The Challenge
Determining the financial impact of hiring a new revenue-generating employee is complex. Beyond direct costs and revenue, there are indirect effects—such as enabling other team members to focus on higher-value activities—that can significantly influence the business case. Traditional modeling approaches are time-consuming, difficult to scale, and often fail to capture the full range of outcomes based on changing assumptions.
The Solution
A custom-built Python tool, integrated with Excel for user-friendly input and output, was developed to model the full financial impact of adding a new team member. The model captures both direct and indirect revenue, cost of employment, and net income impact based on user-defined assumptions.
Key features include:
- Automated modeling based on historical productivity data and adjustable assumptions
- Direct and indirect impact calculations, including changes in team productivity
- Dynamic scenario analysis to test how different assumptions affect outcomes
- Fast output generation, allowing results to be delivered in minutes, not hours
- Sensitivity tables to visualize risk and opportunity across a range of inputs
The Benefits
- Faster decision-making – complex staffing scenarios modeled in minutes
- More informed hiring decisions – holistic view of financial and operational impact
- Flexible and user-driven – easily update assumptions as new data becomes available
- Scalable – can be reused across teams and roles with minimal effort
- Supports leadership alignment – delivers consistent, data-driven proposals for approval processes
Real Impact
The model was first used to evaluate a proposed hire for a team of professionals who generated revenue through client-facing activities. By quantifying both the direct revenue of the new hire and the productivity unlocked for other team members, leadership was able to make a confident, data-backed hiring decision.
Holcomb Reporting Solutions 