So SHRM put out a new survey called the SHRM Human Capital Benchmarking survey. Apparently they are going to do this every year. The metrics that come out of this should be pretty good as they certainly have enough member organizations to pull from. For this year’s survey, they pulled 1500 company responses. (same document says 1000 organizations and 702 as well) At any rate, the study is worth mentioning even though I'm not a fan of SHRM.
Page 18 outlines HR expenses by industry. I would be really interested in HR expenses by company size, but it’s not published in the executive summary. While I’m sure their data is accurate to the respondents surveyed, there are a few areas I found curious:
- Median Government Expense per FTE: $992. Government organizations I’ve seen seem to have a lot of waste when it comes to bureaucracy and administrative expense. However, it’s possible that they are not overstaffed as I would have first assumed. Maybe they are not doing the work at all, which would explain the low figure.
- Median Service (non-profit) Expense per FTE: $1935. This seems extremely high. Many people I know who work in service do so at a salary and benefit premium. However, HR expense does not include benefit expenses, but the not for profits tend also to lack the training and development support associated with HR expense. This very high figure is curious to me.
The next interesting area was the HR to employee ratio. Generally we think that you get roughly 100 employees per HR person. How an HR person is defined is a mystery, but this survey seems to indicate generalists, specialists and analysts, and management. It excludes payroll. Other than one anomaly, I thought the ratios were right on target. Organizations with fewer than 100 employees had a median HR staff of 2.7 employees. Perhaps they have a couple of people doing recruiting and benefits and ER, but my guess is that recruiting in most of these organizations is outsourced along with benefits. As we go up the ladder to higher employee counts, we eventually get to about 0.4 HR employees per FTE. So for a 10,000 employee company, you have 40 HR staff. At 5000, you have about 25 HR staff.
So here’s my critique for the day: The reason I’m saying this is on target is because in my experience, this is actually what I see in the HR workforce. I’d like to say that this ratio is preposterous and organizations really don’t function at good capacity with these staffing rations. Only the most efficient and well set-up organizations can perform well here. In order to do so, you need well centralized HR, call centers, and relatively few deployed generalists.