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HOW TO BUILD THE

IDEAL HR TEAM
With limited time, budget and resources
In the best of all The North Star
possible worlds, Wherever you are on the path to building
if money and an HR team, it’s necessary to have a
destination in mind, an ideal org chart.
resources were You may not be able to achieve the ideal
overnight, or ever, but every team needs a
no problem, what north star to guide them.

would your IDEAL Based on nearly 30 years of working with

HR team look like? medium-to-small sized businesses, along

with lots of interviews and research, we
discovered that high-functioning HR teams
invest time and resources in three key areas:

• Talent Acquisition
• Benefits
• HR Operations
Keep Dreaming,
Right?
Now, let’s get real. We can’t answer the
question “how many people do I need to hire
in HR next year?” – that will depend on factors
and decisions unique to you. But, if you’re like
most organizations and can’t wave a magic
wand, let us suggest how to “hack” your way to
an ideal state.

This is your guide to understanding where to

invest resources as you build your own version
of an ideal HR team.

As you begin exploring, we’ll:

• Highlight the ideal state within each key

focus area
• Define responsibilities
• Examine metrics to track
• Reveal how technology can be your
secret weapon
Building an HR
Team: Ideal State
WHO LEADS THE CHARGE?
The key to building and developing an HR team
Head of HR
begins and ends with the Head of HR. This person
establishes a true partnership with executives, first
by understanding the goals and objectives of the
organization, and then by aligning HR to that company
mission. The HR leader establishes a firm foundation to
ensure the team is adequately prepared and supported,
either through technology, staff, or, ideally both, to
cover the three primary focus areas. And even if you’re
an HR team of one, knowing where to invest your time
and energy will be valuable as you look to improve
efficiencies and earn more support and investment from
leadership.

WHAT MAKES A GREAT HR LEADER?

…… Good listener and communicator
…… Composed in emotional situations
…… Analytical, metrics-driven
…… Demonstrates an ability to rally change
…… Evokes confidence in others
How to Make Head of HR
It Happen
Your organization may not be able to hire an HR
leader today or tomorrow, or you may be the
person responsible for leading the charge; either
way, it’s critical to align HR’s unique capabilities
with the company’s objectives, goals, strategies,
and measures. For example, if your company
has aggressive plans to grow, HR should be
focused on hiring strategies, including how to
build and maintain a healthy pipeline of talent.
But that’s the tip of the iceberg. There’s hiring
compliance to think about. And there’s retention
and engagement strategies as well. Figure out
what your company needs and how HR can add
value. That’s the first step.
TALENT ACQUISITION
Talent acquisition is the single most important HR
function for any organization because the foundation
for overall success starts and ends with your people.
As the workforce continues to evolve, HR needs to
develop strategies that improve recruiting efficiency
The 3 Areas of Focus
and reduce time and cost to hire.

BENEFITS
Labor expenses, like wages and benefits, can account
for nearly 70% of total business costs. And with
competition across the job market more cut throat
than ever, employers can’t afford to cut corners or
offer status quo plans. The most successful HR teams
use their overall benefits experience as a competitive
advantage.

HR OPERATIONS Talent Benefits HR

Most of HR’s time, and its biggest challenges, come Acquisition Operations
from managing people. The question is: is your time
well spent? If you’re drowning in manual work or stuck
answering the same employee questions day after
day, you—and your company—are missing out on the
significant upside of investing time and energy into
managing and developing your people.
Ideal State Talent Acquisition
Best case scenario, you have the resources to
break down talent acquisition into two focus
areas: recruiting and administration/hiring.

• The recruiting function builds a candidate

pipeline to attract better talent and focuses
on filling positions ever more efficiently.
• The administration/hiring function develops
and maintains an organized and repeatable
process to ensure compliance and provide a
positive candidate experience.

Recruiting
Administration + Hiring
RECRUITING Talent
Acquisition
Responsibilities:
A well-oiled machine
Your recruiting team is like a sales team. Recruiting should develop a talent pipeline by
building a bench of candidates, regardless of openings, to ensure roles can be filled
quickly. And just like a sales representative, recruiters should be measured on key
performance indicators to support growth and respond to immediate business needs.
Recruiting
Metrics
To understand outages and ways to improve, here’s what to consider: Administration
+ Hiring
AVERAGE COST OF HIRE
What it is: Total internal + external hiring costs ÷ total hires
Why it matters: Helps recruiters make smarter decisions, create budgets,
reduce hidden expenses and prioritize investment
Insight: The industry benchmark is $4,129 i, yet more than 20% of
organizations don’t know their cost per hire ii

