Believe it or not, this is a hot topic that reoccurs in the HR world on a regular basis. Even scarier is that I’m not sure it is on anyone elses radar.
Take for example a company I recently encountered. They have a ratio of 0.25 (or 1 : 400.) Yikes.
Back when I was taking my first HR Management college course (Thank you University of Richmond and Charlyne Meinhard!) our text book stated that the ideal ratio of HR employees to total employees at the company was 1:100. That was in 2004.
There is now apparently a formula and specifications as to what type of HR employees can count in that ratio. The image, by the way, is a generic equation and not actually for this calculation. 😉 There are also different ideals as to what that ratio should be based on company size (see SHRM chart in same linked article.)
I’ll do you one better. Your industry and the level and amount of technology and/or outsourcing also is a factor. Mike outlines this nicely. Unfortunately I don’t have any handy charts on that – I bet Towers Perrin, Robert Half, the BLS, SHRM, and maybe ADP have that sort of data on hand to create one though. It’s a project I’d love to get my hands on. 🙂 Until that day comes, Ben has a shiny infographic to share.
So, quick and dirty the answer is the typical “it depends” and “you gotta do your homework.” If you want to rely on the 1:100, be prepared to back it up with the C-suite. 😉 With ever increasing technology and the decreasing number of luddites, I would be willing to place a bet that the range is between 1:75 and 1:200. That is a huge range.
By the way, I wrote a best practice for a client that not only covered this topic, but went into the diversification of the HR department (how many need to be generalist vs benefits vs etc.) The information is out there.
What are your thoughts on this hot topic? What ratio (industry/technology/outsourcing/etc) have you found works well and what are the asymptotes that you’d stay away from?