HR department budgets for 2010 extended a trend of modest growth in HR funding, but with rates well below those observed as recently as 2006 and 2007. HR’s share of total operating costs, on the other hand, appears to have increased after two successive years of modest decline. This suggests that, on the whole, recent budget allocations in other divisions and departments have been at least as miserly as HR’s, if not a little more so.
Also, the median HR department staff ratio for 2010 was up modestly from a year earlier, to the same level recorded for 2008. Therefore, while many HR offices have experienced recent staffing cuts, those reductions apparently have been proportionally equivalent or slightly smaller than workforce cutbacks overall.
Key findings from this year’s survey:
The median budgeted change in human resource department expenditures was an increase of just 2.2% for 2010, barely higher than the figure recorded a year earlier (an increase of 1.8%) and well below levels logged as recently as 2006 and 2007 (7.2% for both years).
The median budgeted HR expenditure per employee among surveyed establishments was $1,311; just slightly higher than in 2009 ($1,277) and extending a recent trend of restraint in HR budget growth. (The median budgeted HR cost per worker was$1,252 for 2008.)
HR budgets for 2010 represented a median of 1.2% of responding organizations’ total operating costs, climbing back to levels observed in both 2006 and 2007.
The median human resources staff ratio was 1.1 staff members per 100 employees served in 2010, up modestly from 2009 (1.0 per 100) to the same level recorded for 2008.
HR staff ratios have edged slightly upward over the past half-decade or so, as the median HR staff ratio has reached 1.1 human resources staff for every 100 workers in four of the past six years. This small, recent increase might reflect the impact of a down economy and concomitant reductions-in-force. That is, human resource offices might have held on to more of their staffs than other divisions and departments because HR employees were retained to deal with the fallout from workforce cutbacks—outplacement, unemployment compensation, separation processing, exit interviews, and labor relations.
Year in and year out, HR departments are far more likely to acquire new responsibilities than to relinquish any duties. One-third of the surveyed human resource executives reported their departments acquired new duties without giving up any within the past year, while just 3% gave up something without taking on something else. Previous surveys have shown virtually identical patterns in HR's duty roster.
Outsourcing is firmly entrenched as a means of getting things done in HR, as seven out of 10 surveyed establishments have farmed out at least one core HR activity to consultants or vendors. HR departments appear especially willing to hand off counseling and services—employee assistance (32%), retirement planning (29%), outplacement (26%), and relocation (15%)—to outside providers.
BNA's HR Department Benchmarks and Analysis 2011 is based on a comprehensive survey of human resource departments conducted annually by BNA. This year's report reflects responses from 433 human resource professionals and executives representing a broad cross-section of U.S. employers. The vast majority of respondents head up the human resources function at their organization, division, or facility.
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