HR Staff and Structure Results U.S. Human Capital Effectiveness Report 2010/2011. SARATOGA a service offering of PricewaterhouseCoopers, LLP

Transcription

1 Results U.S. Human Capital Effectiveness Report 2010/2011 SARATOGA a service offering of PricewaterhouseCoopers, LLP Survey Period January December 2009

2 SARATOGA a service offering of PricewaterhouseCoopers, LLP 10 Almaden Blvd., Suite 1600 San Jose, CA si@saratoga-institute.com Web site: c 2010 PricewaterhouseCoopers LLP. All rights reserved. PricewaterhouseCoopers refers to PricewaterhouseCoopers LLP (a Delaware limited liability partnership) or, as the context requires, other member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent Please note that your use of this report and its contents is strictly subject to the enclosed License Agreement. Use of this report and its contents constitutes your acceptance of the license terms. If you do not agree to the license terms, follow the directions included in the License Agreement to obtain a refund.

3 Contents HR Headcount Ratio Total HR Headcount Ratio Direct and Indirect HR Headcount Ratio HR Shared Service Center Headcount Ratio HR FTE Ratio Direct and Indirect HR FTE Ratio HR Leadership & Strategy FTE Ratio Benefits FTE Ratio Benefits Strategy and Program Design FTE Ratio Health and Welfare Plans Administration FTE Ratio Defined Benefit Plan Administration FTE Ratio Defined Contribution Plan Administration FTE Ratio Leave Management FTE Ratio Compensation FTE Ratio Recruiting & Staffing FTE Ratio HR Talent Management FTE Ratio Employee & Labor Relations FTE Ratio HR Technology FTE Ratio Workforce Management FTE Ratio Communications FTE Ratio HR Customer Service Center FTE Ratio Business Partners FTE Ratio Field HR & Generalist FTE Ratio Direct HR Headcount Percent Indirect HR Headcount Percent HR Management and Professionals FTE Staff Percent HR Costs per Employee Total HR Costs per Employee HR Costs per FTE Direct and Indirect HR Costs per Employee HR Revenue Percent Direct and Indirect HR Revenue Percent HR Expense Percent

4 CONTENTS 1.34 Direct and Indirect HR Expense Percent HR Leadership & Strategy Function Costs per Employee Served Benefits Function Costs per Employee Served Health & Welfare Plans Administration Function Costs per Employee Served Defined Benefit Plan Administration Function Costs per Employee Served Compensation Function Costs per Employee Served Recruiting & Staffing Function Costs per Employee Served HR Talent Management Function Costs per Employee Served Employee & Labor Relations Function Costs per Employee Served HR Technology Function Costs per Employee Served Workforce Management Function Costs per Employee Served Communications Function Costs per Employee Served HR Customer Service Center Function Costs per Employee Served Business Partners Function Costs per Employee Served Field HR & Generalist Function Costs per Employee Served HR Labor Costs per Employee Served HR Labor Costs as a Percent of Direct HR Costs HR Leadership & Strategy Labor Costs per Employee Served HR Benefits Labor Costs per Employee Served Benefits Strategy and Program Design Labor Costs per Employee Served Health & Welfare Plans Administration Labor Costs per Employee Served Defined Benefit Plan Administration Labor Costs per Employee Served Defined Contribution Plan Administration Labor Costs per Employee Served Leave Management Labor Costs per Employee Served HR Compensation Labor Costs per Employee Served Recruiting & Staffing Labor Costs per Employee Served HR Talent Management Labor Costs per Employee Served Employee & Labor Relations Labor Costs per Employee Served HR Technology Labor Costs per Employee Served Workforce Management Labor Costs per Employee Served HR Customer Service Center Labor Costs per Employee Served Business Partners Labor Costs per Employee Served Field HR & Generalist Labor Costs per Employee Served HR Labor Cost per FTE Labor Cost per HR Leadership & Strategy FTE Labor Cost per Benefits FTE Labor Cost per Health & Welfare Plans Administration FTE Labor Cost per Defined Contribution Plan Administration FTE Labor Cost per Leave Management FTE Labor Cost per Compensation FTE Labor Cost per Recruiting & Staffing FTE Labor Cost per HR Talent Management FTE Labor Cost per Employee & Labor Relations FTE Labor Cost per HR Technology FTE Labor Cost per HR Customer Service Center FTE Labor Cost per Business Partner FTE CONTENTS 3

5 CONTENTS 1.80 Labor Cost per Field HR & Generalist FTE HR Outsourcing Costs per Employee Served HR Outsourcing Costs As a Percent of Direct HR Costs HR Consultant & Contractor Costs per Employee Served HR Consultant & Contractor Costs As a Percent of Direct HR Costs HR Systems Costs as a Percent of Direct HR Costs HR Systems Costs per Employee Served HR Miscellaneous & Overhead Allocations Cost per Employee Served HR Miscellaneous & Overhead Allocations Cost As a Percent of Direct HR Costs Percent of Total Contacts Resolved with First Touch Percent of Workforce on Employee Self Service Percent of Management on Manager Self Service Payroll and Time & Attendance FTE Ratio Payroll and Time & Attendance Function Costs per Employee Served Payroll and Time & Attendance Labor Costs per Employee Served Labor Cost per Payroll and Time & Attendance FTE Cost per Payment Processed Payroll Adjustment Percent Payroll Overpayment Percent Payroll Manual Payment Percent Percent of Workforce on Direct Deposit Learning & Development Staff Ratio Learning & Development FTE Ratio Learning & Development Labor Costs per Employee Served Labor Cost per Learning & Development FTE Learning & Development Investment per Employee Learning & Development Investment per FTE Learning & Development Cost Expense Percent Learning & Development Compensation Percent In-House Learning & Development Investment per FTE External Learning & Development Investment per FTE Classroom-Based Learning & Development Investment per FTE Computer-Based Learning & Development Investment per FTE Learning & Development Cost per Hour Average Learning & Development Sessions Attended per Employee Learning & Development Hours per Employee Learning & Development Hours per FTE In-House Learning & Development Hours per FTE External Learning & Development Hours per FTE Classroom-Based Learning & Development Hours per FTE Computer-Based Learning & Development Hours per FTE A License Agreement 332 CONTENTS 4

