Companies Spending More on HR

06.29.2011
HR & Safety

U.S. organizations are reinvesting in human resource (HR) services and staffing following the economic downturn of the past three years, according to findings by research and consulting firm Bersin & Associates.

Organizations have increased their HR budgets by 1.4 % over last year, with current HR spending now at $1,218 per employee. Some of these funds went to hire additional staff, as HR head count increased an average of 1.8% this year.

Most organizations focused investments on core services such as compensation, benefits, payroll and employee relations, which accounted for about 60 cents of every HR dollar. Approximately one-third of the HR budget went to talent management, as organizations invested more in recruiting and development initiatives.

On average only about one in 10 HR dollars went to “strategic” HR services, which include employee engagement, workforce planning and measurement, and wellness programs. Organizations with more mature HR functions spent two to three times as much on these initiatives.

Organizations at all levels are now talent-constrained and business leaders want to reengage their workforces to drive innovation and execution, says Bersin. Human resource teams are being asked to step up their game by:

  • creating more innovative recruiting programs
  • leveraging the power of social networking for internal and external communications
  • developing emerging leaders
  • helping the organization mobilize talent to take advantage of global business opportunities

These are urgent business problems that require greater investments in HR.

The research, conducted in partnership with Human Resource magazine, is based on a study of nearly 300 U.S. HR professionals and a series of in-depth interviews. For more information: www.hreonline.com/HRE/story.jsp?storyId=533338466

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