Copyright © 1999-2009, Ethan A. Winning. All Rights Reserved (and that includes the Indian Express Group which plagiarized this article in 2000)
Numerous (i.e., more than six) persons have asked, "What is the ratio of HR to numbers of employees in a company?" Others have started their questions with, "How many employees does it take ...," and I've mentally added, "to screw in a light bulb" But these are serious questions probably stemming from overworked HR and other types of managers and supervisors, and I will attempt to give them a serious response although I'll tell you straight out that there is no definitive answer.
Last weekend while walking our chief dogma officer, out of the deep, dark recesses (we're talking 40 years here) of my mind came the name Graicunas and the concept of "span of control." Unfortunately, I cannot find my notes, but the following recollection is going to be pretty close. What Graicunas' Law said was that the optimum number of subordinates that a supervisor could oversee was 16 on an assembly line and four or five in other forms of work.
Give Graicunas some credit, regardless of how wrong this may be. He wrote about this in the early 1910's, long before the Gilbreths and the Western Electric studies done by Roethlisberger and Dickson, hence, long before the decades of "efficiency experts" and just at the beginnings of time and motion studies (which really started with F. W. Taylor's "Scientific Management" of the late 1800's). I am not dropping names just to show that my long-term memory hasn't deteriorated. I think that anyone involved in management should read the writings of Frederick W. Taylor (published just before his death in 1911 - that was to show that my memory is intact), and get hold of a copy of Management and the Worker by Roethlisberger and Dickson which was published in 1938 and is still in print. Those works are representative of the whole century's evolution of management theory.
Now, back to what is the ratio of numbers of employees to the HR Department. While the figure has been between 1:100 and 1:150 for the past decade, and CCH reported a drop to 1:96 in 1999, I doubt that you can use these stats for a realistic assessment of the ratio in your company. I know of companies with over 300 employees and only one person in HR, and I know of several with fewer than 100 employees with three people in HR or "administration."
Therefore, when you are dealing with a quoted ratio of 1:100, you are really dealing with averages, and averages are very misleading and statistically insignificant except to the one employee trying to talk management into hiring some help. But this is still like the guy with his head in the refrigerator and his feet in the oven, and on average, he feels fairly comfortable. In more dangerous situations, it's analogous to the guy who downed in a stream that average four feet deep.
There are simply too many factors to determine what the ratio is or how many employees it takes to do a certain task or perform a function. For the HR Manager with no assistance or assistants, here are some questions which must be asked first:
1. How many HR functions are outsourced? Payroll? Insurance benefits? Employment taxes? Quasi-legal elements?
2. What tasks are involved in the HR function? In many companies, HR has been reduced to a recruiting element and not much more. In others, HR is the record-keeping, the mediator and counselor, the department which formulates, established, and maintains policies and procedures.
3. What tasks has HR taken on that are nonessential or do not belong in HR? What I'm addressing here are the HR people who have become the cruise directors for the company, more concerned with what to call employees, what "prizes" to give out on the 10th anniversary of some employee, or how to organize the company picnic and Christmas party. If you happen to be one of those managers who took on such responsibilities, then don't ask about ratios. Ask about how to foist these responsibilities on some other unsuspecting manager, and then see how much work you can get done. Or ask for an assistant who can take on the social aspects of company functions. Even the White House has a Director of Protocol.
Unlike Graicunas' Law, we're not addressing how many persons can be supervised, but how many employees need to be in HR to minister to how many employees. Therefore, we have to ask how many personnel functions are the department managers responsible for? If the accounting, sales, production, manufacturing, whatever department manager is supposed to be counseling, training, and mentoring employees, keeping track of vacation and sick leave, ensuring that reviews are done on time, and so on, then that limits what the HR manager has to do. The HR manager is not a manager of managers or supervisors in smaller companies. It's a job which relies on those outside the department and the company (such as the insurance broker, the corporate counsel, etc.) to get their jobs done and, because of that, the ratio can indeed be as high as 1:150.
If we were to take Graicunas' Law and somehow rework it to include the span of control over functions or tasks, there might be a greater opportunity for some to increase the size of the staff of HR. Even then, some HR managers are more adept at juggling many varied responsibilities than others. In the past, HR was inundated with paperwork. If I was an HR manager today, I think that, even before trying to get more employees into my department, I'd try to computerize as much of the function as possible. Of course that means mastering so much more software, software usually not developed by anyone in HR, but it is amazing to look back and see how much more productive we are today than we were a decade or, better, two decades ago when an electric typewriter - maybe one with correction tape! - was our only "automation."
In fact, the HR manager today may be both the victim and recipient of the benefits of the Information Age, but whether victim or recipient, I would tend to disagree with CCH's current ratio. If anything, perhaps the ratio is more like 1:200. Doesn't it really depend on what the demands of the 200 on HR are and what the physical capabilities (i.e., hardware and software) are? If all I've got are 200 people who want to know how much vacation they've accrued, how much sick leave they have left, or why their last paycheck didn't show overtime, not only can I handle that, but I'd put part of that responsibility on their direct supervisors. On the other hand, if I've got 30 people who are threatening a claim of discrimination and hostile work environment harassment, then I would probably want and need others in the department to perform other functions which I won't be able to handle for some time.
There was once a psychologist...name of Miller I think...who, as Graicunas, tried to quantify the perhaps unquantifiable: how many things could an individual keep track of at a given time. I think he came up with five as the answer, but this is really vague...since I had six other things going at the time.
The current day answers to Graicunas and Miller are the same as they are to people who ask, how many people does it take... or what should be the ratio? It's largely situational, often mechanical, and dependent upon the talents of those asking the questions. As anyone who's worked in a research lab knows, the ratio of managers to scientists would be 0: infinity since no one can manage a scientist. If that doesn't strike you as quite right, think about a hospital with 200 physicians. Even 200 people in HR, or 1:1, would rarely do the trick. Hold on a sec. Actually, since only two of the physicians would even know what to ask HR or where HR is located, we're back to 1:100. See. Situational!