Compensation Force: How Big is Your HR Staff? How Big SHOULD it Be?

The Institute for Corporate Productivity (i4cp) has released a set of findings from recent research on the future of Human Resources which sheds light on the important and frequently asked question: How many HR employees should a company have?

By analyzing data from over 850 organizations,i4cp has come up with an interactive model which determines the normative ratio of HR FTEs to number of workers, based on a set of variables that includes broad industry gsector, organization size, geographic structure and performance (the latter based on self-reported responses to questions about revenue growth, market share, profitability and customer satisfaction).

As an example, I put together the following table, which looks at HR staff ratios by organization size for high versus low performing companies, directly from their interactive chart:

Just a quick glance through and you see some interesting patterns emerge. The FTEs per 100 employees gets smaller as the organization size grows and efficiencies are gained. The FTEs per 100 employees are initially higher for high performers than for low performers (suggesting high performers invest early in HR staff, perhaps), but that pattern flips beyond an organization size of 10,000 (indicating, maybe, that high performers take better advantage of the efficiencies of scale?).

Click through to i4cp's interactive chart and try it out yourself. It's a cool tool, aimed at a significant question, with some very interesting data behind it!