What is the Ideal Size for a Human Resources Department?

The concept of an idea size for a human resources department often results in the use of a ratio system at most corporations.

This ratio system assigns a certain number of employees to each human resources professional, and its overall goal is to make sure that all of a company’s employees have easy and efficient HR access when they have questions about company policies, benefit programs, or any other concerns that might crop up during the typical workday.

Though ratios remain popular, many question their overall effectiveness in ensuring employees access to an HR professional during their time of need.

A Look at Rations: What is the Ideal HR Staffing Level for Today’s Companies?

The HR-to-employee ratio tends to change based on organizational size, and that’s for good reason: While it’s easy for small businesses to allocate very few employees to each HR professional, this would present a significant financial burden for larger corporations. For this reason, companies with 100 or fewer workers have a favorable HR ratio of 2.70:1. This number decreases quickly as the organization grows in size. By the time a company reaches 500 employees, the ratio has already decreased below 1.0. An organization of this size should enforce an HR ratio of roughly 0.82:1, according to many business and HR professionals.

The HR-to-employee ratio decreases even further and more dramatically for companies with thousands of workers. Companies that employ more than 7,500 employees, for instance, should expect to enforce an HR ratio of no more than 0.42:1. This means more than 100 employees would be “assigned” to each human resources expert. Even so, larger companies typically employ far more experienced human resources professionals, allowing them to more easily meet the needs of a larger pool of company employees.

The Controversy: Ratios Aren’t the Only Key to Success

Many contend that a ratio system is simply too basic for the typical organization to enforce. Some companies, especially larger ones, often require a larger number of human resources professionals to make sure the company is compliant with all state and federal regulations governing an organization of that size. The large number of equal opportunity, anti-discrimination, and benefits-related laws that pertain to large organizations may also require a larger number of HR employees than the ratio system would otherwise allot to an organization of vast size and scale.

For this reason, human resources experts advise using ratio systems, and the idea of an “ideal” human resources department, as a basic template and fundamental guideline. Businesses often hinge on the success, expertise, and ongoing education of an excellent human resources department. This means that cutting staff and reducing numbers to meet a ratio could actually lead to significant, longer-term expenses in some cases.

Commit to a Policy of Continual Review and Adjustment

In place of a strict, ratio-centered approach, today’s human resources experts typically recommend a policy of continual review, revision, and reallocation. If the company is rapidly expanding or entering new markets, it might be a good idea to grow the human resources department. This will ensure employee needs are met, company compliance concerns are handled, and regulatory headaches are avoided. Conversely, a more stable company could likely maintain or slightly contract its HR department. Either way, the idea. size for a human resources department depends entirely on a company’s short-term and long-term needs.