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7 1.1 HR Headcount Ratio 1.1 HR Headcount Ratio Definitions Regular Headcount Direct HR Headcount Regular Headcount The average number of non-contingent employees reporting to the organization during the calendar year. Include employees on leaves of absence and disability. Direct HR Headcount The average number of non-contingent HR employees reporting DIRECTLY to the HR function during the calendar year. Include employees on leaves of absence and disability. Saratoga excludes employees supporting learning & development, security, safety functions, payroll, medical & childcare centers, and cafeteria from our definition of HR. Purpose HR Headcount Ratio measures the number of regular headcount employees supported by HR employees who are charged to the HR budget. While this metric can be heavily skewed by organizations that outsource their HR functions, this metric provides insight into the size and support level of HR. Guide Median: The desired guide will differ between organizations. The guide relevant for your organization may be different from our suggestion. We also recommend reviewing metric targets on a regular basis. All Figure 1.1: All All N 10th 25th Median 75th 90th All

8 1.1 HR Headcount Ratio Communications/Media Engineering/Manufacturing Hospitals Insurance Professional Services Public Sector Technology Utilities Figure 1.2: Industry Industry N 10th 25th Median 75th 90th Communications/Media Engineering/Manufacturing Hospitals Insurance Professional Services Public Sector Technology Utilities

9 1.1 HR Headcount Ratio ,000 1,001 2,000 2,001 5,000 5,001 10,000 10,001 25,000 25,001 50,000 50, Figure 1.3: Size Size N 10th 25th Median 75th 90th , ,001-2, ,001-5, ,001-10, ,001-25, ,001-50, ,

10 1.1 HR Headcount Ratio 100 million+ to 500 million 500 million+ to 1 billion 1 billion+ to 10 billion 10 billion Figure 1.4: Revenue Size Revenue Size N 10th 25th Median 75th 90th 100 million+ to 500 million million+ to 1 billion billion+ to 10 billion billion Negative Loss Low (<5%) Medium (5% 20%) High (20%>) Figure 1.5: Revenue Growth Revenue Growth N 10th 25th Median 75th 90th Negative Loss Low (<5%) Medium (5% - 20%) High (20%>)

11 1.1 HR Headcount Ratio Profit Non Profit Figure 1.6: Profit/Non Profit Profit/Non Profit N 10th 25th Median 75th 90th Profit Non Profit None < 5% 11 20% 21 50% More than 50% Figure 1.7: Percent of Unionized Workforce Percent of Unionized Workforce N 10th 25th Median 75th 90th None < 5% % % More than 50%

12 1.2 Total HR Headcount Ratio 1.2 Total HR Headcount Ratio Definitions (Regular Headcount + Contingent Headcount) Direct HR Headcount Regular Headcount The average number of non-contingent employees reporting to the organization during the calendar year. Include employees on leaves of absence and disability. Contingent Headcount The average number of contingent employees reporting to the organization during the calendar year. Direct HR Headcount The average number of non-contingent HR employees reporting DIRECTLY to the HR function during the calendar year. Include employees on leaves of absence and disability. Saratoga excludes employees supporting learning & development, security, safety functions, payroll, medical & childcare centers, and cafeteria from our definition of HR. Purpose New metric for Total HR Headcount Ratio measures the number of headcount employees and contingent staff supported by each HR employee who has costs charged to the HR budget. While this metric can be heavily skewed by organizations that outsource their HR functions, this metric provides insight into the size and support level of HR. Guide Median: The desired guide will differ between organizations. The guide relevant for your organization may be different from our suggestion. We also recommend reviewing metric targets on a regular basis. All Figure 1.8: All All N 10th 25th Median 75th 90th All

13 1.2 Total HR Headcount Ratio Hospitals Insurance Figure 1.9: Industry Industry N 10th 25th Median 75th 90th Hospitals Insurance ,001 5,000 5,001 10,000 10,001 25, Figure 1.10: Size Size N 10th 25th Median 75th 90th 2,001-5, ,001-10, ,001-25, billion+ to 10 billion Figure 1.11: Revenue Size 12

14 1.2 Total HR Headcount Ratio Revenue Size N 10th 25th Median 75th 90th 1 billion+ to 10 billion Negative Loss Low (<5%) Medium (5% 20%) Figure 1.12: Revenue Growth Revenue Growth N 10th 25th Median 75th 90th Negative Loss Low (<5%) Medium (5% - 20%) Profit Non Profit Figure 1.13: Profit/Non Profit Profit/Non Profit N 10th 25th Median 75th 90th Profit Non Profit

15 1.2 Total HR Headcount Ratio None < 5% Figure 1.14: Percent of Unionized Workforce Percent of Unionized Workforce N 10th 25th Median 75th 90th None < 5%

