Our discussion to this point has shown that a variety of factors impact HR staffing size: service level, offerings, degree of automation, organizational size, industry, and phase of development. Overall, the results have indicated that there is not a deterministic formula that determines the appropriate size of the human resource function in a typical organization. At best, we have found that based on the factors there are certain “rules of thumb” or anticipated ranges. In order to pull it all together and demonstrate the findings using real data, we will analyze a sample of 400 organizations collect by HCS that vary by each of the major factors.
In order to highlight some of the data, two scatter plots are included. Figure 1 captures the distribution of the respondents by size and staffing ratio. The HR Ratio varies considerably in smaller organizations, but as the organization grows in size, there is more compaction in the results. The largest respondents have HR Ratios between .4 and 1.0. Figure 2 demonstrates the comprehensiveness and quality of services of the respondents based on a scale of one to ten with ten being the most comprehensive and highest employee satisfaction with services. The basic trend is that there is more satisfaction with higher HR Ratios. There are a few exceptions in the .4 to .6 range, but these are large employers with well-developed offerings.
Based on this sample of organizations, average differentials in the HR Ratio were calculated. The table below summarizes the differences that should be applied to the HR Ratio taking into account each factor. For example, a private, automated, high service, strategic organization would have a HR Ratio 22 points smaller than a public, non-automated, low service, and transactional organization. Consequently, assuming an average HR Ratio of 1.1 for all organizations, the change in characteristics would result in an average HR Ratio of .858 based on the results of this sample.
|Private vs. Public||-.08|
|Automated vs. Not Automated||-.15|
|Large vs. Small||-.05|
|Low Service vs. High Service||-.04|
|Transactional vs. Strategic||-.03|
Obviously, there are interactive effects that this simple approach does not account for such as if I am large I am more likely to automate, strategic organizations tend to have moved toward automation, and low services organizations tend to be smaller. These need to be addressed, but will necessitate a larger sample. Nevertheless, given these results, several key findings should be kept in mind when determining the right staffing size compared to FTEs:
- Multiple factors impact the “right size” of current HR staff
- Different factors have different impacts on the needed staff
- Automation is one of the biggest factors impacting staff size in current practice
- Reducing HR staff without the necessary tools and processes will impact service