HR roles and responsibilities: 2015 XpertHR survey
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1 2015 survey findings from HR roles and responsibilities: 2015 XpertHR survey This report is supplied free of charge to a participant in XpertHR research to thank them for taking part in the study. The report includes: The full article as it appears on XpertHR Copyright in this document is the property of the publishers. If you make clear the source of the information, you may use it freely within your organisation. Under no circumstances may you republish it, share it with other organisations, use it in consultancy services, or use it without attributing XpertHR as the source. If you are in doubt, please contact Sheila Attwood at sheila.attwood@xperthr.co.uk.
2 HR roles and responsibilities: the 2015 XpertHR Author: Noelle Murphy About this survey report This summary report covers key findings from the 2015 survey on HR roles and responsibilities, and focuses on the ratio of HR practitioners to employees and current and ongoing initiatives by sector. XpertHR's benchmarking service has the full data on all the questions from our HR roles and responsibilities survey, including: ratios of HR practitioners to employees by size and sector of respondents; level of HR representation throughout the organisation; measures taken into account when assessing HR effectiveness; and HR budgets, including budgetary trends over the past year. HR played a key role in ensuring that businesses had the necessary agility to scale-up and scale-down to meet the needs of the organisations during the recession. Our 13th annual survey of HR roles and responsibilities finds that the profession is now in relatively good health following a few turbulent years. In this first survey analysis of a three-part series, we focus on key HR metrics. Forthcoming features will concentrate on the characteristics of an effective HR department and the key HR priorities, by sector, for Key HR metrics Just under half (46%) of the 354 HR practitioners responding to our survey say the HR function has its own budget - down from last year's figure of 53%. When we look at the median budget running costs per employee, the figure for 2015 stands at down somewhat on the median figure of 833 recorded in However, more than one in four (26%) of our respondents told us that the actual spend on HR running costs was higher than budgeted for, and three in 10 (30%) spent more on HR activities than had been budgeted for. More than two in five (43%) report that the budget for HR running costs has increased over the past two years, with just one in five (21%) reporting a decrease. The picture is similar when it comes to the budget for HR activities - over the past two years, almost half (45%) have seen it increase, while just over one in four (27%) have seen it decrease. Looking to the future, one in three (33%) respondents predict an increase in the HR running costs budget over the next two years, while one in five (21%) predict a decrease. Table 1, below, presents key HR metrics from the 354 HR practitioners that responded to our survey. It covers key metrics about the make-up of the HR function and budgets. We quote the lower quartiles (the figure for organisations in the bottom 25% of the range) and the upper quartile (top 25%). As usual, we also present the median figure - recognised as a more accurate figure than the average, as it is not skewed by a few exceptionally high or low figures. For comparison and context, we also present the mean (average) figure. XpertHR HR roles and responsibilities: 2015 XpertHR survey 2
3 Table 1: Key HR metrics 2015 Lower quartile Median Upper quartile Mean Ratio of employees to HR staff (n=3354) 1:46 1:74 1:111 1:91 Percentage of HR staff in managerial roles (n=354) Annual HR department running costs per employee (n=117) Annual HR activities budget per employee (n=107) 33% 43% 55% 48% , ,812 2,100 Source: XpertHR. Ratio of HR practitioners to employees The ratio of HR practitioners to employees is one of the key metrics when looking at the shape and structure of the HR function. However, we do not suggest that our findings are used as targets - each organisation will have its unique context to support its ideal ratio. We have specified definitions that should be included when respondents are calculating HR headcount, which allows for a certain level of confidence in the consistency of our findings in this area. Respondents were asked to provide HR headcount information, based on the following guidelines: to include within the HR headcount staff dealing with training, recruitment, reward and organisational development, together with the explicit addition of equal opportunities; but to exclude staff dealing with payroll and pensions, occupational health, health and safety and purely secretarial work. This year, we find the median number of employees covered by an HR practitioner is 74 (see table 1 above), compared with 70 in Looking back to 2010, the ratio of HR practitioners to employees has followed a downward trend - in 2010, the ratio stood at 1:90. And, since the high of 1:118 in 2007, the median ratio has continued to fall, settling in at around 1:70. This might not be the trend that would have been predicted, given the swathe of job losses during the economic downturn and cuts to public-sector spending. However, it seems that the HR function has been proving its worth in managing programmes, resulting in redundancies during the downturn and recruitment during the upturn. XpertHR HR roles and responsibilities: 2015 XpertHR survey 3
