Bersin by Deloitte Research: US HR Organizations Spending Increases, Following a Rise in Employee Turnover

Technology and staffing represented the two biggest spending items in 2014, shows findings of Bersin by Deloitte's HR benchmarking study

14 Jan, 2015, 13:04 ET from Bersin by Deloitte

OAKLAND, Calif., Jan. 14, 2015 /PRNewswire/ -- US human resources organizations increased spending on talent initiatives in 2014, following a rise in employee turnover to 20 percent in 2013 – up from 17 percent in 2010, according to new research from Bersin by Deloitte. The research findings appear in "HR Factbook 2015: Benchmarks and Trends for U.S. Organizations," Bersin by Deloitte's interactive HR benchmarking study.

Summarized in a complimentary WhatWorks® Brief, the findings show that HR budgets rose an average of 4 percent to $2,936 per employee in 2014. Staffing and technology were the two biggest spending items for the year, with HR staffing up 3 percent on average and one in five organizations citing "technology" as the biggest area for increased investment. The new research provides key benchmarks and guidance to help human resources teams make valuable investment decisions.

"With the possibility of greater employee attrition on the rise – helped in part by the economic recovery and greater job opportunities – high-impact HR organizations are realizing that employee engagement means connecting with employees more often than once or twice a year through a survey," said Karen O'Leonard, vice president, benchmarking and analytics research, Bersin by Deloitte, Deloitte Consulting LLP. "These organizations typically invest more in HR programs and services, and the investment pays off in better talent outcomes."

The study findings also show that:

  • HR organizations at the highest level of maturity spend more than their peers. Mature HR organizations – those with HR functions integrated into the business – spend $4,434 per employee on average, compared with just $2,112 among those at the lowest level of maturity, which tend to have compliance-driven HR functions.
  • Mature HR organizations have more staff and less involuntary employee turnover. HR departments that are business integrated have slightly more than twice as many HR personnel – with one HR staff person for every 64 employees compared to their peers at the lowest level of maturity. These high-impact HR organizations also have lower involuntary turnover compared with compliance-driven HR organizations (8 percent vs. 11 percent).
  • One-fifth of the study's 251 responding organizations said that HR technology was a key area of increased investment in 2014. Bersin by Deloitte's recent research, "Vendor Management in HCM Software Implementation," suggests that the HR technology market is hot, with many organizations trading in outdated systems for new systems offering better integration, improved ease of use and more powerful reporting and analytics capabilities.
  • HR budgets vary substantially by industry, and some sectors fared better than others. For example, financial service companies increased their HR spending by 10 percent to an average of $3,729 per employee. By contrast, retail organizations cut their HR budgets an average of 4 percent during the year as they struggled to cut expenses and increase profits at a time of increasing online sales coupled with tentative consumer demand.

The study was conducted through collaboration between Bersin by Deloitte and Human Resource Executive magazine. Study findings will be featured in a story about the HR Factbook research that appears in today's Human Resource Executive Online.  

To learn more about these trends, download a complimentary copy of the WhatWorks Brief, "HR Factbook 2015: Benchmarks and Trends for U.S. HR Organizations." The findings are now published in slide format, making it easier for HR leaders to repurpose the charts, add their own benchmarks and evaluate their organization against appropriate standards.

Register to join Karen O'Leonard, vice president, benchmarking and analytics research, Bersin by Deloitte, Deloitte Consulting LLP, and Jennifer Krider, senior research analyst, Bersin by Deloitte, Deloitte Consulting LLP, for their online webinar, "HR Benchmarks for Modern Times," 2 p.m. EST / 19:00 GMT, March 10, 2015.

Those interested in learning more about Bersin by Deloitte or its WhatWorks® membership may email info@bersin.com or call +1 510 251 4400.

About Bersin by Deloitte
Bersin by Deloitte delivers research-based people strategies designed to help leaders and their organizations in their efforts to deliver exceptional business performance. Our WhatWorks® membership gives Fortune 1000 and Global 2000 HR professionals the information and tools they need to design and implement leading practice solutions, benchmark against others, develop their staff, and select and implement systems. A piece of Bersin by Deloitte research is downloaded on average approximately every minute during the business day. More than 5,000 organizations worldwide use our research and consulting to guide their HR, talent and learning strategies. For more information, please visit http://www.deloitte.com/bersin or http://www.bersin.com.

As used in this document, "Deloitte" means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see http://www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

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