Study shows US organizations reinvesting in human resources spending, staffing

Bersin & Associates announced on June 1, that US organizations are starting to reinvest in human resources services and staffing following the economic downturn of the past three years, according to findings included in Bersin & Associates’ The HR Factbook 2011: Executive Summary. Organizations on average spent 1.4 percent more on HR programs, services and systems in 2011 than in 2010, with $1,218 spent per employee, according to the March 2011 study.  Some of these funds went to hire additional staff, as HR headcount increased an average of 1.8 percent this year. Most organizations focused investments on core services such as compensation, benefits, payroll and employee relations, which accounted for about 60 cents of every HR dollar. Approximately one-third of the HR budget went to talent management, as organizations invested more in recruiting and development initiatives.

“The increased spending on Human Resources shows how businesses around the world are rapidly starting to rebuild their talent pipelines and cores services to engage and retain people,” said Josh Bersin, chief executive officer and president, Bersin & Associates.

On average only about one in 10 HR dollars went to “strategic” HR services, which include employee engagement, workforce planning and measurement, and wellness programs. “Organizations at all levels are now talent constrained and business leaders want to re-engage their workforces to drive innovation and execution,” Bersin added. “Human resources teams are being asked to step up their game: creating more innovative recruiting programs, leveraging the power of social networking for internal and external communications, developing emerging leaders, and helping the organization mobilize talent to take advantage of global business opportunities.  These are urgent business problems which require greater investments in HR.”

Bersin & Associates Principal Analyst Karen O’Leonard said that organizations with mature HR functions clearly will emerge from the recession ahead of the game. “These mature HR organizations have strong core services and talent management initiatives, enabling their teams to focus on strategic people issues,” said O’Leonard. “Organizations with such mature HR functions will be better able to hire and retain their key talent, expand more quickly, and recover from the recession faster than companies with less mature and effective HR teams.”

Source: Bersin & Associates; www.bersin.com.