Under Pressure

By Jennifer Schramm Apr 1, 2011

April Cover

The need for greater productivity from fewer employees continues to be a business driver—and HR departments aren’t spared that pressure. Are they positioned to respond?

During the Great Recession, HR professionals dealt head-on with the turbulent U.S. job market. They oversaw staffing cuts and in some cases joined the ranks of the unemployed. These trends have led some to question whether the overall HR-to-employee ratio has dropped. Others wonder if the ratio has actually gone up as more HR expertise is required to comply with complex laws and regulations.

Median HR-to-employee ratios remained relatively stable in the United States during the recession, the SHRM Customized Benchmarking Database shows. The database contains benchmarking metrics from U.S. companies of all sizes and types.

The ratio of HR staff to employees increased somewhat from 2007 to 2008, when many layoffs occurred. In 2007, the ratio was 1.12 HR staff per 100 employees. In 2008, it rose to 1.33 per 100. Then, it dipped slightly in the latest figures to 1.27 HR staff per 100 employees in 2009. These minor shifts may have occurred because employers kept HR departments fully staffed to manage layoffs during the worst months of the recession, but then reduced HR staffs once most layoffs were completed. In addition to keeping HR staff on board during layoffs, employers relied on HR professionals to help retain remaining employees and keep morale and productivity relatively high.

The Agenda Going Forward

Today, productivity remains a priority. In the latest SHRM Workplace Forecast survey report released in February, 1,247 HR professionals identified the top actions their organizations are taking or planning to take in response to workplace trends: 89 percent report linking employee performance to its impact on the organization’s business goals, while 85 percent report increasing expectations of employee productivity.

HR professionals are feeling this pressure to boost productivity themselves. So, while the HR-to-employee ratio may not be increasing, HR professionals will need to:

  • Get more involved in some strategic issues.
  • Develop new skills and competencies.
  • Leverage technology to reduce their transactional and administrative workload.

The SHRM Workplace Forecast identified other actions employers are taking or planning to take that underscore the emphasis on increasing HR productivity. For example: 70 percent report investing in training for the HR department to develop broader business acumen among HR staff; 59 percent report reorganizing the HR function to meet changing strategic needs; and 57 percent are using metrics to demonstrate HR’s return on investment.

Another 38 percent report emphasizing certification for HR professionals, and 37 percent are increasing the use of specialized HR practitioners.

The U.S. Bureau of Labor Statistics expects the HR field to experience job growth during the coming decade. But if HR-to-employee ratios remain stable and the focus on productivity continues to grow, it’s likely that many new HR jobs will be specialized and demand more skills and competencies.

The author is manager of the Workplace Trends and Forecasting program at SHRM.

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