Human resources (HR) is one of the business functions that is often neglected. Using Michael Porter's value chain, HR is only a support function. What that means is its activities do not directly affect growth in profits. This is the primary reason why CEOs and Sadly, owners do not think of HR as their priority department.
However, for companies that employ at least 1 HR staff, they are almost always blamed for lack of great talent for the business. When managers don't reach their targets, they will say they didn't have the right people on their team. HR gets the blame.
Everytime there is a "people-related" problem, HR takes the blame for it.
Preliminary Report for the State of HR in the Philippines
We are compiling an industry report for the State of HR in the Philippines. This is only a preliminary report and is not in any way conclusive nor reflective of what's the actual state of HR -- yet. So if you would be so kind as to help us out in gathering more information, that would be awesome.
That said, we found some insight as to how your HR staff should be performing that we just can't wait to share. In the data we gathered, we found that a single HR staff who handles the 7 HR segments can manage 83 employees easily.
7 HR Segments
Depending on where you are looking at, you will end up with 5-8 different HR segments. These segments are the different realms (groups / topics / buckets) that HR performs in any company. In our case, we decided to use 7 segments instead:
- Talent Acquisition (e.g. recruitment, interviewing)
- Onboarding (e.g. orientation, tools, culture)
- Training (i.e. making sure the person continuously has the right skills for the job)
- Employee Engagement (e.g. rewards and recognition)
- Performance Management (e.g. evaluation, succession planning, retention)
- Compensation and Benefits (e.g. payroll, government contributions)
- Labor Relations (e.g. legal cases)
You'll hear more about these segments in the future as we will be tackling them all here in our blog and across our digital properties.
HR Staff to Number of Employees Ratio
The average ratio between HR staff to the number of employees of the company is 1:83.
What this means is that your HR staff should be able to handle approximately 83 employees well while offering the 7 HR segments mentioned above. Now, the HR staff doesn't have to be well-versed in all segments. They just have to be knowledgeable enough to be able to offer advice to the employee, the manager, or the owner on issues surrounding the different segments.
Another way to look at this ratio is in terms of capacity and benchmark. Your HR staff should be able to manage the 83 employees easily. Admittedly, industries might play a factor here and might affect that ratio. But we'll get to that when we break down the data we have gathered.
For now, if your HR staff is already struggling to cope with the demands of 50 employees, then that is a sign that your HR staff might not have the skills that is at par with the market. On the other hand, if your HR staff can handle over 100 employees, then that is a sign that he / she is a keeper.
What's Next For You?
It's time to evaluate your HR department to see if they are supporting the business achieve its goals. Again, our preliminary results show that 100% of businesses' goal for 2016 is to grow their revenues. Your HR department, given that they are support functions should be evaluated against whether or not they help you achieve your goals.
If they aren't, and are only slowing you down, you might be better of with changing your HR with a more competent one. Another option is to completely outsource this function to 3rd party providers.
You already have a benchmark to see how many employee to HR staff is optimum. Use it to your advantage.
The State of HR in the Philippines
Of course, on our end, we still have to gather more data to show the real state of HR in the Philippines. As a foresight of what to come, that report will include what was shared above segmented into geographic location, indsutry, and many more.
Right now, we'd greatly appreciate it if you can help us spread the word out on this report we are compiling. As an added treat, if you participate in our survey, we'll send the report to you ahead of everyone else.
In addition, depending on how much data we gathered on your industry, we will pick a random winner (or two) and look at the company, compare it across the industry, and even provide recommendations based on the insights we gathered to help you with your business.