Is a 3-Person HR Team Enough for Managing 500 White-Collar Employees in a Listed Company?

Dear Seniors, I need your suggestions on identifying the ideal manpower strength for the HR department. Currently, there are 3 people in the HR team. Do you think this is sufficient and good enough to serve a listed company with a white-collar employee strength of around 500? The HR team also has to oversee 6 Directors, 14 departments, and a decision-making process that is more democratic, requiring any deviation or policy decision to be reviewed by at least 6+3 persons.

Every month, we undergo at least 1 audit, whether it is customer, statutory/regulatory, or internal. Our operations are based on a semi-automated system, with 70% of systems operating manually.

Current HR Activities

The following activities are currently being carried out in HR:

1) Recruitment to Separation administration, Induction, Onboarding (with an average of 3-4 joinings). We aim to maintain a Turnaround Time (TAT) of 30 days and an annual attrition rate not exceeding 14%.

2) Talent Retention Initiatives

3) Business Partner role with Department Heads

4) Performance Management (Monthly tracking of performance, handling 30-35 new hires until probation completion, conducting annual & half-yearly appraisals). Drawing insights from appraisal data, compiling internal customer feedback for approximately 80 employees with 2 to 4 internal customers.

5) Job descriptions & KRAs: Compilation, review, integration with Business Objectives.

6) Compensation & benefits administration

7) Disciplinary Action, Counseling, Conflict resolution

8) Grievance Handling

9) Prevention of Sexual Harassment (PoSH) Compliance

10) Audit & Compliance (MOH & Customer, Statutory audits)

11) Training planner design & implementation

12) Automation of HR processes & negotiating with Programmers. Transitioning to a new ERP system.

13) Engagement activities handling (1 per month)

14) Developing Policies & procedures, overseeing their implementation (Data & Trend analysis, capturing deviations), new initiatives, approvals & implementation

15) Medical check-ups

16) Cultural Integration of new hires (Middle-senior level)

17) Handling uncertainties like COVID, any changes impacting organizational structure

18) Reporting to the Board of Directors

Do you think the above activities can ideally be carried out by 3 people in HR, where one resource is solely focused on hiring, considering the company's collective decision-making system?

Thank you.

Dear Akansha,

With 500 employees, 70% automation, and various HR functions currently managed, I suggest the following structure:

1. The total HR team size, including yourself, could consist of 5 professionals.

2. The functions you mentioned could be grouped as follows:

* Strategic planning, policy-making, and overseeing critical areas such as Annual Performance Appraisals, Compensation Management, etc. - under the supervision of the Head of HR

* Recruitment, selection, onboarding, probationary assessments, exits, and employee engagement

* Employee relations - managing employee records, disciplinary issues, grievance handling, compliance with labor laws, and liaising with government authorities

* Training and Development - implementing planned training activities, providing feedback on training effectiveness, assisting in training needs analysis, and maintaining records

* Personnel Administration - managing time office, leaves, payroll, exit procedures, and records

I have provided a broad overview, and in order to enhance overall service effectiveness and delivery, you may consider reorganizing functions based on practical considerations.

I welcome input from my esteemed colleagues for further improvements.

Regards,
Vinayak Nagarkar
HR and Employee Relations Consultant

With 70% of manual operations, it is difficult to manage 14 departments with 500 employees by a team of 2 to 3 employees in the HR department.

Analyzing HR Activities

My take is that all activities under the purview of HR must be analyzed based on critical and non-critical activities, as well as scheduled and periodical activities. Having said this, the function-wise HR department must have KPIs and KRAs worked out. Then, based on the workload and criticality of the HR functions, internal departments in HR should be formed considering present and future needs.

Example of HR Department Structure

1) HR/IR Policies and Administration & Records - 3

2) Training, recruitment selection, and onboarding - 2

3) Employee Wages Compensation, payroll, statutory compliance, and FnF Settlement - 3 (Manual) or 2 with HRIS automation.

4) Employee Welfare and Engagement - 2

5) Employee assessment and performance - as required (as this shall include other department heads and the Administration Department).

The above organizational setup, if skilled enough, can manage up to 1200 to 1500 employees with the best resources available. It is also important to ensure that policies are formed with due care to accept change and exceptions as and when required, with the best directives and planning measures escalated by the directors.

Last but not least, every department or individual in the organization must be made aware of HR policies and procedures before implementation through wide publicity. Remember that happy and empowered employees contribute the best to the organization when the Human Resource department ensures that their care is taken into account, considering their personal growth, safety, and their families' welfare.

The ideal strength for the HR Department is 1:100. With this ratio, having 5 individuals in HR should be sufficient to take care of the present workload.