More Support for HR, Talent: 3 CHRO Benchmarking Data Insights

In a time of economic uncertainty and AI transformation, optimizing workforce performance and retention is more important than ever, and a new SHRM survey shows how organizations are supporting HR departments to lead this change. SHRM’s recent 2025 CHRO Benchmarking: Insights to Power People Strategy data brief identifies how employers are continuing to invest more people and dollars into their HR functions and talent initiatives.  

“Despite global challenges and financial strain across industries, there’s much for HR leaders to be optimistic about, from rebounded revenue and higher merit increases to an overall expansion of support for the HR function,” said Jim Link, SHRM-SCP, CHRO of SHRM. “The results of this research demonstrate a clear investment in organizations’ people as well as the crucial HR professionals who support their growth and well-being.”

Here are three key takeaways from the data brief for CHROs:

1. Organizations Are Expanding Their Commitment to HR

Two findings in the data brief demonstrate how much organizations are increasing their support of HR functions. 

First, an increasing number of organizations are spending more money on their HR functions than in previous years. The median HR-expense-to-operating-expense ratio — the portion of total organizational expenses allocated to HR — reached 2.4% this year, double the ratio from 2017. Median annual HR budgets increased by 9.1% this year over 2024. 

In addition to putting more dollars behind HR, organizations are building up their HR teams. In 2025, the median HR-to-employee ratio of 1.98 indicates that, on average, nearly two HR employees are available for every 100 employees in an organization, which exceeded the pre-pandemic ratio of 1.58 in 2017. 

Combined with an increase in HR spending, the result is twofold: Employees are getting more support from HR, while HR professionals are receiving more resources they need to provide this support. These increases may also signal that administering HR is becoming more costly than in the past, with factors such as economic inflation driving these increases. Now is a good time for CHROs to consider where they’re investing their spending and use this buy-in to make budget asks or push for new initiatives.  

2. Productivity Rebounds to Pre-Pandemic Levels

The data brief found that median revenue per full-time equivalent (FTE) — total labor hours invested by employees within an organization — reached almost $173,000, the highest figure recorded in this research since 2017. This rising figure suggests a return to and stabilization of pre-pandemic levels of productivity. 

Evaluating an organization’s revenue per FTE offers HR leaders a valuable metric to gauge productivity levels. When you as an HR leader can demonstrate the link between employee productivity and the organization’s bottom line, you illustrate the value of HR. You can use this data to drive business goals and enhance executive alignment across the C-suite. 

3. Salaries Are Taking a Bigger Slice of the Budget

The benchmarking data brief found that organizations are allocating a larger share of their operating expenses to employee salaries and wages. In 2025, employee salaries and wages accounted for a median of 45.1% of organizations’ operating expenses, up sharply from 40.9% just three years ago. 

At the same time, organizations are also offering higher merit raises than in previous years. The median annual salary increase rose to 3.6% from 2024 to 2025, surpassing the 3.0% median annual increases reported in 2017 and 2022. 

These upward trajectories of financial investment demonstrate that organizations are working hard to stay competitive during this time of a tight labor market and wage inflation. Those issues are among the top concerns for HR leaders in 2025, according to SHRM’s CHRO Priorities and Perspectives report. Additionally, HR leaders know well that failing to provide competitive wages and incentives can hurt employee morale and spike turnover.  

HR leaders have to walk the tricky tightrope between what employees need and what the organization can provide. If your organization has the budget for these salary investments, make sure you’re investing in your high-potential employees who will drive long-term business growth.