16 1.3 Direct and Indirect HR Headcount Ratio 1.3 Direct and Indirect HR Headcount Ratio Definitions Regular Headcount (Direct HR Headcount + Indirect HR Headcount) Regular Headcount The average number of non-contingent employees reporting to the organization during the calendar year. Include employees on leaves of absence and disability. Direct HR Headcount The average number of non-contingent HR employees reporting DIRECTLY to the HR function during the calendar year. Include employees on leaves of absence and disability. Saratoga excludes employees supporting learning & development, security, safety functions, payroll, medical & childcare centers, and cafeteria from our definition of HR. Indirect HR Headcount The total number of non-contingent HR employees reporting INDIRECTLY to the HR function at the end of each month during the calendar year. Include employees on leaves of absence and disability. Saratoga excludes employees supporting learning & development, security, safety functions, payroll, medical & childcare centers, and cafeteria from our definition of HR. Saratoga defines Indirect HR as staff supporting an HR function that DOES NOT report to HR. Indirect HR employees report to business units or another corporate function. Purpose Direct and Indirect HR Headcount Ratio measures the number of regular headcount employees supported by both Direct HR employees (those charged to the HR budget) and Indirect HR employees (HR shadow support such as staffing occurring in the business line). While this metric can be heavily skewed by organizations that outsource their HR functions, this metric provides insight into the size and support level of HR. Guide Median: The desired guide will differ between organizations. The guide relevant for your organization may be different from our suggestion. We also recommend reviewing metric targets on a regular basis. All Figure 1.15: All All N 10th 25th Median 75th 90th All

17 1.3 Direct and Indirect HR Headcount Ratio Engineering/Manufacturing Figure 1.16: Industry Industry N 10th 25th Median 75th 90th Engineering/Manufacturing ,001 5,000 5,001 10, Figure 1.17: Size Size N 10th 25th Median 75th 90th 2,001-5, ,001-10, billion+ to 10 billion Figure 1.18: Revenue Size Revenue Size N 10th 25th Median 75th 90th 1 billion+ to 10 billion

18 1.3 Direct and Indirect HR Headcount Ratio Low (<5%) Medium (5% 20%) Figure 1.19: Revenue Growth Revenue Growth N 10th 25th Median 75th 90th Low (<5%) Medium (5% - 20%) Profit Non Profit Figure 1.20: Profit/Non Profit Profit/Non Profit N 10th 25th Median 75th 90th Profit Non Profit

19 1.4 HR Shared Service Center Headcount Ratio 1.4 HR Shared Service Center Headcount Ratio Definitions Regular Headcount Total HR Shared Service Center Headcount Regular Headcount The average number of non-contingent employees reporting to the organization during the calendar year. Include employees on leaves of absence and disability. Total HR Shared Service Center Headcount The average number of non-contingent HR employees reporting directly to the HR Shared Service Center function during the calendar year. Include employees on leaves of absence and disability. Saratoga excludes employees supporting learning & development, security, safety functions, payroll, medical & childcare centers, and cafeteria from our definition of HR. Purpose HR Shared Service Center Headcount Ratio measures the number of headcount employees supported by each employee who has costs charged to the HR Shared Service Center. While this metric can be heavily skewed by organizations that outsource their HR functions, this metric provides insight into the size and support level of the HR Shared Service Center. Guide Median: The desired guide will differ between organizations. The guide relevant for your organization may be different from our suggestion. We also recommend reviewing metric targets on a regular basis. All ,000 Figure 1.21: All All N 10th 25th Median 75th 90th All ,054 18

20 1.4 HR Shared Service Center Headcount Ratio Utilities ,000 Figure 1.22: Industry Industry N 10th 25th Median 75th 90th Utilities ,035 1,130 10,001 25, ,100 Figure 1.23: Size Size N 10th 25th Median 75th 90th 10,001-25, ,022 1,130 1 billion+ to 10 billion Figure 1.24: Revenue Size Revenue Size N 10th 25th Median 75th 90th 1 billion+ to 10 billion

21 1.4 HR Shared Service Center Headcount Ratio Negative Loss Medium (5% 20%) ,100 Figure 1.25: Revenue Growth Revenue Growth N 10th 25th Median 75th 90th Negative Loss ,016 1,035 Medium (5% - 20%)

22 1.5 HR FTE Ratio 1.5 HR FTE Ratio Regular FTE Direct HR FTE Definitions Regular FTE The equivalent of one non-contingent employee working 40 hours per week for a total of 2080 hours per year. Part-time employees are converted to full-time equivalents. Exclude time not worked such as vacation, holiday, sick time, and leave of absence. Direct HR FTE The equivalent of one non-contingent HR employee reporting directly to the HR function working 40 hours per week for a total of 2080 hours per year. Include full-time, part-time, exempt, and nonexempt employees. Part-time employees are converted to full-time equivalents. Exclude time not worked such as vacation, holiday, sick time, and leave of absence. Saratoga excludes employees supporting learning & development, security, safety functions, payroll, medical & childcare centers, and cafeteria from our definition of HR. Purpose HR FTE Ratio shows the general quantity of personnel support available, but does not, in any way, indicate the value received from HR staff. There are a number of factors reshaping the HR Department, which are causing shifts in the results of the HR FTE Ratio, and forcing changes to standard results interpretations. On one side, HR Departments are supported by line managers who are increasingly responsible for the delivery of routine HR processes, with outsource agencies and consultants engaged to supplement core staff on an ad-hoc project basis. On the other, HR Functions have been trying to enhance their position in most organizations by attempting to move away from the non value-adding administrative activities towards more strategic, business-oriented services. Since HR leaders often have a problem proving the value of HR, we recommend that clients not look at metrics like HR FTE Ratio in isolation, but also evaluate the value-added aspects of the HR department, and more closely link HR processes to business-related issues. Guide Median: The desired guide will differ between organizations. The guide relevant for your organization may be different from our suggestion. We also recommend reviewing metric targets on a regular basis. All Figure 1.26: All 21

