HR Efficiency in Question

10:00 am in Latest News by Attractor

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iStock_000001825434XSmallThe government recently published “Putting the Frontline First“, its report setting out action plans to deliver back office efficiency across the public sector.

Data from 155 organisations – mainly those closest to central government – compared the ratio of employees to HR practitioners.

Using this widely-used high-level measure of efficiency, the report suggested public sector organisations were inefficient, showing -

Median HR Ratio Public Sector        1:44
Median HR Ratio Private Sector      1:70

It might be expected that including figures from the wider public sector, local authorities and NHS organisations, would improve the ratios – though there can be no guarantees.

Public sector HR teams covered in the report represented 1.8% of total organisational expenditure. Importantly though, the data doesn’t reveal the organisations’ size, a factor shown to have which has a major impact on such efficiency measures.

Some valuable additional context can be gained from earlier research in the USA which showed, in 2005-06, even greater levels of efficiency in their equivalent public sector bodies -

Median HR Ratio Federal/State Government       1:76
Median HR Ratio Local Government                  1:125
Median HR Ratio Healthcare                            1:125
Median HR Ratio All Employers                         1:90

The same research reported organisations with 2,500+ employees were over three times more “efficient” than those with under 250 people, showing how such measures need to be understood in context.

It might be argued UK public sector “inefficiency” stems from government demands to deliver initiatives to improve and modernise employment practice and contribute to community regeneration goals.

Such initiatives may be peculiar to public sector bodies, though it’s equally possible the additional resources used to meet these challenges are less a factor in high resource levels than a failure to improve and streamline routine working methods.

While benchmarking exercises generate debate about data collection and consistency, there is no doubt they help organisations identify areas where performance levels need some attention.

What are your HR ratios?