Growth–Payroll Mismatch

Composite / composite / 3 to 6 months

What it detects

Payroll is growing faster than revenue while hiring capacity is already constrained.

When it fires

Payroll Overhang (S14) + Hiring Capacity Constrained (S30) + `revenueSlower` (revenue growth < payroll growth)

Why it matters

You hired ahead of revenue and now payroll is consuming [redacted]% of revenue. You need more revenue to justify the headcount, but you don't have the cash buffer to safely add the sales capacity to go get it.

Severity levels

• HIGH

Thresholds

Exact thresholds, formulas, and severity bands are omitted from this public view. The full methodology, with every figure, is available in the authenticated app.

How it connects

Each new hire dilutes revenue per FTE ([redacted]/mo) while consuming cash buffer. A hiring freeze would extend runway by ~[redacted] months.

Why these together

Payroll Overhang says labor already consumes too much of revenue; Hiring Capacity Constrained says the cash buffer cannot safely fund more capacity. When both are active and payroll is growing faster than revenue, the company is adding cost faster than it adds revenue while lacking the buffer to add the sales capacity that would fix it. The composite fires on that conjunction and introduces no threshold of its own.

Built from these checks

• Payroll Overhang: the labor-intensity read. It establishes that payroll already takes too large a share of revenue.
• Hiring Capacity Constrained: the cash-buffer read. It establishes that the company cannot safely add headcount to grow out of the overhang; the payroll-versus-revenue growth comparison comes from the company's own payroll trajectory.

Sources

• SPI Research / Deltek via Payroll Overhang
• Y Combinator via Hiring Capacity Constrained
• Corporate Finance Institute via Hiring Capacity Constrained
• Traksource via Hiring Capacity Constrained

SEE IT ON REAL NUMBERS

The exact thresholds, the formula, and your own figures are in the authenticated app. See it against a real, simulated dataset for Integra Executive Services, our public demo company, or connect your own QuickBooks Online account.