Employment Relations Today

Survey Examines HR Staffing, Costs, and Structures
in the Nonprofit Sector

Ashley N. Shaw
❏ The typical ratio of HR staff to employees

A lthough every HR department is unique,
there are many similarities that can be
benchmarked in order to see how a depart-
was 1:66.
❏ The typical annual HR operating cost per
ment compares with others. This compari- HR staff member, including salary as a
son is especially helpful when done at an part of the operating cost, was $91,715.
industry-specific level. An examination of ❏ The typical annual HR activities budget
this nature helps HR professionals evaluate per employee—HR services offered from
how certain elements, such as size and bud- recruitment to training to termination—
get, hold out against similarly situated busi- was $1,020.
nesses.
To help aid those HR professionals work- In citing these figures, the median (or mid-
ing in the nonprofit industry with this point) figure was used, as it was determined
evaluation, the 2014 HR Staffing, Cost and that the mean average would be skewed
Structure Benchmarking Survey conducted based on extreme outliers. As such, the
by XpertHR and Nonprofit HR collected data median figure was judged to reflect a more
on the way HR departments in this industry accurate depiction of the industry as a whole.
are resourced, organized, and held account-
able. The study collected data from senior THE SURVEY
HR professionals in 260 organizations, which
together have 991 HR practitioners and The benchmarking survey, which was con-
84,886 employees. ducted in April 2014, gathered responses
The survey report grouped the respon- from HR professionals among a range of
dents into three broad size groups: nonprofit organizations. Of the 260 useable
respondents, all 50 states and every province
❏ Small: 1–249 employees (171 respondents); in Canada were represented.
❏ Medium: 250–999 employees (68 respon- Exhibit 1 depicts the various types of non-
dents); and profit organizations represented in the report.
❏ Large: 1,000 or more employees (21
respondents). HR STAFF
Among the data collected from the respon- The survey highlighted three aspects of the
dents, XpertHR and Nonprofit HR found the HR staff: (1) the ratio of staff members to
following key benchmarks: employees, (2) the size of the HR department,
© 2015 Wiley Periodicals, Inc. 17

Published online in Wiley Online Library (wileyonlinelibrary.com). DOI 10.1002/ert.21470
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Employment Relations Today
Number of Percentage of Median Number

Type Respondents Respondents of Employees
Arts, culture, and humanities 17 6.5 78
Membership society/association 25 9.6 53
Education 35 13.5 107
Environment and animals/animal welfare 6 2.3 72
Health 28 10.8 69.5
Human services 91 35 208.5
International and foreign affairs 8 3.1 250
Public/societal benefit 26 10 500
Relation-related or faith-based 21 8.1 152
Youth/children-focused 41 15.8 227
Other 43 16.5 100
n = 260 organizations.
Source: XpertHR/Nonprofit HR.
Exhibit 1. Types of Organizations Included in the Survey by Focus of Activity
and (3) the roles and qualifications of in size of the department. When questioned
HR staff members. about whether the department had grown,
stayed the same, or decreased over time, it
Ratio of HR Staff to Employees was more common to find growth in the
organization when a change had occurred. In
By taking the responses to both size of the fact, the survey shows that it was three times
organization and number of HR profession- as likely that a growth occurred rather than a
als, it was possible to determine the average decrease. Exhibit 2 reflects the respondents’
ratio of HR to employees. As previously answers to this issue.
stated, the median ratio is 1:66; in other
words, on average, there is one HR profes- When questioned about whether the department
sional for every 66 employees. The lower had grown, stayed the same, or decreased over
quartile showed a 1:39 ratio, while the upper time, it was more common to find growth in the
quartile was 1:107. organization when a change had occurred.
Changes in HR Department Sizes More than determining only the change

