can be achieved if you really understand the business outcomes and what's happening in the business. So try to go really deep into the mechanics of the business and the challenges that are happening there, so you can really build some empathy to why, uh, the head count is what it is and why the, there's a need to hire, uh, you know, certain head count with certain levels in certain times that empathy will be more, uh, realized once, uh, there's sort of

[00:21:00] clarity of thought to the plan 

it's, uh, the relationship at the end of day matters the more our, uh, you know, finance and HR business partners have deep, uh, understanding about the nature of our business, where we are, where we need to go, and the tradeoffs that we make, the, the, the, the stronger partnership will have. And, and I've had the great fortune to have some amazing, uh, business partners, uh, over my time here at Augusta, but even in other companies in the past and, and even the companies that I've built.

So, um, that's probably some advice that, that I would. 

That's great. So clothing, thoughts, The world has changed. The macroeconomic situation does not allow for you to spend in finite amount of money. Um, so now budgets are constrained, but the need for the business to grow at a certain multiple states, you have to build new features.

You have to hire people, you have to grow revenue, but you cannot, there's not a lot of money to spend. So, In this environment, how is there, is there a new

[00:22:00] way you're thinking about headcount management and headcount planning? Are there any best practices or again, parting advice on how should one adjust their strategy?

 I mean, I think everything's about prioritization and uh, prioritization of strategic. Where you need to focus. And ultimately it starts with strategy and knowing what to cut versus where, where to double down. And ultimately, once those decisions, strategic decisions are made, the people, uh, outcomes kind of come, uh, you know, drive from there. I will say at the end of the day, you know, we are also human.

I think everyone cares for their people and everyone cares for their teams. And so you have to really think about how to make those tough choices and balance

[00:23:00] between what we know versus where do we think the market's gonna be. But everything comes down with the trade off. Um, and I think that one thing we can all do in these moments, uh, given what's happening in the market, is just be very true through the trade off that you're making.

And really make sure you do that with open eyes. In all cases, everything's a trade off. So just be honest with yourself, be honest. Your cross-functional partners, um, be open and share and, uh, communicate. And I think, uh, we are, my experience of great teams is that open dialogue, that level of transparency is where the magic all happens.

That's great. Thank you so much. Appreciate it. 

Thank you for having me.

About the guests

Somrat Niyogi
GM, Embedded Payroll Product
Somrat is the Head of Business for Gusto Embedded Payroll, so he oversees a cross-functional org that includes finance, HR, go-to-market, and product teams. He previously oversaw Gusto’s strategic partnerships, technology ecosystem, distribution partnerships, and the developer ecosystem. Somrat also has founded two VC backed companies, both of which were later acquired.

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