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Hrexecutive
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HR efficiency benchmarks: the key to boosting business outcomes
- HR leaders are facing challenges in balancing growth expectations with conservative HR budgets, with fewer planning to increase budgets and more planning to cut spending.
- Efficiency benchmarks are crucial for HR leaders to prioritize investments and ensure performance aligns with strategic priorities and business impact.
- Key metrics like HR spend as a percentage of revenue, HR spend per employee, and HR productivity ratios provide insights into HR efficiency.
- Comparing HR spend as a percentage of revenue and operating expenses reveals investment levels relative to organizational performance.
- HR spending by employee and activity area, such as recruitment, total rewards, and learning and development, indicates HR investment focus.
- HR functions deploy one HR full-time employee per 58 employees on average, with staffing, recruiting, and administration being common areas of focus.
- To improve HR efficiency, leaders can leverage HR technology, transfer tasks to shared services, and focus on strategic value over transactional activities.
- Using benchmark data, HR leaders can engage with CEOs and CFOs to reassess priorities, evaluate HR performance, and align HR initiatives with business objectives.
- Quality peer group benchmarks are valuable for evaluating functional spending, staffing, and securing funding for essential HR investments.
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