4 Chart 1: Ratio of HR practitioners to employees Source: XpertHR. Changes in HR numbers On closer examination of changes within the HR function, we find that, in more than one in three (37%) organisations, the number of HR staff employed has increased over the past two years. One organisation in six (16%) has seen the number of HR staff decrease, and in almost half (47%) of the organisations surveyed, the number of HR staff has stayed the same. This shows some stability within the HR function, and demonstrates the value that the function is offering to the organisation as a whole. Among organisations where numbers have increased, the median increase is three members of staff, and the mean is 6.5. The main reason given for the increase in numbers is to meet a growing HR workload (74%), followed by an increase in employee numbers elsewhere within the organisation (54%). Interestingly, one in four (25%) of those responding told us that the HR department was newly established - perhaps an indication of the growing importance of a standalone HR department to deal with all human resourcing issues. By organisation size, we see that the move towards a standalone HR function is spread evenly between small (1-249 employees) and medium-sized ( employees) organisations. Where the number of HR staff fell, the numbers reduced by a median of 8.5 employees and an average of 19. The three main reasons quoted by respondents for this change are: efficiency improvements (46%); restructure of the HR department (46%); and a general redundancy programme (37%). Almost one in four (23%) have seen HR staff numbers drop due to the use of e-hr technologies, and almost one in five (18%) because HR tasks have been devolved to line managers. There is further information on the benchmarking product, relating to ratios of HR practitioners to employees, by size and sector of our respondents, and changes in staffing levels over the past two years. XpertHR HR roles and responsibilities: 2015 XpertHR survey 4
5 Use of HR metrics This year, for the first time, we asked respondents to tell us which HR metrics are measured regularly within their organisation, and which of these are taken into account when assessing the effectiveness of the HR function. Table 2, below, shows how popular each of the metrics are, with absence management data coming out as number one. When it comes to using these metrics to measure the effectiveness of the HR function, the following are the top five, ranked in order of popularity: absence-management data (64%); staff turnover data (60%); results of employee surveys (55%); exit interview feedback (45%); and disciplinaries/grievances data (40%). When we compare this list with the ranking of HR metrics, we find that spending against budget - ranked third in terms of measurement - is taken into account in only one in three (34%) organisations when measuring the effectiveness of the HR function. Table 2: HR metrics measured by organisations Metric % of organisation Absence-management data 72% Disciplinaries/grievances data 68% Spending against budget 68% Staff turnover data 62% Exit interview feedback 60% Performance appraisal results 57% Results of employee surveys 57% Anecdotal/informal feedback 49% Numbers of tribunal cases 44% Cost per hire 39% Measures of organisational performance 38% Benchmarking against similar organisations 36% Diversity and equality 25% Time-to-competence data 21% Time-to-fill vacancies data 21% None 2% Source: XpertHR. n=354 Just over two in five (41%) of our respondent organisations felt that its HR department gathered enough meaningful data to measure HR performance. The main reasons for this were a to lack of accurate recording tools that were easily integrated with other metrics within the business, as well as no drive from senior management to gather or interpret such metrics. XpertHR HR roles and responsibilities: 2015 XpertHR survey 5
6 Our research This report is based on original research carried out online in November Responses were received from 354 HR practitioners working in organisations employing more than 283,859 people. The breakdown by economic sector is as follows: 249 (70%) are in private-sector services; 61 (17%) are in manufacturing and production; and 44 (13%) are in the public sector. Broken down by workforce size, the respondent organisations comprise: 153 (43%) with between one and 249 employees; 131 (37%) employing between 250 and 999; and 70 (20%) with 1,000 or more. The smallest organisation employs five and the largest employs 20,000 people. The median number employed is 290. What should I do now? (subscription required) See our 2014 roles and responsibilities survey to benchmark this year's findings against those from last year. Read the latest findings from our HR careers survey to find out the reasons why HR practitioners entered the profession, the qualifications they hold and the barriers they have experienced in career progression. Reed Business Information XpertHR HR roles and responsibilities: 2015 XpertHR survey 6
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