AVERAGE TIME TO FILL

What it is: Total number of days a job goes unfilled
Why it matters: The longer a position is open, the greater risk for losing
quality candidates and negatively impacting productivity
Insight: The industry average is 42 days iii, yet for 15% of organizations,
the average time to fill extends beyond 60 days iv
Metrics, continued: Talent
Acquisition
CANDIDATE PIPELINE
What it is: The number of qualified candidates interested in a job
Why it matters: It builds a stable army of potential hires whose
skills and experience match roles where no immediate hiring need
currently exists
Insight: Create an effective pipeline by forecasting the number of Recruiting
candidates needed to hire each year, sourcing candidates, tracking
referrals and reviewing conversion rates Administration
EMPLOYEE REFERRAL PERCENTAGE + Hiring
What it is: Total number of candidates hired ÷ by number of
employee referrals
Why it matters: Referrals are the top source of hires for employers
and produce more engaged and productive employees
Insight: Employees hired through a referral program have an average
retention rate of 46%, compared to 33% for those that only use
career sites v
How to Get There: Recruiting Talent
Acquisition
Where Does the Buck Stop?
If you can’t answer that question, you’re headed for trouble. Many smaller
organizations share the recruiting function across several people, with managers of
other departments left to do much of the recruiting. HR can prevent a haphazard
process by owning the recruiting function. With clear ownership, HR can assess
the current state of recruiting, apply metrics to test and learn, align with the hiring
manager and share results with leadership. Recruiting

Your Secret Weapon Administration

Not everyone has the luxury to hire, and that’s perfectly OK – adding headcount isn’t + Hiring
the end all be all. In fact, with a modern Applicant Tracking System (ATS), you get the
best of both worlds. An ATS can vastly improve how you find talent AND relieve much
of the administrative burden. Here’s how:

• Build a Candidate Pipeline

An ATS improves candidate search by providing dashboards and insights
on your pipeline.

• Seamless Candidate Experience

The right ATS will make it easy for candidates to apply from anywhere,
on any device, at any time.
ADMINISTRATION + HIRING Talent
Acquisition
Responsibilities:
Management and oversight
Think of the hiring/administrative function like project management.
Without the right resources, sifting through a significant amount
of paperwork and managing the hiring process can be a logistical
nightmare. Recruiting
Administrators work with hiring managers to ensure proper compliance
practices, schedule interviews, set proper expectations and provide Administration
detailed communication throughout the interview process. + Hiring
Metrics Talent
Acquisition
To spot problem areas and improve efficiencies, consider tracking these metrics:

SOURCE OF HIRE
What it is: Percentage of overall hires from each recruiting channel
Why it matters: Helps HR determine which recruiting channels are
most valuable
Insight: Hiring sources are a critical component to developing an Recruiting
effective recruiting strategy
Administration
APPLICANTS PER HIRE + Hiring
What it is: Number of applicants to the number of people hired
for the position
Why it matters: It helps HR understand the number of candidates
needed to interview for a position
Insight: This number will vary depending on employee size, role and
brand, but it’s the first step to determining the ideal candidate pipeline
size that’s best for you

OFFER ACCEPTANCE RATE

What it is: Number of candidates offered ÷ number accepted
Why it matters: Knowing metrics behind offer acceptance helps HR
determine the effectiveness of recruiting programs
Insight: If acceptance rates are low, evaluate your compensation and
benefits packages
How to Get There: Administration + Hiring Talent
Acquisition
Real-Time Analytics & Reporting
Take the guesswork out of the hiring process. An ATS should
provide data and reporting to see where your best candidates are
coming from, discover bottlenecks and uncover new opportunities.

Goodbye Candidate Drop Off

Recruiting
Losing great candidates due to poor communication or incoherent
processes? The right ATS should make scheduling interviews,
compiling feedback, collaborating with hiring managers and
Administration
sending offer letters seamless, so you’re not left regretting that ideal + Hiring
candidate who got away.
Ideal State Benefits Admin
Benefits administration is all about HR
leveraging benefits as a competitive advantage
to recruit, engage and retain top talent. But
that’s only half the story. Labor costs are often
a company’s greatest expense. Managing these
costs may not seem like a primary function of
HR, which is why it’s often left to Finance. But
that’s a missed opportunity. HR can offer a
unique people-centric view of the business that,
left on its own, Finance will miss. Ideally, HR
breaks free from the routine of benefits admin.
That gives HR time to do what it does best:
effectively evaluate and tailor benefits packages
to their workforce and help Finance predict and
manage labor costs. Benefits
Labor Costs
BENEFITS Benefits Admin
Responsibilities:
Win the War for Talent
The Benefits team leads the overall design, implementation,
communication, and administration of the organization’s
health and wellness programs. According to Glassdoor, Benefits
57% of job candidates report benefits are among their
top considerations before accepting a job. Status quo,
cookie cutter benefits packages won’t work. The key to a
Labor Costs
successful benefits program is creating one that appeals to
the current employees you need to keep engaged and the
candidates you need to attract.
Metrics Benefits Admin
To understand outages and ways to improve, here’s what to consider:

