The human resources (HR) function has evolved into a multidimensional discipline, encompassing talent acquisition and management, employee engagement, performance management, and digital HR transformation. These elements are critical for enabling organizations to navigate today’s volatile market conditions and remain competitive. As organizations embrace digital transformation, there is a noticeable shift in HR investment priorities. But where are these investments being directed, and how much is being allocated?
To answer these questions, we proudly present our annual HR Budgets, Staffing, and Process Metrics 2024/2025 report. This comprehensive report delves into the financial and staffing trends shaping HR today, offering valuable benchmarks for companies seeking to optimize their HR strategies.
As shown in the figure below from the executive summary (available to download for free), banking and financial services companies are allocating the highest percentage of their revenue toward HR. This aligns with the expectation that industries governed by strict regulations and compliance standards, like banking and finance, would naturally command larger HR budgets. Similarly, healthcare providers continue to allocate significant HR resources toward employee well-being and compliance needs. These findings highlight that these sectors consistently prioritize HR investments more than manufacturing or retail industries, underscoring their focus on operational excellence and regulatory adherence.
The enterprise focus in HR has shifted toward adopting digital technologies such as generative AI, automation, predictive analytics, and RPA to revolutionize HR operations. These technologies streamline routine and repetitive tasks such as payroll processing, employee onboarding, and benefits administration, enabling HR professionals to concentrate on high-value activities such as talent development, employee engagement, and strategic workforce planning. Moreover, digital technologies provide real-time insights into employee performance and engagement, empowering organizations to adapt quickly to market fluctuations, improve employee satisfaction, and make data-driven decisions with enhanced accuracy and efficiency.
Staffing remains a crucial factor in achieving HR success. Organizations must strike a balance between retaining skilled HR professionals and leveraging automation or outsourcing to improve operational efficiency. Benchmarks for HR staffing provide insights into optimal workforce levels based on organizational size, industry, and HR budget allocations. Key metrics include the ratio of HR staff to total employees, the split of HR resources across subprocesses, and productivity measures such as employee satisfaction scores and retention rates. These metrics are invaluable in helping companies allocate resources effectively and enhance workforce productivity.
Understanding spending and staffing patterns in HR is essential for optimizing operational strategies and ensuring alignment with industry best practices. Our findings offer benchmarks across key areas, including HR expenditure, staffing levels, and process efficiency, enabling organizations to identify gaps and refine their strategies. By comparing performance against these benchmarks, HR leaders can unlock process improvements, streamline talent management, and elevate the strategic value of their HR functions.
“HR is no longer just a support function, but now it is driving growth and innovation through people,” said Shabnum Grewal, partner at Avasant. “With advancements in technology and data-driven metrics, HR has become more efficient, enabling evidence-based decision-making and strategic resource benchmarking.”
Our HR Budgets, Staffing, and Process Metrics 2024/2025 study is based on a comprehensive survey of 149 organizations in North America and Europe regarding their HR spending and staffing plans for 2024/2025. The study offers benchmarks for midsize, large, and very large organizations across seven sectors. The free executive summary describes the study’s metrics, design, demographics, and methodology.
This Research Byte is a brief overview of the findings in our report, HR Budgets, Staffing, and Process Metrics 2024/2025. The full 10-chapter report is available as an add-on to existing Avasant Research clients. Individual chapters may be purchased directly from our website (click for pricing).