23 1.5 HR FTE Ratio All N 10th 25th Median 75th 90th All Engineering/Manufacturing Hospitals Insurance Utilities Figure 1.27: Industry Industry N 10th 25th Median 75th 90th Engineering/Manufacturing Hospitals Insurance Utilities ,001 2,000 2,001 5,000 5,001 10,000 10,001 25,000 25,001 50, Figure 1.28: Size 22

24 1.5 HR FTE Ratio Size N 10th 25th Median 75th 90th 1,001-2, ,001-5, ,001-10, ,001-25, ,001-50, million+ to 500 million 500 million+ to 1 billion 1 billion+ to 10 billion 10 billion Figure 1.29: Revenue Size Revenue Size N 10th 25th Median 75th 90th 100 million+ to 500 million million+ to 1 billion billion+ to 10 billion billion Negative Loss Low (<5%) Medium (5% 20%) Figure 1.30: Revenue Growth 23

25 1.5 HR FTE Ratio Revenue Growth N 10th 25th Median 75th 90th Negative Loss Low (<5%) Medium (5% - 20%) Profit Non Profit Figure 1.31: Profit/Non Profit Profit/Non Profit N 10th 25th Median 75th 90th Profit Non Profit None < 5% 21 50% More than 50% Figure 1.32: Percent of Unionized Workforce Percent of Unionized Workforce N 10th 25th Median 75th 90th None < 5% % More than 50%

26 1.6 Direct and Indirect HR FTE Ratio 1.6 Direct and Indirect HR FTE Ratio Definitions Regular FTE (Direct HR FTE + Indirect HR FTE) Regular FTE The equivalent of one non-contingent employee working 40 hours per week for a total of 2080 hours per year. Part-time employees are converted to full-time equivalents. Exclude time not worked such as vacation, holiday, sick time, and leave of absence. Direct HR FTE The equivalent of one non-contingent HR employee reporting directly to the HR function working 40 hours per week for a total of 2080 hours per year. Include full-time, part-time, exempt, and nonexempt employees. Part-time employees are converted to full-time equivalents. Exclude time not worked such as vacation, holiday, sick time, and leave of absence. Saratoga excludes employees supporting learning & development, security, safety functions, payroll, medical & childcare centers, and cafeteria from our definition of HR. Indirect HR FTE The equivalent of one non-contingent employee reporting INDIRECTLY to the HR function working 40 hours per week for a total of 2080 hours per year. Include full-time, part-time, exempt, and nonexempt employees. Saratoga defines Indirect HR as staff supporting an HR function that DOES NOT report to HR. Indirect HR employees report to business units or another corporate function. Part-time employees are converted to full-time equivalents. Exclude time not worked such as vacation, holiday, sick time, and leave of absence. Purpose Direct and Indirect HR FTE Ratio measures the number of full-time equivalent (FTE) employees supported by both Direct HR employees (those charged to the HR budget) and Indirect HR employees (HR shadow support such as staffing occurring in the business line). While this metric can be heavily skewed by organizations that outsource their HR functions, this metric provides high-level insight into the size and support level of HR. Guide Median: The desired guide will differ between organizations. The guide relevant for your organization may be different from our suggestion. We also recommend reviewing metric targets on a regular basis. All Figure 1.33: All 25

27 1.6 Direct and Indirect HR FTE Ratio All N 10th 25th Median 75th 90th All Utilities Figure 1.34: Industry Industry N 10th 25th Median 75th 90th Utilities ,001 10, Figure 1.35: Size Size N 10th 25th Median 75th 90th 5,001-10, billion+ to 10 billion Figure 1.36: Revenue Size Revenue Size N 10th 25th Median 75th 90th 1 billion+ to 10 billion

28 1.6 Direct and Indirect HR FTE Ratio Negative Loss Low (<5%) Figure 1.37: Revenue Growth Revenue Growth N 10th 25th Median 75th 90th Negative Loss Low (<5%) Profit Non Profit Figure 1.38: Profit/Non Profit Profit/Non Profit N 10th 25th Median 75th 90th Profit Non Profit

29 1.7 HR Leadership & Strategy FTE Ratio 1.7 HR Leadership & Strategy FTE Ratio Definitions Regular FTE HR Leadership & Strategy FTE Regular FTE The equivalent of one non-contingent employee working 40 hours per week for a total of 2080 hours per year. Part-time employees are converted to full-time equivalents. Exclude time not worked such as vacation, holiday, sick time, and leave of absence. HR Leadership & Strategy FTE The equivalent of one non-contingent employee reporting directly to the HR Leadership and Strategy function working 40 hours per week for a total of 2080 hours per year. Include full-time, part-time, exempt, and nonexempt employees. Part-time employees are converted to full-time equivalents. Exclude time not worked such as vacation, holiday, sick time, and leave of absence. Saratoga excludes employees supporting learning & development, security, safety functions, payroll, medical & childcare centers, and cafeteria from our definition of HR. Purpose HR Leadership & Strategy FTE Ratio measures the number of full-time equivalent (FTE) employees supported by each HR Leadership & Strategy FTE. Saratoga defines HR Leadership & Strategy as Director and above HR employees (e.g., Senior VP of HR) who do not report directly into an HR function as well as management and individual contributors focusing on HR budgeting, workforce and HR surveys, and metrics. Guide Median: The desired guide will differ between organizations. The guide relevant for your organization may be different from our suggestion. We also recommend reviewing metric targets on a regular basis. All 500 1,000 1,500 2,000 2,500 3,000 3,500 Figure 1.39: All All N 10th 25th Median 75th 90th All ,350 3,203 5,684 28