BENEFITS COST PER EMPLOYEE

What it is: Total annual cost of an employee’s benefits ÷ number of employees
Why it matters: Helps employers evaluate costs and meet needs of the
business and employees Benefits
Insight: The most successful HR teams are evaluating benefits packages
to control costs while also offering attractive plans that are a differentiator Labor Costs
in the marketplace

PARTICIPATION RATE
What it is: Total number of employees ÷ benefits plan participants
Why it matters: Indicates the effectiveness of benefits offerings, education
and employer communication strategies
Insight: Unused benefits can be costly for employers, but finding the root
cause can reduce expenses and increase employee engagement

BENEFITS SATISFACTION
What it is: The overall effectiveness of benefits plans
Why it matters: Tracking benefits satisfaction can help you attract quality
candidates and retain your top people
Insight: Surveying your people will help determine which plans are effective
and what changes could be made to optimize your current offerings
How to Get There: Benefits Benefits Admin
Buried in Paperwork?
If benefits administration relies on manual processes, HR will have little left to
educate and guide employees through the fear and anxiety that comes with
open enrollment. And adding more staff to manually fill out forms isn’t the
answer. You need technology to eliminate the admin work so you can help
guide your people through this time of uncertainty. Benefits

Automate, Automate, Automate Labor Costs

If you’re ready to revamp your approach to benefits administration,
look no further than technology. The right benefits solution will…

• Empower employees to self-select benefit plans

• Offer interactive decision-support tools that educate employees
and recommend plans based on individual need
• Connect directly to carriers, eliminating repeated manual entry
• Provide HR with proactive reporting on benefits selections

A Match Made in…Benefits

Because so much knowledge is needed to prescribe the right plans for both the
organization and employees and resources are few, HR is at a crossroads. That’s
why they’re turning to benefits brokers for help. The right technology and the
right partner can be a game-changer for HR, simplifying your job and providing a
broker with the valuable information they need to best advise your organization.
LABOR COSTS Benefits Admin
Responsibilities:
Unplanned Overtime Is a Big Problem
One of the biggest challenges CEOs and CFOs face is controlling
labor costs. A quick way for HR to add value to the organization
is to examine the impact labor expenses have on your business.
Start with overtime. It’s one of the main reasons labor expenses
Benefits
are off the charts. By drilling down into key labor metrics across
your business, HR can detect problem areas and optimize it to Labor Costs
reduce unplanned expenses.
Metrics Benefits Admin
70% is a Big Number
According to the Bureau of Labor, 70% of businesses’ compensation costs are
attributed to wages and salaries. If you don’t have meaningful, actionable data on
your biggest expense, you can’t impact your bottom line.

TOTAL LABOR COSTS Benefits

What it is: A combination of salaries and wages paid to employees, + related
payroll taxes and benefits Labor Costs
Why it matters: Reducing labor expenses can greatly impact the bottom line
Insight: Taking a closer look at labor costs by department, location, month
and year over year will allow you to identify problem areas and uncover new
opportunities

OVERTIME COSTS
What it is: Expenses resulting from work performed outside of a basic workday
Why it matters: While every organization plans for labor costs, it’s the hidden
costs, like unplanned overtime, that impact the bottom line
Insight: Drill down into overtime expenses by month, manager and department
to find where hidden costs lie and how you can optimize your expenses
How to Get There: Labor Costs Benefits Admin
Partner with Finance
When HR aligns with Finance to make labor costs a shared
responsibility, HR can analyze pay practices to ensure the organization
is offering competitive pay ranges and effectively managing overtime
expenses. Sounds good in theory, but how do you access the key
metrics you need? With the help of HR technology. Benefits

What Executives Want to See Labor Costs

HR technology, specifically time and attendance tracking and data
analytics tools, can prove invaluable when evaluating and projecting
out labor expenses. Not only can an accurate time solution alert
you when employees approach overtime, but a data analytics tool
should allow you to create reports tailored to your specific needs. The
more value you offer executives, the more likely they’ll support your
strategic programs targeted at retaining your people.
Ideal State HR Operations
The Real Reason You Got into HR
HR Operations gives HR professionals a
great opportunity to help an organization
think differently about its people. This
includes supporting and training employees,
helping them develop and grow and retaining
talent. These focus areas are the reason HR
professionals get up in the morning, so HR
operations is an important function of the
ideal team. Of course, compliance is part of
HR operations. No matter the size of your
organization, compliance will always fall on
HR’s shoulders. Ideally, that burden is managed
effectively, so that HR can “have it all”: the
time they need to devote to the employee
Compliance
experience, and time to maintain compliance
across the organization. Business Partners
COMPLIANCE HR Operations
Responsibilities:
The Foundation of Every Business
The compliance function ensures that an organization
proactively monitors and is current on all aspects of compliance
related to federal, state and local government agencies. With an
understanding of the overall compliance landscape, the function
Compliance
is responsible for ensuring that established company policies
are accurate and compliant. This also includes defining and Business
establishing practices to help mitigate employee risk. Partners
How to Get There: Compliance HR Operations
The Topic HR Can’t Ignore
HR has historically been focused on compliance more than other departments,
but the role is evolving and becoming more focused on people-centric concerns
and overall business strategy. With limited resources and time, HR can rely
heavily on outside experts.
Compliance
Pave the Way for Compliance Accuracy
If filing cabinets are your preferred storage method and you’re tracking Business
employee information in spreadsheets, errors are inevitable. Instead, the right Partners
HR technology can make a dramatic difference. Not only will HR tech connect
your systems and offer one single source of truth for employee data, it can
also streamline compliance management and notify you if documents expire or
certifications need updating.

