Arlington, Va., (November 20, 2012)
- Human resource department staffs and budgets showed some signs of
recovery in 2012, although those gains probably did not compensate for cuts and
freezes experienced during the recession and its aftermath, according to the
latest annual survey of HR departments conducted by Bloomberg BNA. Following two
straight years in which HR department staff cuts were more common than
increases, the pattern reversed in 2012; reported staffing gains in human
resources outpaced reductions-in-force by 10 percentage points this year.
Budgeted adjustments in HR funding for 2012 also reflect some improvement from
the last few years, but are still well short of levels observed before the Great
Key findings from this year's survey:
department staff levels have seen some reversal of fortune in 2012.
Twenty-one percent of surveyed human resource offices gained staff positions
between 2011 and 2012, while only 11 percent experienced cuts. Two years ago,
nearly a third of respondents (32 percent) reported reductions-in-force within
human resources, with just 13 percent indicating gains in HR staff.
Human resource staff ratios appear to have stabilized at slightly
higher levels than those observed from the mid-1990s through the early
2000s. For 10 straight years, the median ratio of HR staff to total
headcount has been either 1.0 or 1.1 human resource employees for every 100
workers served by the HR department. The median ratio bounced between 0.9 and
1.0 HR staff per 100 employees from 1996 to 2004.
for 2012 suggest some easing of the fiscal austerity observed over the last
several years. Roughly one-fifth of the responding employers (22
percent) reported reductions in human resource funding for 2012, down from 37
percent of respondents to last year's survey. Moreover, only 11 percent
indicated HR budget cuts of more than 5 percent, versus 24 percent of those
surveyed about a year earlier.
Budgeted changes in HR outlays
also reflect modest improvement in HR departments' fiscal
situations. The median budgeted change in human resource department
budgets for 2012 is an increase of 3.2 percent, up from both 2011 (2.0 percent)
and 2010 (2.2 percent). However, reported budget adjustments are still a far cry
from those observed before the recession. For both 2006 and 2007, the median
budgeted change in HR department funding was an increase of more than 7
As in years past, HR departments were far more likely to
take on new functions in 2012 than to give up any duties. Among all
responding HR executives, 40 percent reported some change in
their departments' responsibilities within the past 12 months.
Only 6 percent relinquished any activities, while more than a
third (34 percent) acquired at least one new initiative or program.
Quantitative evaluation and formal planning have gained a solid
foothold in most HR offices. For instance, virtually all surveyed HR
departments (99 percent) conduct formal measurement and planning of their
compensation and benefits programs, including 71 percent that
regularly undertake quantitative evaluations of their wage, salary, and
Health care cost containment sits atop most
HR department agendas.
Stemming the tide of rising health
benefit costs ranks as ''extremely important''
(42 percent) or ''very
important'' (39 percent) for more than four out of five surveyed HR
Outsourcing is a well-established aspect of doing
business in HR. Roughly seven in 10 human resource offices (69 percent)
outsourced at least one activity or program in 2012, little changed from reports
for the past several years. Employee assistance plans and
retirement planning programs remain common targets for outsourcing.
Quality and track record are primary determinants of vendor selection
for outsourcing. Existing relationships or the low bid do not often
secure the inside track for contractors and vendors, according to surveyed HR
From the survey report's executive summary:
The challenges facing human resource professionals and their departments are in
ample evidence throughout the survey findings. Year in and out, HR departments
are far more likely to take on new duties than to relinquish any programs or
activities. Human resources has gained greater influence on strategic planning
and corporate decisions, but likely greater scrutiny and accountability in the
bargain. And while human resource staff levels relative to employment have
ticked slightly upward over the past decade, it seems a safe bet that increases
in HR's responsibilities have been as great or greater. Human resource budget
adjustments for 2012 reflect some improvement from the last several years, but
are still well short of levels observed before the recession.
HR Department Benchmarks and Analysis 2012-2013 is based
on a comprehensive survey of human resource departments conducted annually by
Bloomberg BNA. This year's report reflects responses from 571 human resource
professionals and executives representing a broad cross-section of U.S.
employers. The vast majority of respondents head up the human resources function
at their organization, division, or facility.
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