30 1.7 HR Leadership & Strategy FTE Ratio Hospitals Insurance Utilities 500 1,500 2,500 3,500 4,500 Figure 1.40: Industry Industry N 10th 25th Median 75th 90th Hospitals ,294 2,521 6,234 Insurance ,122 1,135 Utilities ,124 4,088 5,732 2,001 5,000 5,001 10,000 10,001 25, ,500 2,500 3,500 Figure 1.41: Size Size N 10th 25th Median 75th 90th 2,001-5, ,006 1,577 3,914 5,001-10, ,054 1,294 2,973 6,371 10,001-25, ,141 2,124 3,759 5,602 29

31 1.7 HR Leadership & Strategy FTE Ratio 1 billion+ to 10 billion 500 1,000 1,500 2,000 2,500 3,000 3,500 Figure 1.42: Revenue Size Revenue Size N 10th 25th Median 75th 90th 1 billion+ to 10 billion ,644 3,047 5,234 Negative Loss Low (<5%) Medium (5% 20%) 500 1,500 2,500 3,500 Figure 1.43: Revenue Growth Revenue Growth N 10th 25th Median 75th 90th Negative Loss ,161 2,448 3,744 8,391 Low (<5%) ,294 2,238 5,908 Medium (5% - 20%) ,122 2,862 4,096 Profit Non Profit 500 1,500 2,500 3,500 Figure 1.44: Profit/Non Profit 30

32 1.7 HR Leadership & Strategy FTE Ratio Profit/Non Profit N 10th 25th Median 75th 90th Profit ,124 3,858 5,732 Non Profit ,102 2,317 5,753 None < 5% 21 50% More than 50% 500 1,500 2,500 3,500 4,500 5,500 Figure 1.45: Percent of Unionized Workforce Percent of Unionized Workforce N 10th 25th Median 75th 90th None ,026 1,551 5,104 < 5% ,102 1,542 4,108 8, % ,318 3,629 5,507 More than 50% ,227 2,305 5,448 5,684 31

33 1.8 Benefits FTE Ratio 1.8 Benefits FTE Ratio Definitions Regular FTE Benefits FTE Regular FTE The equivalent of one non-contingent employee working 40 hours per week for a total of 2080 hours per year. Part-time employees are converted to full-time equivalents. Exclude time not worked such as vacation, holiday, sick time, and leave of absence. Benefits FTE The equivalent of one non-contingent employee reporting directly to the HR Benefits function working 40 hours per week for a total of 2080 hours per year. Part-time employees are converted to full-time equivalents. Exclude time not worked such as vacation, holiday, sick time, and leave of absence. Purpose Benefits FTE Ratio measures the number of full-time equivalent (FTE) employees supported by each HR Benefits FTE. Saratoga defines HR Benefits as employees dedicated to designing and administering benefit programs. While this metric can be heavily skewed by organizations that outsource their HR functions, this metric provides insight into the size and support level of HR. Guide Median: The desired guide will differ between organizations. The guide relevant for your organization may be different from our suggestion. We also recommend reviewing metric targets on a regular basis. All ,100 1,300 Figure 1.46: All All N 10th 25th Median 75th 90th All ,350 1,967 32

34 1.8 Benefits FTE Ratio Hospitals Insurance Utilities ,000 1,400 Figure 1.47: Industry Industry N 10th 25th Median 75th 90th Hospitals ,232 1,597 2,073 Insurance ,135 Utilities ,001 5,000 5,001 10,000 10,001 25, ,100 1,300 Figure 1.48: Size Size N 10th 25th Median 75th 90th 2,001-5, ,169 1,410 5,001-10, ,210 1,595 10,001-25, ,232 2,382 33

35 1.8 Benefits FTE Ratio 500 million+ to 1 billion 1 billion+ to 10 billion ,100 1,300 1,500 Figure 1.49: Revenue Size Revenue Size N 10th 25th Median 75th 90th 500 million+ to 1 billion ,138 1,358 1 billion+ to 10 billion ,508 2,290 Negative Loss Low (<5%) Medium (5% 20%) ,200 1,700 2,200 Figure 1.50: Revenue Growth Revenue Growth N 10th 25th Median 75th 90th Negative Loss ,506 Low (<5%) ,000 1,595 Medium (5% - 20%) ,418 2,073 3,089 34

36 1.8 Benefits FTE Ratio Profit Non Profit ,000 1,200 1,400 Figure 1.51: Profit/Non Profit Profit/Non Profit N 10th 25th Median 75th 90th Profit ,210 3,072 Non Profit ,418 1,740 None < 5% 21 50% More than 50% ,000 1,400 1,800 Figure 1.52: Percent of Unionized Workforce Percent of Unionized Workforce N 10th 25th Median 75th 90th None ,321 1,655 < 5% ,418 1,997 2, % ,216 2,902 More than 50% ,141 1,597 35

