Human resource departments dealing with the increasing complexity in today’s workplace received some good news this year.
The median ratio of HR staffers per employee hit a record high of 1.4 full-time HR employees for every 100 workers. That's according to BloombergBNA’s40th Annual HR Benchmarks and Analysis report. That makes two years in a row that this ratio reached a record high and there is no shortage of work to keep HR busy.
The report finds that 80% of HR departments have reworked their policies due to recent laws, with most (62%) saying the revisions were tied to changes to the Affordable Care Act , and 48% citing overtime rules. Nearly 66% of HR departments have their own budgets with the biggest allocations going to benefits, employment and recruiting, training and development, and compensation.
The report also highlights a huge differential in how much companies spend based on employee headcount. It costs HR $2,966 per employee at firms with fewer than 250 workers. Meanwhile, same metric is just $594 spent per employee at firms with at least 2,500 workers. Nearly 700 human resource professionals working for a wide range of U.S. employers were surveyed.
Another record number for human resources is the 73% of departments with at least one specialist on board, with large companies likely to staff a specialist compared to their smaller counterparts. Human resources is also twice as likely to spend more, rather than decrease spending, in the coming year. Meanwhile, 56% of senior HR executives plan to keep spending steady, separate research from Mercer finds (PDF).
“HR is investing in the business partner role,” says Denise LaForte, North American leader of HR transformation practice at Mercer. “As all these companies reorganize, and the nature of work changes globally, HR needs to be there figuring it out.”
Median HR funding is 3.7% this year, which is lower than the 4.2% for both last year and 2015, the Bloombergsurvey finds. HR expenditures (budgeted) hit a 10-year low, dropping to a median $1,087 this year from $1,440 last year per employee.
“Annual adjustments in HR funding have settled into a pattern of conservative growth in the wake of the Great Recession,” the survey’s authors note. “These modest HR budget increases are not unlike the economic recovery itself, which has been characterized by slow but steady expansion and very low inflation.”