That sounds like a pretty standard and rational process. I've seen headcount handled other, less rational ways. In any environment with constrained budget (mos

That sounds like a pretty standard and rational process. I've seen headcount handled other, less rational ways. In any environment with constrained budget (most environments), Eng managers will not have carte blanche to hire. Each person represents a long-term expense for the business and every team always wants more people. As you roll up the reporting chain, the first person with both budget responsibility and output responsibility is usually at the VP or C-level. That person is responsible for weighing the requests of Engineering / Product / Sales / Support against each other and aligning these bets with the broader strategic priorities and available resources. Once the CEO allocates budget, why not just hand it off to the teams? When budget is only determined 1x/yr then team sizes and charters are locked for very long periods of time. A truly agile company holds its budget at a higher level and shifts whenever business needs change, maybe many times per year. Maybe everyone thought that Team A needed to hire 3 more people, but then a major customer arrived which required shifting one of those open positions to Team B. Or maybe the opportunity shrunk, and the company is best served by hiring nobody and shifting that budget to a short-term outside vendor as pay-for-services. If the company is public, then it's more complicated. Are these operational costs or capitalized costs? You probably don't care, but Wall Street definitely does. Weighing these tradeoffs is the job of the VP / CTO / CEO. Underinvestment in support + operations is either a marker of a short-sighted leader, or it's a leader explicitly making a "bad" decision to focus investment elsewhere with a higher ROI.