Malcolm Whyte, SPHR, Executive Vice President/Principal
On October 21st, Bloomberg BNA released its annual 2015 HR Department Benchmarks and Analysis Report. The Report provides key metrics and findings which are derived from a survey of almost 350 HR executives including a broad cross-section of US employers. Not surprising to many HR managers, a key finding indicates that the HR staff ratio has declined to 1.1 HR staff for every 100 workers on average. This is down from 1.3 HR staff for every 100 employees in 2013 and 2014.
Economic growth in the U.S. has led to the expansion of employee ranks in many organizations. “This means that HR departments are being tasked with supporting more employees, potentially putting a strain on organizational resources,” said Tony Harris, Managing Editor of HR publications at Bloomberg BNA. According to another global consulting firm, World at Work, companies with less than 250 employees spend an average of $3,372 per year per employee on the HR function. This figure is high but not unexpected given the increasingly complex compliance environment HR practitioners face.
One way small to mid-sized companies can control HR overhead is to outsource one or more HR functions. According to the Benchmark Report, 65% of companies outsource at least one of their HR functions. This practice dramatically increases with smaller companies that cannot justify a dedicated HR team, but must stay on top of compliance and day-to-day HR transactions. Many smaller firms also use HR outsourcing as a way to organize systems and technology.
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