SPENDING ON HUMAN RESOURCES REMAINS STEADY IN 2017

By October 3, 2017Blog

Bloomberg BNA has released its HR Department Benchmarks and Analysis 2017 report. Issued annually since 1978, the report reviews human resources executives at organizations of all types and sizes, providing bench-marking data and insights required to plan for the future and manage the function more effectively and strategically.

Much of Bloomberg’s findings reflect that HR, across sectors, is humming along without any major disruptions in technology, strategy and budgets. The median increase in HR funding came in at 3.7 percent in 2017. This bump in HR budgets is modest compared with figures from prior years but resembles the economic recovery itself, which has been characterized by slow but steady expansion and very low inflation.

The report did indicate that HR professionals are spending time on compliance issues like the Affordable Care Act and changes to overtime. Most indicated that they had made changes to internal policies to meet the ever changing requirements of Washington and their state legislatures.

The report provides several other metrics related to HR budgets and expenditures. They include the following:

  • When expressed as a per capita figure, the median amount allotted to HR departments in 2017 looks rather anemic at $1,087 per employee, down from $1,440 in 2016. A possible explanation is that total HR spending has grown modestly, but an expansion of the employee population has driven down the per capita cost of the department’s programs and activities.
  • The median per capita budget figure varies widely across organizations of different sizes, ranging from $594 per employee among the largest organizations (those with 2,500 or more workers) to $2,966 per employee among small establishments (those with fewer than 250 workers).
  • This year’s budget figures show HR salaries pushing higher. The median hike in HR’s staff salary budget is 4.2 percent in 2017, up slightly from 4.1 percent in both 2015 and 2016, and more than a percentage point higher than the figures from 2012 to 2014.

Other findings of this year’s survey include:

  • For the second year in a row, the median ratio of human resources staff to total employee headcount is at an all-time high of 1.4 full-time equivalent HR employees for every 100 workers served by the human resource department.
  • Four in five departments have revised HR policies based on recent legislation, with the most commonly cited changes being due to the Affordable Care Act (62 percent) and overtime rules (48 percent).
  • Nearly two-thirds of departments (63 percent) have their own budgets, and the most prominent line items are benefits, employment and recruiting, training and development, and compensation.
  • The benefits of economies of scale are substantial for HR departments — on a per capita basis, companies with fewer than 250 employees spend six times as much on the HR function ($2,966 per employee) as organizations with at least 2,500 workers ($594 per employee).

The report is based on a survey of nearly 700 human resource professionals representing a broad cross-section of U.S. employers and was released in July.

Leave a Reply

X