Most human resources departments opt for formal budgets

Seven out of 10 human resources (HR) departments have a formal budget, and two-thirds have a written strategic plan, research from Personnel Today’s sister publication Employment Review has revealed.

A survey of 151 organisations – together employing 263,000 workers – with a median (midpoint in the range) 467 employees, found that 69% had an HR budget.

This was most common among public sector organisations (88.9%), falling to two-thirds (65.2%) of private sector services companies, and three-fifths (58.8%) of manufacturing and production companies responding to the survey.

Budgets were also more common among larger employers. Just over half (51.3%) of companies with fewer than 250 employees had an HR budget, rising to three-quarters (75%) of those with between 250 and 999 employees and slightly more (77.8%) of those with 1,000 or more.

The HR budget was defined as HR department running costs, including HR salaries and training and information, as well as training and other activities for the organisation as a whole (excluding other staff salaries).

A typical HR department has a running costs budget equivalent to £44,000 for each HR practitioner, where spending on HR activities more widely within the organisation equates to a median spend of £876.19 for each employee.

Smaller organisations spend more than larger ones, and those in manufacturing and production spend more per head than those in private sector services, and still more than the public sector respondents.

The survey also found that whereas there is some evidence that HR departments in the public sector are seeing spending restrictions, there is considerable growth in the private sector, especially among ser­vices companies.

The study also suggested that HR departments have begun the year on an upbeat note, enjoying ever greater levels of influence within their organisations.

For more information, go to www.xperthr.co.uk

Comments are closed.