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Human Resources Budgets, Staffing, and Process Metrics

How much are organizations budgeting for their human resources (HR) function, and how many HR professionals do they require? What is the allocation of HR resources by job function and subprocesses, and what is the split between internal and external personnel (outsourced or in shared services centers)? How is the HR budget allocated? What are the key performance metrics for the HR function? To answer these questions, and others, we provide our HR Budgets, Staffing, and Process Metrics study. For a full description, read more below.

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INTENDED AUDIENCE

For Chief HR Officers and HR professionals, this study provides key metrics and unbiased data for benchmarking your organization’s HR function, with a focus on HR budgets and staffing levels and key performance metrics. This study will allow you to achieve the following outcomes:

Benchmark your HR budget levels. Compare them with those of organizations in your industry sector.
Manage your HR staffing levels, including internal staffing as well as external staff, those within business process outsourcing (BPO) providers or in shared services units. A variety of staff productivity metrics are provided (see below)
Evaluate your HR key performance indicators (KPIs). These allow you to compare the performance of your HR organization against your industry peers.

For business process transformation (BPT) providers, this study provides valuable insights into current HR budgets and staffing metrics, offering up-to-date market landscape information. It also provides insights into the current use of external HR personnel for various job positions.

KEY METRICS DESCRIPTIONS

Each section begins with an introduction, presenting the key findings for the chapter.

Section 1: Demographics

In section 1, we provide a description of the survey sample’s demographics for the chapter. These include organization-size demographics such as revenue, SG&A spending levels, organization size related to HR business in the previous fiscal year, number of employees, and revenue per employee. We continue with HR demographics, including total HR staff head count, employee growth rate per year, attrition rate for the past fiscal year, replacement ratio, turnover rate, and contingency workers as a percentage of the total HR staff head count.

Section 2: HR Spending Metrics

In section 2, we examine the annual budget for the HR function. In other words, we look at how much organizations spend to operate their HR operations. These key metrics include:

HR Function Budget as Percentage of Revenue
HR Function Budget as Percentage of SG&A Expenses
SG&A Budget as a Percentage of Revenue
HR Function Budget by Line Item
Percentage of Technology Budget Spent on AI
AI Service Provider Engagement Models
HR Processes as a Percentage of HR Function Budget

Section 3: HR Staffing Metrics

In section 3, we provide typical staffing levels for the HR function. This includes internal staff, which includes contingency workers, and external staff, which includes HR personnel in global capability centers (GCCs) or shared services centers, outsourcing service provider personnel serving the HR function, or personnel residing in other departments. These key metrics include:

HR Personnel as a Percentage of Overall Employees
Number of Employees per HR Staff Member
HR Staff by Personnel Type
Percentage of Total HR Personnel Performing Various HR Subfunctions
Percentage of Internal HR Personnel Performing Various HR Subfunctions
Percentage of GCC HR Personnel Performing Various HR Subfunctions
Percentage of Outsourced HR Personnel Performing Various HR Subfunctions
HR Outsourcing Strategy by Function
HR Outsourcing Strategy by Region

Section 4: HR AI Impact

In section 4, we provide benchmarks to evaluate the impact AI has had and is anticipated to have on the HR function. These key metrics include:

AI-Driven FTE Reduction as a Percentage of Total HR FTEs and Anticipated AI-Driven FTE Reduction as a Percentage of Total HR FTEs
Impact of AI on Internal, Outsourced, and GCC HR Personnel
Projected Impact of AI on Internal, Outsourced, and GCC HR Personnel
Impact of AI on Internal HR Personnel Performing Various HR Subfunctions
Projected Impact of AI on Internal HR Personnel Performing Various HR Subfunctions
Impact of AI on Outsourced HR Personnel Performing Various HR Subfunctions
Projected Impact of AI on Outsourced HR Personnel Performing Various HR Subfunctions
Impact of AI on GCC HR Personnel Performing Various HR Subfunctions
Projected Impact of AI on GCC HR Personnel Performing Various HR Subfunctions

