🧠Overview / What This Guide Covers
Post-acquisition, headcount is usually the largest controllable cash lever in unlisted assets – but most models still treat it as a static annual line. This guide shows you how to turn hiring plans into a dynamic payroll-to-bank-balance view for unlisted infrastructure, so every new role, pay rise, and restructure is explicitly modeled in cash. It’s designed for CFOs, operators, and the financial adviser teams supporting them, as part of modern unlisted asset management. You’ll learn how to connect roles, salaries, start date,s and pay cycles into a single model, reconcile budget vs actuals, and use the output to make confident hiring and restructuring decisions that protect runway and covenants.
âś… Before You Begin
Before you build a hiring-to-cash model, make sure a few foundations are in place:
- A clean FTE list: role, grade, base salary, location, start/end dates, employment type (permanent, contractor, casual).
- Payroll configuration: pay frequencies, pay dates, taxes, on‑costs, benefits, bonuses, and historical actual payroll by pay run.
- A short-term cash forecast (ideally 13‑week) for the asset, or at a minimum, a working 90‑day cash plan.
- Clear hiring intent: which roles are replacement, BAU growth, or value‑creation hires tied to the asset’s investment thesis.
- Governance rules: who can approve role changes and what thresholds trigger re‑forecasting.
You should also be able to reconcile historical payroll cash to budget vs actuals reporting, so your model is grounded in reality rather than assumptions. Teams that already use Model Reef for unlisted asset management or broader budgeting and forecasting will find it easier to plug headcount into their existing workspace.
🛠️ Step-by-Step Implementation
Step 1 – Define or Prepare the Essential Foundation
Start by structuring a simple headcount model that mirrors how cash leaves the bank. Group your unlisted assets workforce into logical segments: operations vs corporate, fixed vs variable, and permanent vs contractor. For each segment, define cost drivers: base salary, typical bonus, on‑costs, overtime, or shift loadings. Align these to cost centres and general ledger codes so you can later reconcile to budget vs actuals and management reports. Decide your modeling grain (weekly or monthly) based on how tight cash is and how lumpy payroll runs are. For unlisted infrastructure, weekly is often worth the extra effort. Bring in the last 6-12 months of payroll cash as a baseline so you can test whether the model reproduces history. Only once the structure feels right should you start layering in future hiring plans.
Step 2 – Begin Executing the Core Part of the Process
Now convert your hiring plan into a cash timeline. For every role (existing and planned), capture start date, FTE fraction, base salary, likely bonus, and one‑off costs like recruitment fees, sign‑on bonuses, or relocation. Map each role to the relevant pay cycle and jurisdiction. Then calculate gross to net payroll and on‑costs (taxes, retirement contributions, benefits) on a pay‑run schedule. This transforms a static annual number into a live cash view that reflects timing and seasonality. Use this to compare “plan vs current state”: what happens if you delay a cohort of hires by one quarter, or switch some roles to contractors? Integrate these outputs into a dedicated headcount planning view, or into your broader headcount module, so hiring managers see the cash effect of each decision rather than just headcount counts.
Step 3 – Advance to the Next Stage of the Workflow
Next, connect payroll cash to your asset‑level bank balance. Feed the payroll schedule into your short‑term cash forecast, alongside receipts, non‑payroll operating expenses, interest, tax, and capex. For unlisted asset management, the goal is to see how people’s decisions impact covenant headroom, distributions, and reinvestment capacity week by week. Combine this with a real‑time revenue to receipts view so you can test “what if we add 20 FTE before revenues catch up?” vs “what if we wait until cash collections improve?” Use scenarios to model critical pivots in your unlisted assets strategy – for example, opening a new site or expanding a field team – and track the incremental drawdown on cash for each scenario.
Step 4 – Complete a Detailed or Sensitive Portion of the Task
Headcount changes are politically and emotionally charged, so your model needs to be robust, transparent, and defensible. Build a separate layer for restructuring scenarios: redundancies, redeployments, hiring freezes, and backfill delays. For each scenario, include one‑off severance, notice, and rehiring costs and their timing, plus the ongoing reduction in payroll. Link these scenarios to your working capital levers (e.g., collections improvements, vendor term resets) so boards can trade off payroll cuts against cash improvements elsewhere. If you already maintain a staffing cost model, reuse its drivers rather than starting from scratch. The objective is to show precisely how different combinations of hiring and restructuring play through to net cash, not to surprise stakeholders after the fact.
Step 5 – Finalise, Confirm, or Deploy the Output
Once the model works, operationalise it. Set up standard views for HR, operations, and the financial adviser/investor group: headcount versus plan, payroll cash versus budget vs actuals, and projected bank balances under different hiring scenarios. Bake this into your regular reporting rhythm and board packs so the conversation shifts from “Can we afford this?” to “Here’s what this choice does to cash, covenants, and exit valuations”. Use variance analysis to refine your assumptions every month – for example, actual start dates, bonuses, and attrition – so the model becomes more accurate over time. Finally, connect your headcount model to related levers like capex staffing and revenue‑generating hires, so all cash drivers are visible in one unified unlisted asset management view.
⚠️ Tips, Edge Cases & Gotchas
- Multi‑country payroll: watch for different pay cycles, holidays, and statutory charges when modeling global unlisted infrastructure portfolios.
- Variable pay: model bonuses, commissions, and overtime separately from base, and stress‑test their impact under upside and downside revenue scenarios.
- 53‑week years and off‑cycle runs: build explicit logic for “extra” pay runs and one‑off adjustments, or your bank balance forecast will drift.
- Contractors vs employees: decide whether you treat contractors as payroll or vendor cash to keep budget vs actuals clean.
- Data gaps: if historic payroll data is messy, reconcile from cash first, then refine as HR and payroll systems improve.
Use a simple working capital model to ensure headcount changes sit alongside other cash levers, rather than being analysed in isolation. This reduces surprises and improves trust in your unlisted assets’ cash forecasts.
đź“Ś Example / Quick Illustration
Imagine a newly acquired unlisted infrastructure asset that plans to add 25 operations FTEs in the first 6 months post‑acquisition. The CFO builds a payroll‑to‑cash model that maps each role’s start date, cost, and location to the fortnightly pay run. They discover that hiring all roles on the original timeline brings the asset within two weeks of covenant limits once delayed receipts are factored in. By staggering hiring over three quarters and aligning some roles to a later capex phase, they preserve three months of cash headroom while still delivering the operational ramp. The board can now clearly see the cash trade‑offs of hiring speed versus risk and approves a revised plan with confidence.
🚀 Next Steps
Your headcount and payroll cash model is one of the highest‑leverage components of post‑acquisition unlisted asset management. Once it’s live and reconciled, plug it into your wider 90‑day cash plan, working capital initiatives, and exit‑readiness work. Use it to frame board conversations around explicit cash trade‑offs instead of abstract headcount debates, and give your financial adviser and investor partners a transparent view of people‑driven cash risk.
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