Hi Folks,
Greetings!
Just wish to put this question as the discussion thread to the forum.
It is true that the HR to employee ratio remains a debatable issue in most organizations. Much depends on the HR vision of the organization. One of the key factors is to ensure that the ambition and vision should not be out of sync with the ground realities of resources needed to realize the vision. Companies with ambition and vision that also know how to make it real will invariably spend more on HR and have a higher ratio. Additionally, companies in the growth phase have fewer bureaucratic controls and processes; thus, they do not need as many support personnel. Software firms typically have an employee self-service attitude, thus reducing the number of support staff. Software firms have a tendency to use partners or outsource non-essential functions. For example, the administrative HR functions (payroll, benefits, and training) are outsourced, and technology partners provide the recruiting and staffing activities. These tactics dramatically reduce the number of support personnel required in the HR function alone.
HR ratios are based on business requirements, and in some cases, they can be benchmarked as per the prevalent industry standards. The ratio is generally based on minimum staffing requirements to fulfill the basic HR needs of an organization.
Your comments invited.
Cheers,
Saurabh
From India, New Delhi
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4Greetings!
Just wish to put this question as the discussion thread to the forum.
It is true that the HR to employee ratio remains a debatable issue in most organizations. Much depends on the HR vision of the organization. One of the key factors is to ensure that the ambition and vision should not be out of sync with the ground realities of resources needed to realize the vision. Companies with ambition and vision that also know how to make it real will invariably spend more on HR and have a higher ratio. Additionally, companies in the growth phase have fewer bureaucratic controls and processes; thus, they do not need as many support personnel. Software firms typically have an employee self-service attitude, thus reducing the number of support staff. Software firms have a tendency to use partners or outsource non-essential functions. For example, the administrative HR functions (payroll, benefits, and training) are outsourced, and technology partners provide the recruiting and staffing activities. These tactics dramatically reduce the number of support personnel required in the HR function alone.
HR ratios are based on business requirements, and in some cases, they can be benchmarked as per the prevalent industry standards. The ratio is generally based on minimum staffing requirements to fulfill the basic HR needs of an organization.
Your comments invited.
Cheers,
Saurabh
From India, New Delhi
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Dear Saurabh,
Believe it or not, HR across the world is going through a major transformation phase. Reasons are enumerative: Global Culture, Leaner structure, stress on Delivery not on performance, Organization getting into Core Competencies, Era of Outsourcing, etc.
Looking into that, the focus is no longer on the size of the team but on the competencies of the team and the ability to deliver, as HR has also become a profit center by itself. Size has also become unimportant as what was traditionally thought the core area of HR has now become an outsourced process where HR has only a contract management role.
Therefore, what is needed in HR is a resilient and agile role. As the Chinese proverb says, "May we live in interesting times."
Cheers,
Dhole
From India, Delhi
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Believe it or not, HR across the world is going through a major transformation phase. Reasons are enumerative: Global Culture, Leaner structure, stress on Delivery not on performance, Organization getting into Core Competencies, Era of Outsourcing, etc.
Looking into that, the focus is no longer on the size of the team but on the competencies of the team and the ability to deliver, as HR has also become a profit center by itself. Size has also become unimportant as what was traditionally thought the core area of HR has now become an outsourced process where HR has only a contract management role.
Therefore, what is needed in HR is a resilient and agile role. As the Chinese proverb says, "May we live in interesting times."
Cheers,
Dhole
From India, Delhi
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Dear Saurabh,
Any decision on the ratio of HR strength to the overall strength would depend on factors like nature of organization, size, age, phase of growth, management approach, ownership details, etc. To fix an ideal ratio is difficult. With outsourcing becoming the order of the day, many HR maintenance functions can be easily outsourced and need to be done so. Keeping more service function personnel is a serious drain on resources and tends to stray the focus. Indeed, it is learned that TISCO has formed a subsidiary company to look after areas like estate management, and it is a profit center from day one. HR professionals need to focus on reducing the manpower requirements in non-value addition jobs. As a finance man put it, the value addition of each person shall be greater than the cost he brings to the company. Judging by such standards, many jobs in the HR area are on the chopping block. Therefore, a ratio that is appropriate for today may be viewed as excessive tomorrow. By general standards, maintaining a strength of less than 10% would be optimal for today's conditions.
Regards,
KK Nair
From India, Bhopal
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Any decision on the ratio of HR strength to the overall strength would depend on factors like nature of organization, size, age, phase of growth, management approach, ownership details, etc. To fix an ideal ratio is difficult. With outsourcing becoming the order of the day, many HR maintenance functions can be easily outsourced and need to be done so. Keeping more service function personnel is a serious drain on resources and tends to stray the focus. Indeed, it is learned that TISCO has formed a subsidiary company to look after areas like estate management, and it is a profit center from day one. HR professionals need to focus on reducing the manpower requirements in non-value addition jobs. As a finance man put it, the value addition of each person shall be greater than the cost he brings to the company. Judging by such standards, many jobs in the HR area are on the chopping block. Therefore, a ratio that is appropriate for today may be viewed as excessive tomorrow. By general standards, maintaining a strength of less than 10% would be optimal for today's conditions.
Regards,
KK Nair
From India, Bhopal
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