Section 5: HR Organization Performance

In section 5, we provide a comprehensive set of benchmarks to assess the performance and intensity of the HR function. These key metrics include:

Payroll Cycles per Year
Off-cycle Payrolls per Year
Number of Payslips per Employee per Year
Payslips per Payroll Staff Member per Year
Percentage of Employees Requesting Benefits Change per Year
Benefits Change Requests per Benefits Staff Member per Year
Performance Reviews per Employee per Year
Performance Reviews per Performance Management Staff per Year
Appraisals per Employee per Year
Appraisals per Performance Management Staff Member per Year
Percentage of Employees Who Receive Formal Performance Reviews
Percentage of Employees Internally Progressed or Promoted
Learning Hours per Employee per Year
Time to Fill
Recruitment Cycle Time
Cost per Hire
Payroll Accuracy
Payroll Processing Timeline
Employee Benefits Cost Ratio
Benefits Enrollment Rate
Rewards Cost Ratio
HR Response Time
Employee Self-Service Adoption Rate
Manager Self-Service Adoption Rate

Section 6: HR Technology Trends

In section 6, we provide an overview of HR technology implemented to support the HR processes of the organization. These key metrics include:

Top 10 Recruitment and Onboarding Systems
Top 10 Employee Administration and Mobility Systems
Top 10 Payroll and Time and Attendance Systems
Top 10 Compensation and Benefits Systems
Top 10 Performance Management and Rewards and Recognition Systems
Top 10 Learning and Development Systems

Appendix

The Appendix includes common terms and definitions used in our annual survey and in this study. It also includes a detailed definition for all HR spending categories and staffing categories. The Appendix concludes with a brief discussion on the statistics used in this study.

Common Terms and Definitions
HR Process Definitions
Statistical Notes

CHAPTER DESCRIPTIONS

Chapter 1: Executive Summary (Free Download)

This chapter provides an overview of the key findings from the full study and describes the contents of the subsequent chapters. It also includes information on the study participants and the survey methodology.

Introduction
Key Findings
Overview of the Study Contents

Chapter 2: Composite Metrics

This chapter provides composite metrics for all survey respondents across all sectors and organization sizes. The sample includes 298 organizations and is stratified by size and sector as described in the section on survey methodology. Respondents must have at least $500 million in annual revenue. There is no upper limit on the revenue of survey respondents.

Chapter 3A and 3B: Benchmarks by Organization Size

In these chapters, we provide a complete set of benchmarks for organizations within the specified size classification. Benchmarks for midsize and large organizations are in Chapter 3A and for very large organizations in Chapter 3B. There are 144 respondents in the midsize and large organization sample and 154 in the very large organizations sample. We define the size categories as follows:

Midsize and large organizations have annual revenue of more than $500 million up to $5 billion.
Very large organizations have annual revenue of $5 billion and above.

Chapter 4: Banking and Finance Sector Benchmarks

Chapter 4 provides comprehensive human resources (HR) process metrics benchmarks within the banking and financial services sector. This sector encompasses a wide array of organizations, including commercial banks, investment banks, credit unions, mortgage lenders, consumer finance lenders, and other financial services providers. The 39 respondents in this sector vary significantly in size, ranging from companies with annual revenue over $540 million to those with annual revenue under $40 billion.

Chapter 5: Energy and Utilities

Chapter 5 provides comprehensive human resources (HR) process metrics benchmarks within the energy and utilities sector. This sector encompasses a wide array of organizations, including energy producers, utility companies, and other related service providers. The 36 respondents from this sector vary significantly in size, ranging from companies with annual revenue of over $500 million to $38 billion.

Chapter 6: Healthcare Payors

Chapter 6 provides comprehensive benchmarks for human resources (HR) process metrics within the healthcare payor sector. The category includes manufacturers of consumer products, athletic equipment, industrial equipment, telecommunications equipment, aerospace products, furniture, automotive parts, electrical parts, medical devices, and electronic devices, among others. The 33 respondents in this sample range in size from over $800 million to under $87 billion in annual revenue.

