The HR staffing ratio – which compares the number of HR staff members to the number of employees they serve – is often used as a benchmark to determine HR”s capabilities and assess the need for outsourcing.
According to a Bloomberg/BNA survey-based report entitled HR Department Benchmarks and Analysis 2015, the median ratio of HR staff to all employees in 2015 is 1.1 per 100 employee, down from 2014’s 1.3 per 100 employee. The report points to workforce growth as the reason to the decline.
While a 1:100 ratio is often recommended, it should not be interpreted as the ideal for every organization. A number of exceptions, modifiers, and caveats apply.
First, there tends to be a lower ratio for larger organizations, which are able to afford the automation and outsourcing that make an HR department more efficient with fewer employees. Smaller organizations, on the other hand, may require more than 1 HR employee per 100 employees in order to serve all functions. Of course, any organization with fewer than 100 employees and one full-time HR employee will see a skewed ratio.
Industry also affects the median ratio. In healthcare, non-profits, and the public sector, there are often comparatively fewer HR staff members.
As the outsourcing of HR functions becomes more widespread, maintaining a 1:100 ratio may be unnecessary for some organizations. The Bloomberg/BNA report reveals that two-thirds of surveyed employers outsource some facet of human resources to consultants or vendors outside of the organization.
Varying levels of HR automation may also have a profound effect on this ratio. If, for instance, employees are able to access a wide variety of information via online human resource self-service portals, they may become more self-sufficient and require fewer HR employees to tend to their needs.
On the other hand, more needy employees – including those less comfortable with technology, or large groups of new hires in need of training – may require more than one HR staffer per 100.
The depth and breadth of an HR department”s skills are also factors, as is the ability of senior staff to effectively delegate to junior members. A disproportionate number of senior or junior staff members will also alter the staffing needs of the department.
Finally, whether or not it is made explicit, each organization’s human resources department will fill a role appropriate to its culture. If HR’s function is primarily administrative, it will require significantly less staff than a department responsible for the development and implementation of strategic human resource plans as well as day-to-day administrative tasks.
In short, a simple analysis of the HR staffing ratio in your organization alone will be insufficient to support staffing or outsourcing requests. An HR audit, however, can deliver a complete picture of the capabilities and needs of an organization”s human resource department.
Due to the complex nature of these issues and an overwhelming interest in the HR staffing ratio among Astron Solutions’ internet community, we are currently considering undertaking an HR staffing ratio survey that better positions these data in their cultural contexts.