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February 22, 2018

Human resources departments have evolved over the past several decades from mainly serving transactional business functions, like overseeing compensation and benefits, to contributing heavily toward strategic planning and overall business efficiency through activities like talent recruitment, retention and development. As industries become more driven by technology and innovation, competition for top talent is becoming ever steeper, and new employment standards and regulations continue to emerge. It’s critical for businesses to invest appropriately in HR to remain competitive and compliant. But how much should a business spend on its HR function?

It depends on several factors, including industry, number of employees and overall business objectives.

This article explores how and why HR evolved over the last century, what transactional and strategic functions are covered by HR and how to benchmark and evaluate HR costs.