Benchmarking Report
HRIS Budgets and Staffing in Large Corporations
Research approach:
The research was conducted in 2003 and 2004. We limited the sample to large companies in manufacturing, communications, and utilities. There were no services sector companies in the sample. We have compared our findings to some public available benchmarking data to validate our general findings. For consistency purposes we focused solely those companies that use SAP, Oracle, and PeopleSoft as an HRIS platform. Responding companies felt their systems were at least current or state of the art. The companies from the survey respondents analyzed in the benchmark ranged in size from 10K – 170K employees and had HRIS budgets between $3 and $12 million.
We received data from smaller companies, but found that companies responding with fewer than 10 thousand full time employees differed sharply from their larger counterparts and from one another. They had to provide the same services for fewer employees, thus, their per capita costs and staffing ratios tended to be sharply higher. Companies operating on legacy systems, who relied on the IT department for operations and maintenance, provided less programming staff, and seemed to have fewer employees dedicated to support HRIS.
Following are highlights of our findings.
Key Findings:
HRIS Staffing:
A benchmark company with more than 10,000 employees would have on average:
- One HRIS staff per every 1,000- 1,250 FTE’s in the company. This did not seem to vary by industry.
- HRIS group was likely to have more staff per employee served if:
- It was in the midst of a roll out or adding capabilities
- It supported it’s own data center
- It ran payroll, benefits, a portal, and support for queries.
- It had low-cost offshore programming.
- HRIS group may have fewer staff per number of employees if:
- It supported a very large population
- It had no responsibility for running payroll, benefits, a portal, and support for queries.
- HRIS staff is about 14% of total HR staff.
HRIS Staff distribution:
As far as functional responsibilities of HRIS, we asked for headcount (including fractions) of people performing key functions. Our respondents indicated they had little difficulty in reporting their staffing this way.
Following is the HRIS employee deployment by functional area as a share of the total number of staff:
Functional area |
% total HRIS employees: |
Business analyst |
19% |
Application development |
30% |
Web & Portal |
8% |
Customer Service |
12% |
Database administration |
5% |
Network & Security |
10% |
User reporting |
6% |
Management |
9% |
Other |
2% |
Please note, that the total adds up to 101% due to rounding.
This percent was obtained by taking the total number of employees from the responding companies and seeing what percent of the total were deployed in each task area. We also looked at the average of averages, i.e. percent of people doing tasks within each company, without seeing a substantial difference in the ratios.
However, in practical terms, there was substantial variation among companies in terms of whether or not they supported key functions within their HRIS functional responsibility. That is:
- if HRIS is responsible for supporting portal and websites, that typically requires two or three people, or even more to do the job.
- HR analytics and Reporting requires at least one FTE to be done effectively.
- Running operations within a separate data center can be done by shared responsibility among several people, but it still requires at the minimum two or more FTE’s.
HRIS Budget:
- HRIS budget is approximately 17% of total HR budget
- HRIS spend per FTE in the system is about $240
Most respondents were not able to report what their overall corporate IT budgets were, or what percent their budget was of the corporate IT budget. However, by extrapolation from other research studies of IT budgets in comparable companies, the HRIS budget appears to be a very small fraction (less than 3%) of overall corporate spending on technology support.
In summary:
While HRIS is a critical component of how well HR departments can deliver their services today, it is very difficult to benchmark what constitutes a good level of spending or staffing in this area. Previous studies by our own team and others show that budgeting and getting approvals for new spending in HRIS is an uneven process at best, even year to year in the same company. As we drilled down in conversations with respondents and others, we noticed variations in:
- service levels and how internal charges for support are allocated.
- how HRIS is capitalized or what percent represented amortization.
Some respondents are beginning to look offshore, especially to India for lower cost programming resources. Those who have tried it report high level of satisfaction for the price.
Given these caveats we can say with considerable assurance that any large company (10,000, or more) could be considered under-resourced:
- with fewer than one HRIS headcount to support 1100 FTE
- with a spend of under $240 per employee
- if they lack access to specific capabilities in development, web support, database, and operations.
Companies with these minimum thresholds should be able to build a strong benefits case for additional resources based on leveraging the investment in place.
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