Gill Taylor: No need to have an HR function? Think again

Opting not to spend money on a trained human resources specialist has its risks, writes the sector HR consultant

Gill Taylor
Gill Taylor

A survey of HR roles, responsibilities and priorities is conducted each year by the support and advice firm Xpert HR. It includes information from the public and private sectors and provides a useful insight for people working in the charity sector into how the other sectors operate, as well as a benchmark for how much resource charities should put into HR.

The survey for 2014, which elicited 338 responses, showed that the median budgeted running cost for an HR department was £833 a year per employee. The median ratio of HR staff to employees was 1:70. The employee figure represents headcount rather than full-time equivalents, because it is believed that each employee requires a similar amount of HR time regardless of how many hours they work. Staff included in the HR headcount included those working in HR, training, recruitment, reward, organisational development and equal opportunities. Those excluded were health and safety, payroll and pensions.

Opting not to spend money on a trained HR specialist has its risks. Employment law changes and contracts can be expensive to get wrong

Looking at the figures from different sectors, the median ratio of HR practitioners to employees was 1:63 for the private sector and 1:75 for the public sector. These figures suggests charities with more than 75 staff should employ specialist trained HR practitioners, but this would be difficult financially for many smaller organisations, which is why HR tends to be part of the chief executive function, with HR admin delegated to an office manager or a general PA or administrative role.

Opting not to spend money on a trained HR specialist has its risks. Employment law changes all the time and contracts and policies can be expensive if you get them wrong or leave them running when they are out of date. A review every two to three years is wise.

HR priorities in the different sectors can illustrate the effect that government policy has on how we run our organisations – and on HR. According to the survey, HR practitioners in the private sector spend most of their time on auto-enrolment of pensions, pay, benefits and staff recruitment and development; those in the public sector spend most time on restructuring, redundancies, reward, terms and conditions and leadership – which is pretty much my experience in the third sector.

Other HR metrics from the latest Labour Market Outlook by the Chartered Institute of Personnel and Development indicate that pay increases of between 1 and 2 per cent are expected in the voluntary sector, although 15 per cent of voluntary organisations expect a pay freeze in 2015 and 41 per cent don't know because pay will depend on performance. In the 12 months to December 2014 a quarter of voluntary organisations experienced a pay freeze, but 67 per cent paid increases. Perhaps this means the financial outlook for charity workers in 2015 will be brighter.

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