Can anyone share their structure for
HR Department Structure
Answers
If you relieve HR of recruiting and put that onus on the departments that need individuals (obviously there is a budget, a standard add, a formalized accurate job spec that is related to the job, etc); assuming all employees have access to ADP, then two people should be enough.
My company has under 200 employees and has a Dir. of HR, HR Generalist, and Talent Specialist (recruiting). We've hired over 30 people this year and currently have 12-15 openings at any given time.
HR can be like insurance. If there are no issues, you really don’t need much support. In fact you do not want to over-staff, as they are a straight expense, i.e. a deduction from your bottom line. I have never seen HR add any revenue value.
However, reasons when a HR staff is important – employee relations issues; performance issues; recruiting; multiple locations in multiple states; benefit
The answer depends on how you manage your business. All of these functions can be decentralized, which would reduce your need. But if you are an organization that likes centralization to ensure standardization of HR policies (which I recommend), an HR staff is important.
For a company of 186, two is fine.
I think the answer is it depends. With HR there is the rule of thumb ratio, roughly one person per 100 employees. I noted "ADP Maintenance", does that include payroll processing, which if it did and depending on payroll frequency, would place additional demands and perhaps a slightly higher H/R employee ratio, etc. If your company is going through a rapid hiring stage, an internal recruiter could quickly pay for itself as compared to outsourcing. So again, it really depends on what the organization is tasked with.
1
Great points Ron. I like the ratio.
Guys - some great insight here and thanks for the responses. Just to clarify, for us payroll processing is done out of finance not HR although changes to employee profiles and witholdings (HR Database maintenance) does fall under HR as does benefits administration. Do you usually see a separate resource for benefits? Does the 1 - 100 ratio incorporate that as well?
Hi all, for what it's worth, we have 100 people which includes a Director of HR, and a HR coordinator. We've taken on 15 employees since January so it's been busy however now that we've got everybody I wonder what the 2 people will spend their time on. Payroll is also handled through Finance despite HR making a recent push for the responsibility (my guess is to feel more relevant). I may be coming back to this forum for reasons why payroll processing should stay with Finance instead of HR.
1
David, once an organization surpasses 50 people (the magic number where many local, state and federal employment laws / reporting requirements kick in), it is difficult to not have at least one dedicated HR generalist, even if that person is more or less an admin.
The accompanying dilemmas are (a) The person who is handling the operational / administrative duties usually is either too busy or not equipped to handle other HR issues (and 50-person org's almost always have some of these): Employee relations (investigations, disputes, etc.), talent acquisition and management,
Some of this is the fault of HR practitioners themselves for failing to paint a clear picture of both HR's duties or HR's value, some of it is the fault of senior management choosing to remain blissfully ignorant of HR's duties and HR's value.
In short, don't assume that there is not enough for 2 people to spend their time on. If HR is not keeping you informed on how they spend their time, ask. It's a reasonable request and you might save yourself some heartaches and head-scratching.
We have 200 employees serviced by a C-level VP and one admin level employee. Payroll and benefit negotiations (and some benefits admin) are handled by Finance. The VP was a luxury - more of an opportunistic hire than a need - but background in a search firm has been very helpful in our expansion mode. I think the answer of "it depends" is spot on. If you have either significant growth or turnover or other labor issues, you may need more help but otherwise your first dedicated hire should be in the 75-100 employee range with assistance provided about 100 employees thereafter. We see our admin person under utilized at times but that is the trade off needed to be properly staffed at peak times (reviews, hiring binges, etc). In our case, the HR admin person would not be able to take on the payroll/benefits element from finance from either a time or talent perspective.
Although I am the sole HR person for a group of 90+ employees handling everything from ADP processing to strategizing with senior management on business matters, I think measuring how many HR staff a company should have is not only dependent on many factors but the old metric of 1 HR staff for every 100 employees has been changing. I've been in HR for 3 decades and I can tell you that both the volume and the types of Employee Relations issues we are facing now compared to "back in the days" is enormous. Just think of all the new employment laws that keeps changing ever year.
The 1 per 100 ratio has been around since before most of us were born. In fact, it pre-dates virtually every employment law on the books, which means it does not take into account the amount of paperwork that is generated by the DOL / EEOC / FLSA / ADA / OSHA.and so forth. It also came about at a time of very little HR
CEO's and Finance people like it because it keeps HR headcount down. But then again, most of them don't have any idea what HR does / is required to do.
The 1:100 ratio is at least 40 years old, and probably much older. It is a flat-earth number from another era. HR people should be embarrassed for their role in keeping this mythical creature alive. The 1:100 ratio as a general rule makes no sense; it should be retired and never spoken of again.
You want to know what the proper ratio is? It is the number of HR people that it takes for the organization to achieve its business goals. Undoubtedly, some organizations could get by with a 1:250 ratio, if all they are doing is Transactional HR. I would argue, however, that on the HR continuum of Transactional to Strategic, those on the far right end of the scale might have a ratio of 1:50. What is the proper ratio? Short answer: It depends.
Your headcount growth and turnover rates will drive the answer to this. Recruiting and processing employees in and out of the organization consume a lot of time. Another factor is whether you are using HR strategically or not. If you want HR impacting the bottom line, acting as a part of the leadership team, and driving culture, efficiency, morale, retention, etc., then you need to be sure your highest level HR is not bogged down with compliance and employee life cycle processes.
Filed Under:
Human Capital