in size of HR departments, the survey also
Focusing more on the HR department alone, examined why those changes occurred. Based
as opposed to its overall relation to the orga- on the answers of 81 of the respondents, the
nization, the next set of data gleaned from results were divided into three categories:
the respondents relates to the size of the reasons likely leading to an increase, reasons
department over the past year. Forty-two likely leading to a decrease, and ambigu-
percent of the respondents report a change ous reasons. Exhibit 3 shows the responses
18 Ashley N. Shaw
Employment Relations Today DOI 10.1002/ert
Winter 2015
How has the number of HR staff Main Reasons for Change in HR Staff
changed over the past 12 months? Numbers
Reduced 6% Reason for Increases Cited by %
Stayed the same 73% To meet growing HR workload 57
Increased 21% Establishment of HR 4
n = 254 organizations. department
Source: XpertHR/Nonprofit HR. Functions brought back in 4
Exhibit 2. Percentage of Growth or Decrease house
in HR Departments Reasons for Decreases
Efficiency improvements 17
to why a change occurred divided by the Increased use of HR 7
categories just mentioned. technologies
As part of/following a 7
Classifications and Qualifications downsizing program
HR tasks moved elsewhere in 5
Although some employers, especially smaller the business
ones, might have only a handful of HR pro-
Hiring freeze 4
fessionals who perform multiple HR tasks,
it is also common to find larger HR depart- Ambiguous impact
ments with specialized roles. The survey Change in employee numbers 15
indicates that the HR generalist position is Restructure of HR department 15
employed in a large majority of organiza- Merger or acquisition 3
tions; a little over 92 percent of respondents Other 19
have generalists. However, differences were n = 81 organizations.
noted depending on the size of the employer; Source: XpertHR/Nonprofit HR.
for respondents with 1 to 999 employees, Exhibit 3. Reasons for Changes in the Size of
93 to 94 percent had generalist, whereas the HR Departments
figure drops somewhat steeply for employers
with 1,000 or more employees, for which a
little over 76 percent had generalists. 23.8 percent, respectively, going from small
Apart from the generalist role, as the to large. Although the data do not support a
number of employees rises, the number clear explanation of why diversity does not
of organizations with specialized HR staff fit the general trend, the report speculates
grows. For example, 65.2 percent of employ- that larger nonprofit organizations do not
ers with 1 to 249 employees have a special- address diversity. There also appears to be a
ized role for benefits. Compare this with plateau or slight dip when comparing results
80.6 percent of employers with 250 to 999
employees and 81 percent for employers Although the data do not support a clear expla-
with more than 999 employees. One excep- nation of why diversity does not fit the general
tion to this trend appears to be the area of trend, the report speculates that larger nonprofit
diversity, which resulted in 40.5, 34.3, and organizations do not address diversity.
Survey Examines HR Staffing, Costs, and Structures in the Nonprofit Sector 19

Percentage of Responding Organizations Having HR Staff in Specialist Functions

1–249 250–999 1,000+
Organizational Development 41.1 46.3 33.3
Recruiting 61.4 76.1 85.7
Training and Development 51.3 62.7 71.4
Employee Relations 63.9 73.1 66.7
Compensation 51.9 61.2 57.1
Exhibit 4. Percentage of Organizations with Specialist HR Roles by Size of Organization
Expectation that HR staff hold professional certification
Chief People Officer 38.4 36 25.6
HR Director 30 45.3 24.7
HR Manager 13.8 56.3 29.9 Essential %

Desirable %
HR Business Partner 16 52 32 Not expected %
HR Generalist 7.8 64.1 28.2
HR Assistant 28.9 71.1
0% 20% 40% 60% 80% 100%
Exhibit 5. Percentage of Organizations Expecting Professional Certification for Various HR Roles
from medium employers to large employers of all respondents answered garnering 121
in certain specializations. responses).
The other specializations in HR roles that
were polled in the survey are presented in HR AS PART OF THE ORGANIZATION
Exhibit 4. AS A WHOLE
What certification organizations expect
HR staff to possess depends in large part To have an accurate portrayal of an HR
on job level. Although about 38 percent department, it is vital to see how the depart-
of employers in the survey found it essen- ment operates as a part of the overall orga-
tial for the chief people officer to have the nization. The following sections relate to
appropriate certifications, this number drops this aspect of the HR departments that are
drastically as the positions become more reflected in the survey.
entry level. For example, no respondent
thought it was essential for an HR assistant Reporting Line
to be certified. Exhibit 5 maps out the cer-
tification expectations of those respondents The first way the survey provides informa-
who answered this question (around half tion on the HR relationship with the rest of
20 Ashley N. Shaw
Winter 2015
Reporting Line for the Most Senior HR Executive

% for All % by Number of Employees
Reports to … Respondents 1–249 250–999 1,000+
Chief Executive Officer/President/Executive 59.6 56.7 67.6 57.1
Director
Chief Financial Officer 13.5 14.6 10.3 14.3
Chief Operating Officer/Chief Administra- 17.3 16.4 17.6 23.8
tive Officer/Director of Administration/
Director of Finance & Administration
General Counsel 0.4 0.6 0 0
Other 9.2 11.7 4.4 4.8
Exhibit 6. Reporting Position for Senior HR Staff
Allocation of Main Responsibility for People Management Activities—% of All

Respondents
HR Supervisors Shared Other
Employee relations 27.3 9.2 60.8 2.7
Equal opportunity, diversity, & inclusion 60.5 4.3 31.8 3.5
Handling legal issues 70.8 2.7 5.8 20.8
Training and development 41.2 10.8 40 8.1
Compensation 41.9 9.2 33.8 15
Performance management 28.8 13.5 55.4 2.3
Staffing 41.1 8.1 45.7 5.1
Exhibit 7. Percentage of Staff Who Have Primary Responsibility for Various Activities
the workplace is through responses elicited across nonprofit industries and sizes. How-
to questions regarding the reporting lines. To ever, the smaller the organization is, the less
whom does the most senior-level HR man- likely the HR staff is to report to a CEO or
ager report? The survey shows that the most equivalent position. The most probable reason
common arrangement is to establish a sys- for this is that the smaller the organization,
tem wherein the most senior level in the HR the less likely it is to have such a position.
department reports directly to a chief execu- Exhibit 6 shows the person to whom the
tive officer (CEO), president, or executive most senior-level HR member reports, again
director. For the most part, this can be seen showing distinctions by size of organization.

