HR FTE Ratio
2022 National Average Value
84
What is the HR FTE Ratio?
The HR FTE Ratio is a metric used to determine the efficiency, effectiveness, and relative cost of an organization's HR department. It reports the ratio of the total number of full-time equivalent employees (FTEs) in the organization to the number of HR FTEs. For example, if the HR FTE Ratio is 84, then there is one HR FTE for every 84 employees.
What is the average value of HR FTE Ratio?
According to the Saratoga Workforce Index, the national average HR FTE Ratio in 2022 was 84. The HR FTE Ratio varies widely across industries but has only moderate variance relative to headcount or revenue for companies with more than 1000 employees.
What is HR FTE Ratio by industry?
The HR FTE Ratio varies widely across industries. According to the PwC’s Saratoga HR and Workforce benchmarking studies, the median HR FTE ratio varies from 50 to 120 across industries, with the national average being 84. If you need the HR FTE ratio for your industry, please contact the Saratoga team.
Where can I get HR FTE Ratio benchmarks?
The annual Saratoga HR and Workforce Benchmarking Study releases the HR FTE ratio benchmark for over 20 different industries each year. The national average is released as part of the annual Saratoga Workforce Index.
How is HR FTE Ratio calculated?
The HR FTE Ratio is the ratio of non-contingent FTEs to HR FTEs. It includes prorated individual contributors and management supporting benefits, compensation, employee/labor relations, diversity, equity and inclusion, global mobility, talent acquisition and staffing, workforce management, communications/change management, HR customer service center, HR talent management, HR technology, people analytics, HR leadership & strategy, field HR & generalist, mergers and acquisitions (HR), and business partners. It excludes those supporting Learning and Development, security, safety functions, payroll, medical and childcare centers, and cafeteria.
What does a low HR FTE Ratio mean?
A low HR FTE ratio compared to industry benchmarks can also have several implications for an organization. It may suggest that the organization has a smaller HR team relative to its size or complexity. This could result in challenges in effectively managing HR functions and meeting the needs of employees. However, a low ratio might indicate that HR processes are highly streamlined and efficient, leveraging technology and automation to reduce the need for additional HR staff. It is important to confirm that the organization's HR team is adequately resourced to handle workload and provide necessary support. A low HR FTE ratio could also indicate a lack of strategic focus on HR, potentially leading to missed opportunities in talent management, employee engagement, and organizational development. It is crucial to assess the reasons behind the low ratio and confirm that HR functions are appropriately supported to meet organizational needs.
What does a high HR FTE Ratio mean?
A high HR FTE (Full-Time Equivalent) ratio compared to industry benchmarks can have several implications for an organization. It may indicate that the organization has a larger HR team, potentially due to factors such as a larger workforce or complex HR processes. This could suggest inefficiencies in HR operations, such as redundant roles or excessive administrative tasks. Additionally, industries with specific compliance or regulatory requirements may require a higher HR FTE ratio. Lastly, a higher ratio might reflect a strategic focus on HR, where the organization considers HR functions critical to its success. It is important to analyze the underlying reasons and implications of the higher ratio to confirm optimal HR resource allocation and efficiency.
What other benchmarks are relevant to HR FTE Ratio?
Other relevant benchmarks include Time-to-fill, L&D investment, turnover rate, HR cost per employee, HR technology adoption, and many diversity and inclusion metrics. The Saratoga annual benchmarking study provides data for over 1000 different HR metrics. Contact us to learn more.
About the Saratoga Workforce Index
The Saratoga Workforce Index is an indispensable reference of national averages of 30 commonly requested HR metrics. Based on PwC Saratoga’s annual workforce benchmarking study of over 1000 metrics spanning hundreds of companies and over 20 industries, the Saratoga Workforce Index is your “quick start” guide to workforce benchmarks.
Download the guide to see the national averages for all of these:
- 90 Day Total Turnover Rate
- Average Number of Direct Reports
- Cost per Hire
- Director Headcount Ratio
- Executive Headcount Ratio
- Finance FTE Ratio
- First Year of Service Turnover Rate
- General & Administrative Function Voluntary Separation Rate
- Hire Rate
- HR FTE Ratio
- Information Technology FTE Ratio
- Labor Cost Revenue Percent
- Layers
- Learning & Development Investment per Employee
- Legal FTE Ratio
- Management Headcount Ratio
- Manager Headcount Ratio
- Offer Acceptance Rate
- One to Three Years of Service Voluntary Separation Rate
- Promotion Rate
- Racial/Ethnic Minority Headcount Percent
- Racial/Ethnic Minority Promotion Rate
- Racial/Ethnic Minority Voluntary Separation Rate
- Revenue per FTE
- Time to Accept
- Time to Start
- Turnover Rate
- Vacancy Rate
- Voluntary Separation Rate
- Women Executive Headcount Percent
- Women Headcount Percent
- Women Promotion Rate
- Women Voluntary Separation Rate
Need industry-specific benchmarks?
We provide these values as a reference point for discussions. However, given the high variance across industries, sizes and revenue, these national averages should NOT be used to make important business decisions or used in any formal reporting.
If you intend to use benchmarks for business decisions, please join Saratoga as a full member so you can have access to more specific comparison groups for each industry, revenue, size, profit/non-profit status and more. With a full membership, you’ll have access to over 1,000 metrics that are much more accurate and specific than a national average. The membership process is relatively simple, mostly automated and reasonably priced with a clear ROI.
Referencing Saratoga Workforce Index Data
If you choose to refer to these metrics in any of your materials, whether internally or externally, we ask that you include the following statement:
Excerpted from the Saratoga Workforce Index. © 2023 PricewaterhouseCoopers LLP, all rights reserved. Data is for discussion purposes only and cannot be used for investment decisions or financial evaluations.
You may include up to five metrics in any internal or external publication without any additional permissions. Contact us at saratoga@pwc.com if you want to use more than five or would like to reproduce the Saratoga Workforce Index in its entirety.
About Saratoga
Saratoga workforce and HR benchmarks provide reference points for executive-level discussions, context for people dashboards, and data to inform workforce and HR decisions. Hundreds of companies across over 20 industries trust Saratoga each year to supply over 1,000 validated workforce benchmarks around turnover, diversity, staffing, productivity, efficiency, fairness, and more.
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