Why Your Company Should Outsource HR Functions
Discover the benefits of outsourcing HR functions, how outsourcing HR functions can boost your company's efficiency, & why it's a strategic move for...
It’s hard to know how big your HR team size should be, especially when there are no clear answers. Start by determining your necessary HR tasks.
The human resources (HR) team is responsible for various tasks, from recruiting and onboarding new employees in a company to managing payroll and benefits. But how big should this team be, especially if you are a smaller business? There is no one-size-fits-all answer, as the ideal HR headcount will vary depending on the size and needs of the organization.
Stacey Gibson, Director of Human Resources at Stratus HR breaks down everything you need to know about how big your HR team should be.
With over 20 years in business, we know a thing or two about HR. Our experts have listed the reasons behind these numbers and how it impacts your business.
While we don’t have a direct answer to the exact size, we can offer guidelines that can help you determine what works best for your business. You can use a ratio, which should be proportional to the employees in a company. For example, a company with 100 employees may have a team of five HR professionals, while a company with 1,000 employees may have a team of 10-15 HR professionals. Keep in mind that if your HR team is too small, they will be overwhelmed and unable to keep up with the demands.
Ultimately, the ideal HR headcount size will vary from one organization to another. The best way to determine the right team size for your company is to assess your needs and ensure the team can handle the workload.
To find out where your business stands and how many HR team members you should employ, check out our calculator.
The first step in determining the HR ratio that works for your company is to list all the jobs that need to be done. Common HR jobs include:
Small businesses usually provide only the most essential human resources services to lower the HR headcount. However, economies of scale favor large companies, so even when cutting back, small businesses still need a higher HR ratio of staff to employees.
Society for Human Resource Management suggests the following staffing levels for HR departments:
These estimates are based on the average human resource department size as a percentage of the total workforce. A company with a more intricate organizational structure may need a larger HR department than the suggested number to manage all HR tasks effectively.
For smaller businesses, this could be a choice between securing the engineer who can make vital adjustments to their company's next major product launch. Or they could choose to employ a skilled HR professional who can supervise compliance, handle all staff issues, boost morale, recruit and retain your top talent, and help you find a desirable benefits package.
It’s important to understand where costs come from so that you can keep HR manageable for your small business. The main categories that make up HR costs are salaries, benefits, training, development, and compliance.
Of these, salaries and benefits make up the largest portion. To reduce these costs, you can be strategic about hiring and offer competitive salaries and benefits packages. You can manage training and development costs by ensuring that employees are properly trained and that they have the opportunity to develop their skills. And by staying up-to-date on employment laws, you can ensure that all HR policies and procedures are compliant to minimize compliance costs.
Managing these items can be daunting and expensive for small businesses. Luckily, there are ways to keep costs manageable by outsourcing your HR. Here are four tips to help you do just that:
There are various software systems available that can help small businesses with their HR needs. By using one of these systems, you can automate many of the tasks that would normally be done by an HR person, such as tracking employee vacation days and creating performance reviews. This can save you a significant amount of money in HR costs.
One of the most time-consuming and expensive aspects of HR is payroll. Luckily, some companies will handle all of your payroll needs for a reasonable fee. This can free up time to focus on other aspects of your business.
If you don't have the time or resources to manage your HR needs on your own, consider hiring an HR consultant. These professionals can help you with various tasks, such as creating employee handbooks and developing training programs. Hiring an HR consultant can reduce costs while getting the expert help you need.
Various online HR resources can provide templates for employee handbooks, job descriptions, and more. An online HR resource can save time and money while getting the HR help you need.
Stratus HR is a PEO built for and by HR professionals. We combine software made to make your life easier with a team of HR experts ready to offer support and consulting. With Stratus, you can minimize time spent doing administrative HR work and create time in your day to focus on important people work, like employee engagement.
To learn more about how we can support your HR team and help fill in the gaps, book a free consultation with us today.
Discover the benefits of outsourcing HR functions, how outsourcing HR functions can boost your company's efficiency, & why it's a strategic move for...
Is it time for your business to outsource HR? Here are 8 reasons why you should consider making the shift now.
Do you spend more hours in a day responding to employee questions and concerns than you do building your business? You may want to outsource...