People-Management Divisions 5. Compensation—determining pay raises

6. Performance management—appraisal, job
Development of proper people-management descriptions, disciplinary process
responsibility is essential, as there can be a 7. Staffing—recruitment, transfers, work-
dichotomy between how much HR staff want force reductions
to remain in charge of these responsibilities
in order to see that they are done correctly The results show that, overall, HR is
while simultaneously wanting to allow super- heavily responsible in all of these areas.
visors to feel ownership in their tasks and Exhibit 7 shows that, for the most part,
take some of the workload away from the respondents suggest they have sole responsi-
overworked HR department. bility or joint responsibility for these tasks.
To find out how this division of labor is For the most part, organizations share or
handled, the survey next asked respondents divide these people-management compo-
who had primary responsibility for the fol- nents between HR and a supervisor. How-
lowing seven areas: ever, some organizations selected “other”
as a response; most notably, this occurs
1. Employee relations—communication, with legal issues for which a legal team is
problem solving, resolution responsible.
2. Equal opportunities
3. Handling legal issues—lawsuits, Equal TIME MANAGEMENT
Employment Opportunity Commission
(EEOC) complaints Any accurate portrayal of HR will include
4. Training and development—training, suc- a display of how HR staff spends its day.
cession planning, talent management Exhibit 8 shows the percentage of time
Percentage of HR Time Spent on Types of Activities

% Time Spent— % Time Spent— % Time Spent—
Activity Lower Quartile Median Upper Quartile
Strategic activities 3 9 13
Business consultancy 10 20 25
Administration 12.5 22 30.5
Keeping up to date 4 5 10
Recruitment 5 15 21
Training 3 5 10
Health and safety 0 3 5
Recognition and engagement 1 5 7
Exhibit 8. HR Time Spent on Different Activities
22 Ashley N. Shaw
Winter 2015
HR Department Timetable: What Relative Time Commitments Mean in a

Working Week
9–10 11–12 12–1 1–2 2–3 3–4 4–5
am 10–11 am am pm pm pm pm pm
Monday Administration Lunch
Tuesday Business Lunch Consultancy
Wednesday Lunch Training
Thursday Strategic activities Lunch Engagement Safety
Friday Keeping up to date Recruitment Lunch
Exhibit 9. Sample HR Workweek
respondents stated they spent for a variety of HR Activities

top-level tasks. HR Operating Costs per Budget per
Using this information, it is possible to HR Staff Member Employee
come up with a sample 35-hour workweek
Operating Costs Activities
that shows how a week’s work would be spent
Measure Budget ($1)* Budget ($1)**
by a member of the HR staff. See Exhibit 9.
Lower
quartile 60,000 547
HR STRATEGY
Median 91,715 1,099
Only a little over one in three respondents Upper
said that their organization had a documented quartile 121,676 2,579
HR strategy. This number is larger in larger Average 130,539 2,262
organizations (where 61.9 percent report hav- *n = 90 organizations; **n = 80 organizations.
ing one). Source: XpertHR/Nonprofit HR.
When there is a strategy, 73 percent say Exhibit 10. HR Staff Costs and Activities
the strategy was developed as an important Budget
Median Number Median Annual HR Median Annual HR Number

of Employees per Operating Costs Budget Activities Budget of Orga-
HR Staff Member per HR Staff Member ($) per Employee ($) nizations
1–249 52 93,983 1,524 171
250–999 100 100,000 1,044 68
1,000+ 131.8 64,545 646 21
All 65.9 91,715 1,099 260
Exhibit 11. Key Metrics by Size of Organization

24
Median Num- Median Annual HR Median Annual
ber of Employ- Operating Costs HR Activities Median
ees per HR Staff Budget per HR Budget per Number of Number of

Organization Type Member Staff Member ($) Employee ($) Employees Organizations
Arts, Culture and 68.8 86,667 1,000 78 17
Humanities
Education 65 100,000 1,066 72 35
Environment and Ani- 62.5 33,750 4,724 70 6
mals/Animal Welfare
Health 68.2 75,000 969 209 28
Human Services 87.5 90,000 731 250 91
International/Foreign 52 89,167 1,158 500 8
Affairs
Public/Societal Benefit 66 110,000 833 153 26
Religion-Related or 94.4 97,276 1,158 227 21
Faith-Based
Youth/Children- 61.2 100,000 1,319 100 41
Focused
Membership Society/ 46.3 122,560 1,873 53 25
Association
Other 59.2 100,000 853 107 43
All 65.9 91,715 1,099 120 260