37 1.9 Benefits Strategy and Program Design FTE Ratio 1.9 Benefits Strategy and Program Design FTE Ratio Definitions Regular FTE Benefits Strategy and Program Design FTE Regular FTE The equivalent of one non-contingent employee working 40 hours per week for a total of 2080 hours per year. Part-time employees are converted to full-time equivalents. Exclude time not worked such as vacation, holiday, sick time, and leave of absence. Benefits Strategy and Program Design FTE The equivalent of one non-contingent employee reporting directly to the HR Benefits Strategy and Program Design function working 40 hours per week for a total of 2080 hours per year. Part-time employees are converted to full-time equivalents. Exclude time not worked such as vacation, holiday, sick time, and leave of absence. Purpose Benefits Strategy and Program Design FTE Ratio measures the number of full-time equivalent (FTE) employees supported by each Benefits Strategy and Program Design FTE. Saratoga defines Benefits Strategy and Program Design as employees supporting overall benefits strategy for the organization and designing plan provisions and programs (establishing costs of plans and programs, and calculating plan maximums and minimums). While this metric can be heavily skewed by organizations that outsource their HR functions, this metric provides insight into the size and support level of HR. Guide Median: The desired guide will differ between organizations. The guide relevant for your organization may be different from our suggestion. We also recommend reviewing metric targets on a regular basis. All 1,000 1,400 1,800 2,200 2,600 Figure 1.53: All All N 10th 25th Median 75th 90th All ,138 1,937 2,689 4,563 36

38 1.9 Benefits Strategy and Program Design FTE Ratio Utilities 1,000 1,400 1,800 2,200 2,600 Figure 1.54: Industry Industry N 10th 25th Median 75th 90th Utilities 7 1,063 1,105 2,281 2,730 4,827 10,001 25,000 1,000 1,500 2,000 2,500 3,000 3,500 4,000 Figure 1.55: Size Size N 10th 25th Median 75th 90th 10,001-25, ,238 1,270 2,281 3,779 4,827 1 billion+ to 10 billion 800 1,200 1,600 2,000 2,400 Figure 1.56: Revenue Size Revenue Size N 10th 25th Median 75th 90th 1 billion+ to 10 billion ,447 2,421 2,564 37

39 1.9 Benefits Strategy and Program Design FTE Ratio Negative Loss 1,000 1,400 1,800 2,200 2,600 Figure 1.57: Revenue Growth Revenue Growth N 10th 25th Median 75th 90th Negative Loss 5 1,063 1,084 1,301 2,506 2,730 38

40 1.10 Health and Welfare Plans Administration FTE Ratio 1.10 Health and Welfare Plans Administration FTE Ratio Definitions Regular FTE Health and Welfare Plans Administration FTE Regular FTE The equivalent of one non-contingent employee working 40 hours per week for a total of 2080 hours per year. Part-time employees are converted to full-time equivalents. Exclude time not worked such as vacation, holiday, sick time, and leave of absence. Health and Welfare Plans Administration FTE The equivalent of one non-contingent employee reporting directly to the HR Health & Welfare Plans Administration function working 40 hours per week for a total of 2080 hours per year. Part-time employees are converted to full-time equivalents. Exclude time not worked such as vacation, holiday, sick time, and leave of absence. Purpose Health and Welfare Plans Administration FTE Ratio measures the number of full-time equivalent (FTE) employees supported by each Health & Welfare Plans Administration FTE. Saratoga defines Health and Welfare Plans Administration as employees supporting health and welfare benefits enrollment, event change administration, flexible spending account (FSA) administration, COBRA/HIPAA administration, life and premium billing & reconciliation. While this metric can be heavily skewed by organizations that outsource their HR functions, this metric provides insight into the size and support level of HR. Guide Median: The desired guide will differ between organizations. The guide relevant for your organization may be different from our suggestion. We also recommend reviewing metric targets on a regular basis. All 1,600 2,000 2,400 2,800 3,200 Figure 1.58: All All N 10th 25th Median 75th 90th All ,692 2,211 3,214 4,436 39

41 1.10 Health and Welfare Plans Administration FTE Ratio Utilities 1,200 1,600 2,000 2,400 Figure 1.59: Industry Industry N 10th 25th Median 75th 90th Utilities ,244 1,869 2,483 3,073 10,001 25,000 1,500 2,000 2,500 3,000 3,500 4,000 Figure 1.60: Size Size N 10th 25th Median 75th 90th 10,001-25, ,415 1,692 2,514 3,705 4,926 1 billion+ to 10 billion 1,800 2,200 2,600 3,000 3,400 Figure 1.61: Revenue Size Revenue Size N 10th 25th Median 75th 90th 1 billion+ to 10 billion 7 1,186 1,900 2,576 3,298 4,926 40

42 1.10 Health and Welfare Plans Administration FTE Ratio Negative Loss 1,000 1,500 2,000 2,500 3,000 Figure 1.62: Revenue Growth Revenue Growth N 10th 25th Median 75th 90th Negative Loss ,198 2,576 3,186 3,298 41