Technology May Not be Enough

Just as we discussed in benefits administration, you’re probably not an expert
on everything compliance. That’s why turning to outside experts for support
is critical. A lawyer, broker or industry expert who specializes in compliance
practices may be the added layer of protection you need. More than 30,000+
medium-to-small sized businesses rely on Paycor for the latest compliance news
and regulation updates. Subscribe to our Resource Center and stay current on
what’s happening.
BUSINESS PARTNER HR Operations
Responsibilities:
The Relationship Builder
HR Business Partners are focused on managing the people
side of your teams. They work closely with executives to create
programs and initiatives that best support the objectives of the
organization. They serve as consultants to management on HR
Compliance
issues and focus on critical areas like performance management,
employee engagement, retention, employee management Business
policies, career planning and employee communication. HR Partners
Business Partners also play a critical role in relationship-building
across the organization, connecting HR to and promoting more
collaboration across all areas of the business.
Metrics HR Operations
To understand outages and ways to improve, here’s what to consider:

RETENTION RATE
What it is: Number of individual employees who remained employed for
an entire measurement period ÷ the number of employees at the start of
the measurement period Compliance
Why it matters: Retaining quality people is a top challenge
Insight: HR should conduct exit interviews to understand why employees Business
leave, and meet with their longest tenured people to learn what’s working Partners
TURNOVER RATE
What it is: The number of employees who leave during a given time period
divided by the average number of employees
Why it matters: A new employee can take up to two full years to reach the
same level of productivity as an existing staff member vi
Insight: Carefully examining turnover trends will allow HR to prevent problem
areas from becoming larger issues

EMPLOYEE NET PROMOTER SCORE

What it is: A rating system that determines employee loyalty and engagement
Why it matters: Employers ask, “Would you to recommend the company to a friend
or relative?” to organize people into promoters, detractorsor passive employees
Insight: Learning what makes promoters tick will enable you to craft engagement
strategies that engage people that are passive or detractors
How to Get There: Business Partners HR Operations
Are You Focused on What’s Most Important?
HR professionals want to dedicate their time to the aspects of people
management that matter most, specifically onboarding, coaching, learning
and development and retention. But if these areas aren’t top priority or you
lack metrics to demonstrate the value of your programs, it’s time to start
asking tough questions. What’s holding you back? Compliance

The Right Partner Gives You Time Back Business

HR technology has improved dramatically over the years. The right system Partners
can give HR professionals time back, but technology alone isn’t enough.
HR should rely on a partner that offers personalized, dedicated support and
thought leadership to compliment technology offerings, so they can shift
their focus from employee administration to true people management.
The right HR solution will…

• Simplify the way you manage employee requests and updates

• Empower your people to manage information with self-service
• Track performance, trainings and certifications
• Ensure compliance with automatic reminders on important updates
• Help you track key metrics and give you time to build
investment strategies
 The Longest Journey
Starts with a Single Step
No matter if your company is big or small, growing or holding steady, or
strapped with limited resources, HR can find ways to make a difference by
understanding how and when to provide value.

Talent Benefits HR
Acquisition Administration Operations

Recruiting Benefits Compliance

Administration + Hiring Labor Costs Business Partners

 For more inspiration and practical
ideas on how HR can make a
difference, visit paycor.com/HRCOE.

Sources:
i. https://www.shrm.org/about-shrm/press-room/press-releases/
pages/human-capital-benchmarking-report.aspx
ii. Paycor’s Market Trends, July 2017
iii. https://www.shrm.org/about-shrm/press-room/press-releases/
pages/human-capital-benchmarking-report.aspx
iv. Paycor’s Market Trends, July 2017
v. https://theundercoverrecruiter.com/employee-referral-program/
vi. https://www.quantumworkplace.com/future-of-work/
infographic-17-shocking-employee-turnover-statistics