Exhibit 12. Key Metrics by the Type or Focus of the Organization
DOI 10.1002/ert
Ashley N. Shaw
Winter 2015
part of the overall organizational strategy; 18 the HR department—and HR activities—the

percent say it was a follow-up to the original sum of HR operating costs plus the cost of
organizational strategy; and 8.4 percent said providing HR-related functions to the overall
the HR strategy was created independently organization.
from the overall organizational strategy. Although the size of the organization greatly
Although only about a third of the affects this figure, the combined data allowed
responding organizations have an HR strat- us to extrapolate two key benchmarks: HR
egy, most of the total number of respondents operating costs per staff person and HR activi-
indicated that they make efforts to measure ties budget per employee. See Exhibit 10.
their effectiveness. Approximately 20 percent The last two charts (at Exhibits 11
have formal measures to do this, and about and 12) show those two metrics plus the
40 percent have informal measures. As is median number of employees per HR staff
often the case throughout this report, these member in the context of both organization
numbers increase as the size of the organiza- size and focus for the nonprofit sector repre-
tion increases. sented by our pool of respondents.
Asked to measure how effective their HR
departments are either by reviewing formal POSITIVE SIGNS FOR HR
or informal measures or by estimation (for
those without measures), those who reported Although the responses varied in part based
having measures were more likely to view on the size of the nonprofit and specific
their department as effective. Still, though, type or focus, the overall conclusion of the
most respondents, even those without perfor- report is that the nonprofit HR function
mance measures, believe their department is appears to be effective. The departments
at least average. are continuously managing ever-greater
demands in conjunction with cross-orga-
BUDGET METRICS nization supervisors and gaining the trust
of leadership, which in turn is resulting
About half of respondents report that they in expanding resources being made avail-
have a dedicated HR budget. However, able to do the job. This may tie in with
almost as many report there is no dedicated how respondents feel their influence has
budget, and a small number do not know. changed over the past year. Nearly half
The survey asked the respondents with a (49.2 percent) reported an increase in influ-
budget how much was spent across a range ence, 46.5 percent reported that influence
of issues between both HR operating costs— had stayed the same, and only 4.2 percent
salaries, training, recruitment, and so on, for claimed a decrease.
Ashley N. Shaw is a legal editor at XpertHR US (www.xperthr.com), an online

subscription service for HR professionals. She writes on workplace issues includ-
ing those relating to health, safety, and security. She may be contacted via e-mail at
Ashley.Shaw@reedbusiness.com or follow her on Twitter @AshleyShaw21.


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Survey Examines HR Staffing, Costs, and Structures

in the Nonprofit Sector

❏ The typical ratio of HR staff to employees

© 2015 Wiley Periodicals, Inc. 17

Number of Percentage of Median Number

Exhibit 1. Types of Organizations Included in the Survey by Focus of Activity

Changes in HR Department Sizes More than determining only the change

Survey Examines HR Staffing, Costs, and Structures in the Nonprofit Sector 19

Percentage of Responding Organizations Having HR Staff in Specialist Functions

Expectation that HR staff hold professional certification

Chief People Officer 38.4 36 25.6

HR Director 30 45.3 24.7

HR Manager 13.8 56.3 29.9 Essential %

HR Generalist 7.8 64.1 28.2

HR Assistant 28.9 71.1

0% 20% 40% 60% 80% 100%

Exhibit 5. Percentage of Organizations Expecting Professional Certification for Various HR Roles

Reporting Line for the Most Senior HR Executive

Exhibit 6. Reporting Position for Senior HR Staff

Allocation of Main Responsibility for People Management Activities—% of All

Survey Examines HR Staffing, Costs, and Structures in the Nonprofit Sector 21

People-Management Divisions 5. Compensation—determining pay raises

Percentage of HR Time Spent on Types of Activities

Exhibit 8. HR Time Spent on Different Activities

HR Department Timetable: What Relative Time Commitments Mean in a

respondents stated they spent for a variety of HR Activities

Median Number Median Annual HR Median Annual HR Number

Survey Examines HR Staffing, Costs, and Structures in the Nonprofit Sector 23

ees per HR Staff Budget per HR Budget per Number of Number of

part of the overall organizational strategy; 18 the HR department—and HR activities—the

Ashley N. Shaw is a legal editor at XpertHR US (www.xperthr.com), an online

Survey Examines HR Staffing, Costs, and Structures in the Nonprofit Sector 25

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