43 1.11 Defined Benefit Plan Administration FTE Ratio 1.11 Defined Benefit Plan Administration FTE Ratio Definitions Regular FTE Defined Benefit Plan Administration FTE Regular FTE The equivalent of one non-contingent employee working 40 hours per week for a total of 2080 hours per year. Part-time employees are converted to full-time equivalents. Exclude time not worked such as vacation, holiday, sick time, and leave of absence. Defined Benefit Plan Administration FTE The equivalent of one non-contingent employee reporting directly to the HR Defined Benefit Plan Administration function working 40 hours per week for a total of 2080 hours per year. Part-time employees are converted to full-time equivalents. Exclude time not worked such as vacation, holiday, sick time, and leave of absence. Purpose Defined Benefit Plan Administration FTE Ratio measures the number of full-time equivalent (FTE) employees supported by each Defined Benefit Plan Administration FTE. Saratoga defines Defined Benefit Plan Administration as employees who are responsible for pension administration and retiree benefits administration. While this metric can be heavily skewed by organizations that outsource their HR functions, this metric provides insight into the size and support level of HR. Guide Median: The desired guide will differ between organizations. The guide relevant for your organization may be different from our suggestion. We also recommend reviewing metric targets on a regular basis. All 2,000 4,000 6,000 8,000 10,000 Figure 1.63: All All N 10th 25th Median 75th 90th All 12 1,408 2,211 4,177 9,306 13,994 42

44 1.11 Defined Benefit Plan Administration FTE Ratio Utilities 2,000 4,000 6,000 8,000 10,000 Figure 1.64: Industry Industry N 10th 25th Median 75th 90th Utilities 8 1,186 2,129 3,929 9,306 12,163 10,001 25,000 3,000 5,000 7,000 9,000 11,000 Figure 1.65: Size Size N 10th 25th Median 75th 90th 10,001-25, ,737 3,270 4,840 11,762 14,779 1 billion+ to 10 billion 0 4,000 8,000 12,000 Figure 1.66: Revenue Size Revenue Size N 10th 25th Median 75th 90th 1 billion+ to 10 billion 6 1,186 1,823 4,568 12,817 14,779 43

45 1.11 Defined Benefit Plan Administration FTE Ratio Negative Loss 2,000 4,000 6,000 8,000 10,000 12,000 Figure 1.67: Revenue Growth Revenue Growth N 10th 25th Median 75th 90th Negative Loss 5 1,926 2,331 4,728 11,460 12,163 44

46 1.12 Defined Contribution Plan Administration FTE Ratio 1.12 Defined Contribution Plan Administration FTE Ratio Definitions Regular FTE Defined Contribution Plan Administration FTE Regular FTE The equivalent of one non-contingent employee working 40 hours per week for a total of 2080 hours per year. Part-time employees are converted to full-time equivalents. Exclude time not worked such as vacation, holiday, sick time, and leave of absence. Defined Contribution Plan Administration FTE The equivalent of one non-contingent employee reporting directly to the HR Defined Contribution Plan Administration function working 40 hours per week for a total of 2080 hours per year. Part-time employees are converted to full-time equivalents. Exclude time not worked such as vacation, holiday, sick time, and leave of absence. Purpose Defined Contribution Plan Administration FTE Ratio measures the number of full-time equivalent (FTE) employees supported by each Defined Contribution Plan Administration FTE. Saratoga defines Defined Contribution Plan Administration as employees supporting 401(k) administration. While this metric can be heavily skewed by organizations that outsource their HR functions, this metric provides insight into the size and support level of HR. Guide Median: The desired guide will differ between organizations. The guide relevant for your organization may be different from our suggestion. We also recommend reviewing metric targets on a regular basis. All 2,000 4,000 6,000 8,000 10,000 12,000 14,000 Figure 1.68: All All N 10th 25th Median 75th 90th All 12 1,508 2,519 4,894 13,088 14,600 45

47 1.12 Defined Contribution Plan Administration FTE Ratio 10,001 25,000 7,000 9,000 11,000 13,000 15,000 Figure 1.69: Size Size N 10th 25th Median 75th 90th 10,001-25, ,378 7,641 14,149 14,481 14,779 1 billion+ to 10 billion 2,000 6,000 10,000 14,000 Figure 1.70: Revenue Size Revenue Size N 10th 25th Median 75th 90th 1 billion+ to 10 billion 7 1,282 2,036 2,959 14,183 14,779 46

48 1.13 Leave Management FTE Ratio 1.13 Leave Management FTE Ratio Definitions Regular FTE Leave Management FTE Regular FTE The equivalent of one non-contingent employee working 40 hours per week for a total of 2080 hours per year. Part-time employees are converted to full-time equivalents. Exclude time not worked such as vacation, holiday, sick time, and leave of absence. Leave Management FTE The equivalent of one non-contingent employee reporting directly to the HR Leave Management function working 40 hours per week for a total of 2080 hours per year. Part-time employees are converted to full-time equivalents. Exclude time not worked such as vacation, holiday, sick time, and leave of absence. Purpose Leave Management FTE Ratio measures the number of full-time equivalent (FTE) employees supported by each Leave Management FTE. Saratoga defines Leave Management as employees supporting administration of employee leave. While this metric can be heavily skewed by organizations that outsource their HR functions, this metric provides insight into the size and support level of HR. Guide Median: The desired guide will differ between organizations. The guide relevant for your organization may be different from our suggestion. We also recommend reviewing metric targets on a regular basis. All 1,000 2,000 3,000 4,000 Figure 1.71: All All N 10th 25th Median 75th 90th All ,413 2,418 4,073 6,370 47

