Benchmarks: How Does Your Human Resources Department Stack Up?

One of the big pushes occurring across organizations of all shapes and sizes is increasing the utilization of data and analytics to measure, benchmark, and hopefully improve results in areas that have a meaningful impact on organizational performance and outcomes. 

It goes without saying that human resources management is one of those areas. And we’ve got a gold mine of pertinent data in HR Department Benchmarks and Analysis 2017.

The report has a venerated 39-year track record of supplying details on HR staffing, budgets, priorities, and other important benchmarks. This year’s edition—based on responses from nearly 700 HR professionals—provides plenty of fresh insights on measures that can drive organizational success. 

Show HR the Money

Our annual report provides several metrics related to HR budgets and expenditures. They include the following:

• The median increase in HR funding came in at 3.7 percent in 2017. This bump in HR budgets is modest compared with figures from prior years but resembles the economic recovery itself, which has been characterized by slow but steady expansion and very low inflation.

• When expressed as a per capita figure, the median amount allotted to HR departments in 2017 looks rather anemic at $1,087 per employee, down from $1,440 in 2016. A possible explanation is that total HR spending has grown modestly, but an expansion of the employee population has driven down the per capita cost of the department’s programs and activities.

• The median per capita budget figure varies widely across organizations of different sizes, ranging from $594 per employee among the largest organizations (those with 2,500 or more workers) to $2,966 per employee among small establishments (those with fewer than 250 workers).

• This year’s budget figures show HR salaries pushing higher. The median hike in HR's staff salary budget is 4.2 percent in 2017, up slightly from 4.1 percent in both 2015 and 2016, and more than a percentage point higher than the figures from 2012 to 2014.

Analytics Within HR

The 2017 report also includes a closer examination of analytics within HR departments. The practice of tracking HR metrics and analyzing data has become widespread, with more than nine out of 10 HR departments indicating that they employ data analytics of some kind. 

The data analytics most often used and tracked "are those that affect the bottom line," according to Molly Huie, manager of survey reports for Bloomberg BNA.

Despite the widespread usage, there isn't any single data analysis method or tool that has taken hold across a majority of HR departments, the survey found. Respondents cited dashboards, data visualization software, and analysis of "central tendency"—such as mean and median statistics—as some of the most common. 

While attitudes about HR metrics and analytics appear generally positive, only one-third of the surveyed HR departments agree that their use of metrics and analytics is adequate, and just 14 percent of those surveyed said they have no barriers to the use of HR metrics and analytics. 

HR departments that actively analyze the data at their disposal tend to report better business outcomes than those reported by HR respondents whose use of metrics and analytics is less than adequate, said Huie. 

Performance Management, HR Policies

The surveyed HR professionals tend to have positive impressions of the performance management systems in place at their organizations, but 80 percent indicated making at least some program revisions in the past three years. 

Nevertheless, Huie said certain principles remain constant in the purposes served by the programs, which range from clarifying expectations and documenting performance to identifying professional development needs and gathering information for decisions on compensation and promotions. 

Annual performance reviews remain the norm for existing employees. If employees have become subject to performance improvement plans, however, assessments tend to be done "as needed" or on a quarterly basis. 

The research also reveals that the uncertain nature of legislative efforts is affecting company policy as employers scramble to remain compliant with shifting requirements. For example, efforts to repeal and replace Obamacare are rattling employers, with a majority of HR departments reporting they have made policy revisions related to the Affordable Care Act. 

"This is the first year we have asked about the impact of legislation on HR policies, and we found that eight out of 10 organizations have changed or revised policies based on recent legislation," Huie said.

HR Department Benchmarks and Analysis 2017 can be ordered here for $1,295. It is also one of several reports included with a subscription to Bloomberg BNA’s HR Decision Support Network. Start your free trial today.