PSG Global Solutions

HR Staff Employee Ratio Research

Situation
The employee count of PSG is rapidly expanding.
Cause
Thus, a need to increase HR Support staff to serve the growing numbers arises.
Action
In order to determine and address the exact number of Staff needed, several reference studies/surveys
were compared with data from PSG.
Results
Assessment through survey comparison.
Based on SHRM Human Capital Benchmarking Study (2009 Executive Summary) for an organization of
490 employees (estimated PSG amount) a median of 4.949 HR FTEs are needed.
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Table 1
Table 1 shows the data gathered by the SHRM Study into a generalized summary of HR to Employee
ratios. The small n is the total number of organizations in that category that are included in the study.
25
th
Percentile shows the ratio for organizations in the lower quarter of the ratio list. Meaning that on
the list based on increasing amounts of HR staff in relation to employees, these organizations are the
lower fourth, or have the least amount of HR staff to serve a set number of employees. The opposite is
true for the 75
th
Percentile which instead shows the ratios of the higher fourth of organizations that
have a higher amount of HR staff to serve a set number of employees. The Median is the ratio found in
the middle. This is not to be confused with the mean that averages everything. The Median shows
the ratios for organizations found in the middle of the ratio list. This is in respect of their Organizational
sizes (amount of FTEs, to be found first column).
The table clearly shows a decrease in the amount of HR staff ratios as the Organizational size increases.
However it should be stressed that Organizational size does not mean the exact number of Employees in
the organization, but the number of FTEs. An FTE (Full Time Equivalent) just means that two part time
employees (half work time) are counted as one full time employee. Technically, an FTE is the equivalent
of one regular employee working 40 hours per week for a total of 2080 hours per year. Part-time
employees are converted to full -time equivalents .The FTE rule also applies to HR staff, so the
computed ratio (4.949 HR FTEs) means that median organizations for that FTE bracket usually have a 4
or 5 man full time HR staff.
Also, the organizations included vary greatly in nature generally and in their HR department. For PSG,
Recruitment is separated and Payroll is outsourced, so the remaining workload for the HR Admin and
Support Services should decrease. However, considering the high attrition rate and onboarding of new
hires (a normal occurrence for BPO and RPO based industries), workload will increase. Another
consideration would be that the OD functions are fused with the HR.
Using the standard computation for getting the ratio, the current ratio for PSG HR staffing is 0.612
( )
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3 HR FTEs are the 2 full time HR and 1 FTE for Interns. 2 more FTE equivalents are necessary to hit the
median ratio of approximately 1.
Adding to this, the Institute for Corporate Productivity (i4c p), made a similar research and came up with
the following table.
63
75
?
0
50
100
150
200
2012 2013 2014

Table 2
Table 2 shows trends based on organization size, with the corresponding ratios of organizations of that
size, after they are categorized into high and low performing organizations.
With low organizational sizes, it seems that a higher ratio is desired, but this trend reverses after around
the 10,000 employee mark. For PSG with 490 employees, its ratio of 0.612 appears to be very low even
compared to the low performer ratios.