BENCHMARKS REPORT SUPPLIES VITAL HR STATISTICS

HR departments have hit record staffing levels, with 1.4 HR employees for every 100 workers served, according to the latest HR Department Benchmarks and Analysis™ report from Bloomberg BNA. 

Reaching a new high-water mark for HR staffing is particularly impressive given the fact that our research on the human resources function stretches back nearly 40 years. 

This year’s report is based on survey responses from 559 HR pros, and it covers various subjects beyond staffing, such as HR budgets, departmental involvement and influence in the larger organization, HR priorities, metrics and strategy, HR outsourcing and a new chapter on performance management. 

Staff Ratios

When comparing the size of the HR staff with the number of employees served by the department, this year’s ratio of 1.4 full-time equivalent HR employees per 100 workers tops the previous peak of 1.3 per 100 employees in 2013 and 2014. 

As a general rule, economies of scale allow HR departments to spread their services across larger employee populations without growing proportionately in size, resulting in lower staffing ratios at big companies. For example, the median ratio of HR staff to employees served is 0.83 per 100 workers at organizations with 1,000-2,499 employees, and it drops to 0.65 per 100 workers at organizations with 2,500 or more employees. 

The report also shows that three in 10 HR offices gained staff in 2016—the highest figure in nine years—while only 11 percent experienced cuts in personnel. 

HR Budgets

Expanding HR staffs don’t necessarily translate to a flood of additional money, as evidenced by the fact that the median funding increase this year is 4.2 percent, the same as the year before. Nevertheless, these HR budget hikes are twice as high as levels recorded in the wake of the Great Recession, when median increases hovered around 2 percent per year. 

Breaking down HR budgets on a per capita basis, the median HR department expenditure is $1,440 per employee. This is slightly higher than the median budgeted per capita expenditure of $1,375 per employee in 2015, but similar to levels recorded in 2014 and 2013 ($1,465 and $1,424, respectively). 

Involvement and Influence

Regarding HR’s role in the larger organization, the survey suggests a meaningful level of involvement and influence. 

Half of the survey respondents said the top HR official (e.g., vice president, director of human resources) reports directly to the company's chief executive, and another 20 percent indicated that the head of HR answers to the chief operating officer or a senior vice president. 

In addition, a majority of respondents characterized the role of their HR department as either fully involved (cited by 30 percent) or substantially involved (40 percent) in key business decisions. In contrast, few respondents characterized their departments' strategic involvement and influence as "minimal" (7 percent) or "nonexistent" (1 percent). 

The higher up the respondents are in the HR department, the more likely they are to report higher levels of departmental involvement—for instance, vice presidents of HR typically have a more positive view of their departments' corporate influence than HR directors or managers.

The full HR Department Benchmarks and Analysis™ report can be purchased for $1,295 here. It’s also one of several reports that comes as part of a subscription to the HR Decision Support Network. Start your free trial today.