The evolving people profession: HR & Compliance Centre research of HR teams

Author: Hannah Mason

The 22^nd annual HR & Compliance Centre survey on HR roles and responsibilities explores how the profession is evolving with respect to job roles, capabilities and responsibilities. It also provides key metrics to understand the composition of the function across responding organisations.

Our annual HR roles and responsibilities survey looks at recent trends in the profession, from understanding the skills that will make HR professionals stand out, to where HR functions have been taking on additional responsibility to support the rest of their organisation, highlighting the importance of HR in 2024. This analysis is based on a sample of 177 organisations.

The evolution of HR

HR is a critical function within organisations, and the scope of the role has expanded and evolved over time. With new technology and AI affecting the future of work, it is fair to assume that HR will continue to develop and benefit from emerging practices.

While around two-thirds (64.2%) of respondents said that they had not seen any changes in the make-up of their HR department, the remainder reported that either there were HR roles or job titles that are new or becoming more common, or that there were HR roles that were becoming less common at their organisation.

Examples of new or more common roles/job titles include:

• HR business partner;
• people/workforce analyst; and
• people and culture positions.

Several respondents indicated that there had been a shift within their organisation, with job titles focusing on "people" rather than "HR". For example, one individual noted that the Director of HR position is now Director of People. Another noted that all HR job titles at their organisation have used "people" to replace "HR".

Examples of roles/job titles that are becoming less common include:

• HR assistant or officer; and
• administrative roles.

One organisation stated that fewer administrative officers are now needed at their organisation for onboarding, due to a new recruitment system that automates the process and provides more tracking information than was generated previously.

The work of HR is expanding in some organisations, with around one-third (34.5%) reporting that the HR team had taken on new areas of responsibility in 2023. This was more prominent in small organisations with less than 250 employees, where 37.4% stated that HR had taken on new responsibilities, eight percentage points higher than the largest organisations (with 1,000 or more employees). The areas that HR are picking up responsibility for is diverse, from learning and development to health and safety, as shown in the word cloud below.

HR priorities for 2024

At the end of 2023, we explored emerging priorities for 2024 in this commentary and insights resource, based on preliminary findings from this survey. Some 2024 priorities that were highlighted were:

• management skills;
• employee performance and productivity;
• recruitment and redundancy;
• technology and AI; and

• employee wellbeing. 

With all responses now in, some additional priorities were mentioned. Improving the company culture came out as a theme that organisations would be prioritising for 2024, with mentions of striving for "one-team" and "aspirational" cultures. Culture came up throughout the survey as being on the forefront of HR teams' agendas, for example, "culture and inclusion" or "culture and engagement" roles were mentioned as new roles/job titles at their organisation. Culture plays an important role within organisations but is something that can be difficult to get right, with it being flagged as being a common barrier affecting HR working effectively across their organisation, cited by half of respondents (50.9%).

How HR is operating

The onset of the pandemic saw a shift in the way many organisations operated, with hybrid and remote working becoming more commonplace. In this section we assess the ways in which HR staff are working, as well as looking at how common HR tasks are completed.

We asked respondents which working patterns were undertaken by HR staff currently working at their organisation. The most common flexible working arrangements are hybrid working (87%), part-time contracts (62.1%) and flexitime (57.1%). Just one in 20 organisations reported that no flexible arrangements are currently undertaken by HR staff at their workplace.

Tasks that have most commonly remained as only being done in person are employee consultations (individual or collective) and disciplinary or grievance hearings. For both tasks, approximately one-third of organisations stated that these are conducted solely in person. Meanwhile, other tasks are carried out both in person and remotely, with the majority of organisations reporting that collaborating with business leaders, carrying out strategic work and advising line managers are all tasks that are done flexibly between the workplace and remotely. Very few organisations stated that any of the tasks are solely conducted virtually - these were likely organisations that operate entirely remotely.

Valued HR skills and development needs

A variety of skills were deemed to be most valuable for HR teams, with employee relations (89.8%), employment law and compliance knowledge (85.9%) and employee engagement experience (83.6%) among the skills seen as most valuable.

Environmental, Social and Governance (ESG) skills and experience was seen as valuable by the fewest proportion of organisations, with just one in five (20.3%) respondents indicating they felt this was a skill that was most valuable for their team to have.

Respondents were also asked to give up to three skills that they felt their HR team would benefit from developing further. Top skills included:

• strategic skills (HR and organisational strategy, 41.2%);
• data analysis (35.3%); and
• diversity and inclusion (30.6%).

Chart 1: Skills deemed as valuable or to be developed in HR functions

HR metrics

A wide variety of metrics are collected by organisations to provide insights into employees' experiences and HR proficiency. Out of 17 different metrics respondents were able to select from, the median number of metrics measured is seven per organisation.

Chart 2: Metrics collected by organisations

While this shows that organisations appear to be proactive in their approach to monitoring aspects of the employee experience, the data also highlights a lack of consistency across the board. For example, many organisations reported that they collect data on employee turnover, a key metric in understanding their staffing levels. However, factors that may contribute to employees leaving are measured less frequently, with less than one-third of organisations collecting data on the wellbeing of employees. Around just one in 10 organisations conduct stay interviews, which can provide vital information indicating issues that can be addressed before a key employee decides to leave, which may in turn help to see retention improve if the findings of the interviews are tackled.  

The most common methods to gain insight to employee experience are exit interviews (92.7%) and employee opinions surveys (82.5%).

