Your 2026 Hiring Plan Could Bankrupt You (Run These Numbers First)
If you're going to hire anyone this year, there are four numbers you need to see first. Because every January, I see the same thing happen. Founders come in hot with a hiring plan. Big goals. Big energy. Big “this is the year we finally build the team.” Listen, I love ambition. But I’ve also seen hiring decisions quietly wreck otherwise healthy businesses. Not because hiring is bad, but because most people skip the part where they actually run the numbers.
So before you add someone to payroll in 2026, there are a few things I want you to look at. Like, really look at. Actual numbers. Because “I can afford the salary” and “I can afford the hire” are not the same thing. (Rude, honestly.)
Before we dive in, here's the quick skim version for the founders reading this between meetings: If you don’t know your fully loaded cost per hire, revenue per employee, labor cost percentage, and cash runway after the hire, you’re hiring blind.
Okay… now let’s break those down.
Fully Loaded Cost per Hire
This is where most owners get it wrong. Most people look at their salary and stop there. CFOs don’t. A fully loaded hire includes:
Base salary
Payroll taxes (usually 7–10%)
Benefits or stipends
Software + tools
Training and onboarding time
Management time (the sneakiest cost of all)
Here's a great rule of thumb when looking at this number: Your real cost is typically 1.25–1.4× the salary. So a $70,000 hire? That’s often $90,000–$98,000 per year when everything is accounted for.
Hiring trap: “I can afford the salary” ≠ “I can afford the hire.”
Revenue per Employee
This tells you whether your team is scaling profitably… or just getting bigger by showing you the average revenue per employee (really tricky name, huh?). Simply take your revenue for the year and divide it by the number of full-time employees. With this number, you want to look at 1) Revenue per employee across the whole business and 2) Revenue per employee by role, if you can.
If revenue per employee is dropping while headcount is rising, that’s a signal, not a fluke. It's a sign that you may need to tighten or revisit your SOPs. Or maybe that your employees' job descriptions aren't clearly defined, so their time isn't well spent. Moral of the story here is, a bigger team isn't always an efficient team.
Hiring trap: Growing headcount faster than revenue efficiency and calling it “growth.”
Labor Cost Percentage
Labor Cost Percentage tells you how much your company spends on your employees. Almost like your fully loaded cost per hire, but for the whole company and with actual numbers, not just projections. This is one of the earliest warning signs that hiring is getting out of control. For most service-based businesses and agencies, here's what your labor cost percentage means:
30–40% = healthy
40–50% = caution zone
50%+ = profit erosion zone
Once labor creeps too high, everything else gets squeezed… owner pay, cash flow, flexibility, sleep. If you're in the caution or profit erosion zone, take a step back before making that next hire and take a look at what systems you need to improve first.
Hiring trap: Adding team members while margins quietly shrink in the background.
Cash Runway After the Hire
Profit on paper won’t save you if your cash runs out. Before hiring, ask yourself: “If I make this hire and nothing goes perfectly, how long can we sustain it?” (because let's be real, does anything in life or business ever go truly perfectly?). The minimum CFO standard is 3–6 months of cash runway after the hire. And this is based on what’s actually in the bank, not projected revenue. This is a safety net you want to have in place to make sure things continue running smoothly, and you don't find yourself in a seriously sticky situation.
Hiring trap: Hiring on future promises instead of current cash reality. (Cool cool cool… until it’s not.)
Most hiring mistakes aren’t emotional
At the end of the day, here’s the thing I want you to hear: Most hiring mistakes aren’t emotional… they’re mathematical.
The goal of planning isn’t to slow you down. It’s to make sure growth doesn’t come at the expense of profit, stability, or your sanity. This is exactly the kind of work we do inside our CFO services. We run custom hiring scenarios that show you when you can hire, who you can hire, and what it does to your cash flow, margins, and runway. That way you’re not left guessing. You’re deciding with clarity.
Here to saving you from expensive hiring oopsies 🥂 If you’re thinking about hiring in 2026 and want to make sure it doesn’t turn into an expensive mistake, reach out to us today and let’s talk through your plan. We’ll help you run the numbers before you commit.
