When do I increase my HR staff?

Golfistherapy

I've often heard that the "appropriate" staff to employee ratio for HR professionals is 1 to 100. Is there any research supporting or disproving this? When should I add to my staff? Is number of employees the only indicator?

Cxjo

I have also always heard this ratio thrown out there. I recall a seminar I attended where the speaker opened his presentation with the question of "what is the ratio?" Everyone in the room pretty much said 1:100 and he then went into explaining that this is one of those figures that has become accepted as fact but is going to be different from organization to organization. He was unsure how that ratio came to be the one always stated but he advised us that if we were going to use that as the "argument" when approaching our CEOs about the need to increase HR staff, we will be hard-pressed to find real supporting documentation on it. (this was about 5 years ago or so... I can't recall many of the particulars but this point has stuck with me)

I have worked at organizations with ratios of 1:50; 1:100, and 1:150 (two companies with this ratio). At each of these organizations the ratio depended upon so many factors.

Company A with the 1:150 ratio worked perfectly; there were two of us in HR for 300 employees. Company B with the 1:150 ratio was horrific: there were 26 in HR and 4000 employees. At Company B we were so overwhelmed because even with more of us, the processes were more cumbersome, the culture was complex, and the expectations of the employees were the same but our ability to provide adeqaute service was stretched to the limits. The company was much more detailed than Company A, with many more types of departments and focuses, and thus there were more areas needing the attention of HR if we were to truly be effective within the organization.

I think in order to determine when you need to increase your HR staff you have to do a time study of your processes and functions; get customer feedback to see what is NOT getting done because you are spread too thin, and determine how this will benefit the organization by increasing HR staff.

At one stage (at the 1:150 ratio'ed Company A) my boss the CEO asked me if I needed to add another HR staff member. When I told him "no, not necessary" he was shocked(and pleased!!). My predecessor, it appears, had been after him for YEARS to add a 3rd HR staffer, and her arguments had been all based on the "ratio" she had heard. I had been in the job about 3 months, was able to ascertain at that point that we did not need to expand HR, and advocated instead for adding to our operations side... where I had determined it WAS needed.

Good luck!

Gillian

The Bureau of National Affairs (BNA) and SHRM produce research on this topic. The report is one of the SHRM Bulletins to Management. I think that this is published annually, although I can't find the most recent. The ratio that you describe has not changed for umpteen years. The main difference occurs because some industries run lean, in terms of staff and others tend to have a higher ratio. The other main factor that influences staff count is what a particular HR deparment does. Some HR departments have additional responsibilies which affect the number of staff. I think the trigger which defines when the staff increases is the amount of work that is done and are you drowning in it. At that point, you might want to increase although it would be a good idea to first see what you are doing that is redundant or change things so that they are done more efficiently. Demonstrating that this has been done will probably increase the chances of increasing staff.

Don D

Rather than a magical formula related to the employee numbers, in my estimation it should depend more on such things as (1) Is there a requirement for someone to administer a union contract?, (2) Is the benefits package administered in this department, and what degree of hand-holding exists with that?, (3 Are reception and other ancillary functions such as supply ordering handled by HR?, (4) Is 401k administration assigned to HR?, (5) Does HR have interfacing payroll responsibilities?, (6) What is the volume of, say, hourly turnover requiring constant hiring activity by HR?, (7) Does the department handle its own COBRA or is it outsourced?, There are quite a few variables to be considered in adequately staffing an HR department. Its never as simple as the beancounters and budgeters want to make it sound. Sadly, its often the leanest department of all and at the same time, the single point where most of the liability for the company is invited or held at bay.

Pork

Dandy Don: Has again given the right answer! HR funtions in place and/or planned for implimentation is the way to answer your question and concerns. Etc., if your medical benefits system is administered outside of your company except for enrollment, then a current employee (about 10% of one's time) can do the enrollment process. Are the claims handle out side of the company/then a current employee (about 50% of one's time) can do the claims process and interface on behalf of the employee. Bring all of this into the company then you will need to budget and obligate for a full time employee to handle it all. Presently, my first two years was a one man HR department, but I did not have payroll. I got payroll under me now and I have past all administrative activities for day to day HR to my Assistant HR/payroll manager. Follow the functional activities to mount an organization structure and when those functions are approved for the HR oversight responsibilities, then you will know when to inlarge regardless of organizational numbers. When you get the total responsibility for training that will, likewise, give you an additional person to also do other administrative HR funtions. I have had as many as 10 HR employees serving 3000 employees over 13 states. There is a reasonable limit based on functions and how much physical work there is to be done. Good Luck Pork

HENRY

SIMPLE WHEN YOU CAN'T HANDLE ALL THE WORK BY YOURSELF!!
xclap

Pork

But Henry, for someone like Cxjo who has their profile locked, you must assume they may need some special guidance and help in sorting through the "bit of doing it all alone". Pork

Cxjo

Yikes -- sorry Pork... I feel like I was slammed. (as for my profile -- didn't realize it was not viewable -- guess I best rectify that)

It's not a matter of doing it alone or realizing when we need more HR staff; however.... I have run into many of my HR colleagues who like to play the power game by running around screaming how busy they are and need more staff. Sort of like building a little feifdom. (and of course it's not just HR who does that -- I had a Marketing Director who amassed a virtual city of Marketing Specialists around her)

Simple answer of when to add new HR staff -- yes -- when the work doesnt get done. But I think we owe it to our organizations to balance that with what the rest of the organization is going through. When my maintenance department has had to eliminate two positions I cannot in good consciensce add staff to HR just cuz we may have to work a bit harder to get the work done.