The ratio of HR staff to employees is at an all-time high in Bloomberg’s 2018 Benchmarks Report. HR-to-employee ratios are a somewhat controversial metric that can help establish HR staffing and determine how well HR delivers services. But you should calculate and use the number correctly, or don't use it at all. In this webinar, we’ll review: What can drive the HR Effectiveness ratios up or down What this ratio tells us about strategy and effectiveness How to measure the ratio and, more importantly, how to put it into context.

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Getting Meaning
out of the
HR Effectiveness Ratio

6. Agenda: HR Effectiveness
Understanding
the Ratio
Measuring
the Ratio
Putting HR into
Context to Measure
Effectiveness

7. Measuring HR Ratio
How is it measured?
What is it?
Measuring
the Ratio
What’s Normal

8. Measuring HR Ratio
What is It?
:
HR FTEs to
Total Number of
Employees (FTEs)

9. Measuring HR Ratio
How Is It
Measured?
HR FTEs/
Total Number of
Employees (FTEs)
X 100
18
X 100
= 2.4
750

10. Measuring HR Ratio
How is it
Measured
HR FTEsHR FTEs except:
● Payroll
● Learning &
Development
HR FTEs to include
are:
● Generalists
● Benefits
● Compensation
● Labor Relations
● Organizational
Effectiveness

11. Measuring HR Ratio
What’s Typical
Highest ratio in 40 years
Bloomberg’s HR Department
Benchmarks and Analysis 2018 report
:
1.5 HR FTEs
(median)
100 Employees (FTEs)

12. Measuring HR Ratio: POLL QUESTION
?
Are you measuring your HR ratio?
● Yes
● No
Share your ratio in the chat, and how
you’re using it

13. Understanding the Ratio
Focus and Maturity
of HR
Organization Size
Understanding
the Ratio
Strategic Level

14. Understanding the Ratio
Minimum HR Baseline
for Primary Services
Organization
Size
Increased
specialization &
systems
<100
2.70
100-249
1.26
250-499
1.07
500-999
.82
1000-2499
.79
2500-7499
.53
7500+
.42
Source: SHRM Human Capital
Benchmarking Study

15. Understanding the Ratio: POLL QUESTION
?
Is your ratio standard for your
organization size?
● Yes
● No

16. Understanding the Ratio
Focus and Maturity
of HR
COMPLIANCE
DEVELOPMENT
Talent Acquisition
Compensation
Payroll
Safety
Labor Relations
Learning &
Development
Performance
Management
Engagement &
Retention
Onboarding &
Training
Succession Planning
Regulatory
Compliance
Time Management
EMPLOYEE
ORGANIZATION
Benefits
Career Planning

17. Understanding the Ratio
Reactive
Focus and Maturity
of HR
Integrated
Strategic
Standardized
Standardized
Integrated
Strategic
Most organizations are here
CEOs and
CHROs want to
get here
Reactive
HRRatio
Low
High

18. Understanding the Ratio: POLL QUESTION
?
What stage of maturity is your HR
department at?
● Reactive
● Standardized
● Integrated
● Strategic

19. Putting HR Ratio into Context to Measure Effectiveness
Alternative
Measures
Uses & Limits
Putting the Ratio
into Context
Meaningful Context

20. Uses & Limits
Does an Organization of 3500
people need 27.65 HR
Personnel?
● A health check
● Measure workload
● Look at balance
● Assess effectiveness
Putting HR Ratio into Context to Measure Effectiveness

21. Integrated
Reactive
Uses and Limits
Strategic
Standardized
● Reduced cost
● Increased
efficiency
● Consumer-type
experience
● Be efficient
● Drive talent
agenda
● Improve
performance
and
engagement
Putting HR Ratio into Context to Measure Effectiveness

22. Putting HR Ratio into Context to Measure Effectiveness:
POLL QUESTION
?
What is, or was, your HR department’s
impetus for installing a new HRIS?
● Cost savings, labor and/or technical
● Applying standard HR practices
● Becoming more efficient
● Becoming more efficient so that we
had time to become more strategic
● I don’t know

23. HR Recruiting
to Managers
Alternative Measures
HR FTEs
HRBPs to
Managers
HR FTEs
/
Organization FTEs
100
X
(minus Payroll and L&D)
HR Employees
Putting HR Ratio into Context to Measure Effectiveness

24. Alternative Measures
● Voluntary Turnover
● Risk of Exit
● High Performers
● Quality of Hire
● Employee Relations
● Engagement
● HR Ratio
● HRBPs to Managers
● HR Recruiting to
Managers
● HR Employees
● HR FTEs
X
Ratio
Trends
Drivers
Relationship
Breakdown
Putting HR Ratio into Context to Measure Effectiveness

25. Meaningful Context
Improved
Quality of Hire
● Is the recruiting
function staffed
to handle
demand
● Can we
increase the
quality of hire
by tuning our
approach
Reduced
Turnover
● Does higher HR
staffing improve
retention
● Are there
hotspots for
turnover that
we can target?
Better
Employee
Relations
● Is it taking
longer to
resolve cases
● Do some
organizations
have more
cases than
others?
Increased
Engagement
● Does higher HR
staffing improve
engagement
● Which HR
initiatives
correlate to
engagement
increases
Putting HR Ratio into Context to Measure Effectiveness

26. Putting HR Ratio into Context to Measure Effectiveness:
POLL QUESTION
?
Using the Chat tell us what question
about your HR’s performance you’d most
like answered. Examples:
● Are the candidates we hire proving to
be good employees?
● Which managers need more support?
● Are we keeping good employees?

27. Meaningful Context
Measure Level of HR
Impact
Align Organization
Goals to HR Sphere
Determine HR
Structure Needed to
Drive Goals
Putting HR Ratio into Context to Measure Effectiveness

28. Meaningful Context
Putting HR Ratio into Context to Measure Effectiveness
64%
23%
79%
28%
65%
19%
Improved Efficiency
Notable
Cost Savings
Data-driven
Decision-making
Impact on
Organizational
Goals
?
Agree
Disagree

29. Meaningful Context
Putting HR Ratio into Context to Measure Effectiveness

30. Putting HR Ratio into Context to Measure Effectiveness:
POLL QUESTION
?
Do you have access to the metrics and
analytics that you need to be an effective
HR department?
● Yes
● No

31. Meaningful Context
Putting HR Ratio into Context to Measure Effectiveness

32. Meaningful Context
Putting HR Ratio into Context to Measure Effectiveness

33. Meaningful Context
Putting HR Ratio into Context to Measure Effectiveness

34. Meaningful Context
Putting HR Ratio into Context to Measure Effectiveness

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