We were pleased to see the Saratoga April Newsletter emphasize the hidden cost of HR, especially in the staffing function in their Metric of the Month: Indirect HR.
They illustrated the point using an example of two companies in comparison. The first company has a ratio of one HR person for 120 employees and HR cost per employee of $1,200. The second has a ratio of 180 and spends $1,000 per employee.
You may think that the second employer is better off. Until you realize that all staffing costs are reassigned to the line and are not accounted for in the HR budget! We covered this topic and more in our report on ROI, but we are often surprised to see how many companies struggle to prove a 10X return because the budget is not theirs!
I hope this piece coming from Saratoga (now part of PriceWaterhouseCoopers and an entity close to the heart of many CFOs) will help to convince them.
