Very small businesses can get away with having no HR department. A manager who has 6 employees on his books should be able to cope without needing an assigned HR member of staff.
However, what is the number of HR staff needed for your business? Many like to throw out random, seemingly arbitrary, figures. For example, one ratio I have heard a lot is: one HR professional per hundred employees. Which is fair enough, but has never actually been explained.
It can depend on what tools you have in your HR systems. An HR department that has a well-equipped HR toolkit will be much more efficient than one which is relying on outdated means of managing employees.
An SHRM Human Capital Benchmarking Study has found that the number should not be as arbitrary as “one per hundred” but have an established ratio based on; time required for each employees’ paperwork, how many requests and enquiries you receive from the average employee and how many hours the average HR employee works in a month.
The equation of how to work out how many members of staff is very simple:
(Number of employees ÷ 100) x employee ratio number = the number [once rounded up] of HR staff you should have at your company
Here’s the guide for what your employee ratio number will be depending on the size of your business.
|Number of employees||Employee ratio number|
|250 – 499||1.07|
|500 – 999||0.82|
|1,000 – 2,499||0.79|
|2,500 – 7,499||0.53|
Source: SHRM Human Capital Benchmarking Study
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