49 1.13 Leave Management FTE Ratio Utilities 1,500 2,000 2,500 3,000 3,500 4,000 4,500 Figure 1.72: Industry Industry N 10th 25th Median 75th 90th Utilities 7 1,372 1,537 2,476 4,409 6,843 10,001 25,000 1,000 1,500 2,000 2,500 3,000 3,500 4,000 Figure 1.73: Size Size N 10th 25th Median 75th 90th 10,001-25, ,248 2,000 3,568 6,843 1 billion+ to 10 billion 500 1,000 1,500 2,000 2,500 3,000 3,500 Figure 1.74: Revenue Size Revenue Size N 10th 25th Median 75th 90th 1 billion+ to 10 billion ,373 3,436 4,409 48

50 1.14 Compensation FTE Ratio 1.14 Compensation FTE Ratio Definitions Regular FTE Compensation FTE Regular FTE The equivalent of one non-contingent employee working 40 hours per week for a total of 2080 hours per year. Part-time employees are converted to full-time equivalents. Exclude time not worked such as vacation, holiday, sick time, and leave of absence. Compensation FTE The equivalent of one non-contingent employee reporting directly to the HR Compensation function working 40 hours per week for a total of 2080 hours per year. Part-time employees are converted to full-time equivalents. Exclude time not worked such as vacation, holiday, sick time, and leave of absence. Purpose Compensation FTE Ratio measures the number of full-time equivalent (FTE) employees supported by each Compensation FTE. Saratoga defines Compensation as employees supporting compensation strategy, design and administration. While this metric can be heavily skewed by organizations that outsource their HR functions, this metric provides insight into the size and support level of HR. Guide Median: The desired guide will differ between organizations. The guide relevant for your organization may be different from our suggestion. We also recommend reviewing metric targets on a regular basis. All 1,000 1,500 2,000 2,500 3,000 Figure 1.75: All All N 10th 25th Median 75th 90th All ,082 1,683 2,804 3,986 49

51 1.14 Compensation FTE Ratio Engineering/Manufacturing Hospitals Insurance Utilities 500 1,500 2,500 3,500 Figure 1.76: Industry Industry N 10th 25th Median 75th 90th Engineering/Manufacturing 7 1,029 1,640 2,360 3,852 7,299 Hospitals 18 1,001 1,661 2,193 3,849 5,026 Insurance ,005 1,210 1,437 Utilities ,075 1,565 2,067 3,274 2,001 5,000 5,001 10,000 10,001 25,000 25,001 50, ,500 2,500 3,500 4,500 Figure 1.77: Size Size N 10th 25th Median 75th 90th 2,001-5, ,016 1,597 2,204 4,253 5,001-10, ,391 2,445 4,454 10,001-25, ,128 1,439 1,812 3,041 3,702 25,001-50, ,544 1,616 3,037 4,863 7,299 50

52 1.14 Compensation FTE Ratio 1 billion+ to 10 billion 1,000 1,400 1,800 2,200 2,600 Figure 1.78: Revenue Size Revenue Size N 10th 25th Median 75th 90th 1 billion+ to 10 billion ,017 1,619 2,797 3,970 Negative Loss Low (<5%) Medium (5% 20%) 500 1,000 1,500 2,000 2,500 3,000 3,500 Figure 1.79: Revenue Growth Revenue Growth N 10th 25th Median 75th 90th Negative Loss ,557 3,397 3,766 Low (<5%) ,004 1,582 2,059 2,503 Medium (5% - 20%) ,335 2,057 2,903 4,302 Profit Non Profit 1,000 1,500 2,000 2,500 3,000 3,500 4,000 Figure 1.80: Profit/Non Profit 51

53 1.14 Compensation FTE Ratio Profit/Non Profit N 10th 25th Median 75th 90th Profit ,279 1,619 2,739 3,809 Non Profit ,018 1,836 3,576 4,533 None < 5% 21 50% More than 50% 1,000 1,500 2,000 2,500 3,000 3,500 4,000 Figure 1.81: Percent of Unionized Workforce Percent of Unionized Workforce N 10th 25th Median 75th 90th None ,000 1,617 2,209 2,655 < 5% ,218 2,589 3,724 6, % ,391 2,360 3,576 5,833 More than 50% 5 1,018 1,295 1,597 2,745 3,836 52

54 1.15 Recruiting & Staffing FTE Ratio 1.15 Recruiting & Staffing FTE Ratio Definitions Regular FTE Recruiting & Staffing FTE Regular FTE The equivalent of one non-contingent employee working 40 hours per week for a total of 2080 hours per year. Part-time employees are converted to full-time equivalents. Exclude time not worked such as vacation, holiday, sick time, and leave of absence. Recruiting & Staffing FTE The equivalent of one non-contingent employee reporting directly to the HR Recruiting & Staffing function working 40 hours per week for a total of 2080 hours per year. Part-time employees are converted to full-time equivalents. Exclude time not worked such as vacation, holiday, sick time, and leave of absence. Purpose Recruiting & Staffing FTE Ratio measures the number of full-time equivalent (FTE) employees supported by each Recruiting and Staffing FTE. Saratoga defines recruiting and staffing as employees supporting recruitment strategy, design and administration. While this metric can be heavily skewed by organizations that outsource their HR functions, this metric provides insight into the size and support level of HR. Guide Median: The desired guide will differ between organizations. The guide relevant for your organization may be different from our suggestion. We also recommend reviewing metric targets on a regular basis. All Figure 1.82: All All N 10th 25th Median 75th 90th All ,515 53