HR departments experiencing growth

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For the second year in a row, HR departments have seen their departments grow, as the median ratio of human resources staff to total employee headcount reached its all-time high of 1.4 full-time equivalent HR employees for every 100 workers served by the department.

The most common specialty growth area is benefits, the report finds, followed by employment/recruitment. The data also show that HR specialists commonly juggle multiple areas of responsibility, especially at smaller organizations.

Departmental growth has seen six steady years of upward movement, according to the recently released Bloomberg BNA’s HR Department Benchmarks and Analysis 2017 report.

HR specialization is at its peak this year, with 73% of HR departments reporting at least one specialist on staff, according to the annual survey of nearly 700 HR professionals. As expected, large organizations are more likely than their smaller counterparts to have HR specialists on staff.

Additional research from Mercer finds that HR functions are almost two times more likely to increase spending than decrease it (in the year ahead), and that more than half (56%) of senior HR executives plan to maintain spending, which is good news for organizations that have been trying to “do more with less” for the past few years. The 12% of HR teams that are actively recruiting say their primary goals are recruiting COEs (65%) and HR business partners (49%). This is also true for those planning to recruit in the next 18 months. The biggest area where employers are looking to decrease is HR administration (HR service center) (76%).

“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.”

The median HR funding increase this year is 3.7%, down from 4.2% in both 2015 and 2016, according to Bloomberg BNS. Budgeted HR expenditures dipped to a 10-year low when expressed as a per capita dollar amount. Across all employers, the median amount allotted to HR departments is $1,087 per employee in 2017, down from $1,440 in 2016.

“Annual adjustments in HR funding have settled into a pattern of conservative growth in the wake of the Great Recession,” the Bloomberg BNA report authors write. “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.”

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