While is important for employers to collect data in order to help monitor the organisation, the most crucial element that is often forgotten in data collection processes is using the insights gained to guide or inform changes made within the organisation. For example, monitoring absence data provides little value unless the data is then used to support decision making and evaluation processes introduced to attempt to reduce absence levels.

We asked organisations to provide us with examples of how insights from data have impacted the work of the HR team. One respondent explained: "Whilst reviewing our hybrid working model, we analysed our exit interview data to understand if our approach had been detrimental or advantageous from a retention perspective." A similar approach was taken by another organisation that reported that they had added hybrid working preference questions to their employee opinion survey and explained "the results of the survey showed that our employees would look to move to a different company if hybrid working was on offer there and this led to us implementing a hybrid working arrangement for our staff."

Another organisation detailed how data was used to improve employee satisfaction, by "tailoring our benefits offering in favour of the benefits people said they most valued (which were mostly time-based benefits)". This approach demonstrates how data could be used to improve satisfaction with little cost, by listening to employees and taking action from an employee-led initiative.

Measuring the impact of changes is also important in helping to create a culture of continuous improvement. Collecting data to follow up on an initiative or change can help to see if any real impact has been made against the baseline measure. One organisation explained how, by focusing efforts based on the results of employee surveys, they were able to measure a positive difference seeing their attrition rate halve within a year.

How HR spends its time

How HR allocates its time is largely unchanged from the 2023 survey, with approximately 20% of HR's time spent on both business consultancy and administration.  The next most time-consuming activity was recruitment, taking around 15% of HR teams' time.

Chart 3: Median time spent per activity

With strategic activities taking up one-tenth of HR's time, it is clear that the function is involved in developing their organisation's strategy. The majority (94.4%) of organisations stated that HR contributes to organisation-level strategic planning - two-fifths (42.9%) reported that HR contributes to strategic conversations while decisions are made by senior leaders, and a further half (51.4%) stated that HR contributes to both conversations and decision making. Just one in 20 organisations reported that HR is not involved in strategic planning at all.

In organisations where HR colleagues are embedded in the strategic decision-making process, respondents were most likely to indicate that the HR team is very effective in meeting the needs of their organisation. More than two-fifths (44%) of these respondents rated the HR team as very effective, compared with just 23.7% at organisations where strategic decisions are made by senior leadership without the support of HR.

HR budgets

Around two-thirds (66.1%) of organisations stated that the HR function at their organisation has its own budget. This was more common in the largest organisations, at 92.6%, compared with around half of smaller organisations (53.5%).

Just one organisation in 10 reported decreases to their spend on HR-related activities or running costs in the 2023 survey. Predicting for the next year, many organisations expect spend to either increase or remain unchanged, while around one-fifth are not sure.

Chart 4: Change in HR spend expected in 2024

HR collaboration across organisations

One-third (33.3%) of respondents indicated that they believe their HR team is very effective in meeting the needs of their organisation. A similar proportion (35%) reported that they felt working relationships between the HR team and the rest of their organisation were very effective. By comparison, just one-fifth (22.2%) of larger organisations (at least 1,000 employees) reported that working relationships were very effective. Some of the biggest barriers reported for effective working relationships included organisational culture (50.9%), lack of buy-in from line managers (42.3%) and inadequate or outdated systems (41.1%).

Chart 5: Barriers to working effectively across the organisation

Key HR team metrics

Across the organisations in our sample, there are a median of 60 employees per HR colleague. This is calculated by dividing the number of non-HR employees by the number of HR colleagues. The ratio between the number of HR staff and all other employees has remained stable, with little variation in preceding years. Overall, the total number of HR staff at organisations stands at a median of three employees.

Small organisations with fewer than 250 employees were found to have the lowest median number of employees per single HR staff member (a ratio of 1:47). By contrast, large organisations have a ratio of one HR member of staff to 99 employees.

Chart 6: Average number of employees to each HR practitioner by organisation size

 

As may be expected, the composition of HR teams varies by the number of employees in the organisation. For example, large organisations have a median of 18 HR employees in total, split across the three seniority groups, with a median of two senior HR leaders per organisation.

Table 1: Composition of HR departments by number of employees (median)

	Senior leaders (Director or Head of HR)	HR managers (department or section level)	HR staff (HR business partner, officer, advisor, assistant)	Total
1-249 employees	1.0	0	1.0	2.0
250-999 employees	1.0	1.0	4.0	6.5
1,000+ employees	2.0	3.0	13.0	18.0
Whole sample	1.0	1.0	2.0	3.0

 

Differences are also observed by broad sector, with responding organisations in the public-services sector having the highest median number of HR employees at 6.7. However, there is a fair amount of variation between organisations, with the lower quartile at two, and upper quartile at 11. This is likely explained by the variability in the number of employees.

Across the range of roles, the manufacturing-and-production sector tends to have the lowest median number of HR employees in comparison with other broad sectors. Private-sector services have a median of three HR colleagues, which was in line with the whole sample median.

Our research

This report is based on original research carried out between November and December 2023. We received responses from 177 organisations, representing a total of 116,248 employees. The organisation breakdown by industry is as follows:

• 67 (37.9%) are in private-sector services;
• 49 (27.7%) are in manufacturing and production;
• 30 (16.9%) are in public services; and
• 31 (17.5%) are in not-for-profit.

Broken down by workforce size, the respondent organisations comprise:

• 99 (55.9%) having between one and 249 employees;
• 51 (28.8%) having between 250 and 999; and
• 27 (15.3%) having more than 1,000 employees.

Related resources

• Five HR priorities for 2024
• Managing change successfully
• HR must build new skills to leverage AI use cases