HR is no longer just a support function - It’s a strategic partner driving business success. With AI becoming an integral part of the workplace, many HR leaders are now asking one key question: How many people will we really need? Well, that’s where HR team size benchmarks come in.
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Before diving into benchmarking, it’s important to understand what HR really does. Human Resources manages an organization’s most valuable asset - Its people. From talent acquisition and employee engagement to performance management, training, and compliance, HR touches every part of the employee lifecycle.
Over the years, HR has evolved into a strategic business partner that aligns workforce strategies with organizational goals, shapes company culture, and ensures compliance with changing regulations. In many organizations, HR activities are supported by outsourced providers, such as recruitment, allowing HR teams to operate more efficiently with fewer people.
Team size refers to the number of individuals within the HR department. It encompasses professionals responsible for various HR functions, such as HR managers, recruiters, trainers, and specialists in areas like compensation and benefits.
Getting the HR team size right is crucial for organizations to optimize not just their workforce, but overall performance and profitability. A team that is too small may struggle to meet the diverse demands of a growing workforce, while an excessively large team could lead to inefficiencies and increased costs. Striking the right balance is essential for any well functioning HR department.
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This is the main ratio when it comes to HR team size benchmarking. It measures how many employees each HR staff member supports, giving insight into HR workload capacity.
HR to Employee Ratio = Total Number of Employees / Number of HR Employees
A company with 500 employees and 10 HR staff: 500 / 10 = 50 employees per HR employee
This metric shows the proportion of total employees dedicated to the HR function, highlighting the size of the HR team relative to the organization.
HR as % of Employees = (Number of HR Employees / Total Employees) × 100
10 HR employees out of 500 total employees: (10 / 500) × 100 = 2%
A higher percentage means the HR team is relatively large, which often suggests that it is inefficient and should be investigated further. A lower percentage reflects a smaller HR team, which may be efficient if using technology, or may be stretched too thin across the business.
This measures the proportion of a company’s revenue spent on HR salaries, helping evaluate how efficiently the HR function contributes to overall business performance based on cost.
HR Salary Cost as % of Revenue = Total HR Salaries / Total Revenue × 100
If total HR salaries are $1.5M and the company has $50M in revenue: $1.5M / $50M × 100 = 3%
A lower percentage indicates that HR salaries consume a smaller portion of revenue, suggesting cost efficiency, whereas a higher percentage may reflect a more senior or specialized HR team, or potentially higher labor costs. Comparing to industry benchmarks helps ensure that HR spending is balanced against revenue generation and business strategy.
This metric accounts for all HR personnel costs including salaries, benefits, bonuses, and other compensation relative to total revenue, providing a complete picture of the HR cost base.
HR Personnel Cost as % of Revenue = Total HR Personnel Costs / Total Revenue × 100
If total HR personnel costs are $2M and total company revenue is $50M: $2M / $50M × 100 = 4%
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In 2025 the workforce is more diverse and dynamic than ever. With the rise of remote working, the gig economy, and a multi-generational workforce, HR faces new challenges in talent management and employee engagement. Measuring team size allows organizations to adapt their HR departments to effectively address these evolving dynamics.
Advancements in technology continue to reshape the HR landscape. Automation, AI, and data analytics are becoming integral to HR processes. Benchmarking team size enables organizations to align their HR technology adoption with industry standards, ensuring they are equipped to harness the benefits of cutting-edge HR solutions.
In an era where organizations are continually seeking ways to optimize costs, HR team size benchmarks can provide valuable insights. By ensuring the right balance between team size and organizational needs, companies can achieve cost efficiencies without compromising the quality of HR services.
As HR transforms into a strategic partner, aligning HR strategies with overall business objectives becomes paramount. Measuring team size enables organizations to ensure that their HR department is appropriately sized to support strategic initiatives, contributing to the organization's long-term success.
HR team size benchmarking is a critical componentof strategic workforce management in 2025. By analyzing ratios such as the HR to employee ratio, organizations can optimize their HR departments for maximum efficiency and effectiveness.
As the HR function continues to evolve, staying informed about industry benchmarks ensures that companies remain agile, adaptive, and well-positioned to meet the challenges of the future. As you embark on your HR team size benchmarking journey, remember that finding the right balance is key to unlocking the full potential of your most valuable asset – your people.
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