Chapter 7: Healthcare Providers

Chapter 7 provides comprehensive human resources (HR) process metrics benchmarks within the healthcare provider sector. This sector encompasses a wide array of organizations, including hospitals, clinics, and other related service providers. The 33 respondents in this sector vary significantly in size, ranging from companies with annual revenue over $500 million to those with annual revenue under $72 billion.

Chapter 8: Insurance

Chapter 8 provides comprehensive human resources (HR) process metrics benchmarks within the insurance industry. This sector includes a broad range of organizations, including life and health insurers, property and casualty carriers, reinsurance providers, and specialized insurance service firms. The 14 respondents from this sector vary considerably in scale, ranging from companies with annual revenues of under $1 billion to those with annual revenues of more than $60 billion.

Chapter 9: Life Sciences

Chapter 9 provides comprehensive benchmarks for human resources (HR) process metrics within the life sciences sector. This category includes companies involved in pharmaceuticals, biotechnology, medical devices, and healthcare services, among other areas. The 34 respondents in this sample range in size from over $500 million in annual revenue to under $41 billion in annual revenue.

Chapter 10: Discrete Manufacturing

Chapter 10 provides comprehensive human resources (HR) process metrics benchmarks within the discrete manufacturing sector. This sector encompasses a wide array of organizations, including manufacturers of discrete products and related service providers. The 23 respondents in this sector vary significantly in size, ranging from companies with annual revenue over $600 million to those with annual revenue under $31 billion.

Chapter 11: Process Manufacturing

Chapter 11 provides comprehensive human resources (HR) process metrics benchmarks within the process manufacturing sector. This sector encompasses a wide array of organizations, including manufacturers of discrete products and related service providers. The 25 respondents in this sector vary significantly in size, ranging from companies with annual revenue over $600 million to those with annual revenue under $30 billion.

Chapter 12: Media and Information Services

Chapter 12 provides comprehensive human resources (HR) process metrics benchmarks within the media and information services sector. This sector encompasses a wide array of organizations, including digital publishers, broadcasting networks, content production studios, advertising agencies, data analytics firms, news organizations, content distribution platforms, and large multimedia enterprises. The 14 respondents in this sector vary significantly in size, ranging from companies with annual revenue of over $2 billion to more than $16 billion.

Chapter 13: Professional or Tech Services (other than IT)

Chapter 13 provides comprehensive human resources (HR) process metrics benchmarks for the professional and technical services sector (excluding IT). This sector encompasses organizations such as consulting firms, engineering practices, scientific research entities, legal service providers, architectural companies, accounting and audit firms, marketing agencies, and other professional services enterprises. The 14 respondents in this sector vary significantly in size, ranging from companies with annual revenue of over $640 million to those with annual revenue of more than $24 billion.

Chapter 14: Retail

Chapter 14 provides comprehensive human resources (HR) process metrics benchmarks for the retail sector. This sector encompasses a wide array of organizations, including supermarkets, department stores, specialty retailers, e commerce companies, wholesale outlets, convenience chains, and large multi format retail enterprises. The 17 respondents in this sector vary significantly in size, ranging from companies with annual revenue of over $700 million to more than $97 billion.

Chapter 15: Transportation and Logistics

Chapter 15 provides comprehensive human resources (HR) process metrics benchmarks for the transportation and logistics sector. This sector encompasses a wide array of organizations, including freight and cargo operators, logistics service providers, shipping companies, airlines, trucking fleets, rail carriers, and warehousing and distribution firms. The 16 respondents from this sector vary significantly in size, ranging from companies with annual revenue of over $1 billion to those with annual revenue of $22 billion.

HR BENCHMARKING

Avasant Research not only publishes business process metrics. We also provide custom benchmarking services for clients.

Looking for expert assistance in evaluating your HR budgets, staffing, and key performance metrics? Our custom benchmarking consulting service provides an in-depth assessment of your HR key metrics against our database of peer organizations.