Targeted Advisory case study
HR Was the Right Size. The Shape Was the Question.
The situation
The question behind the question.
Every HR leader is asked the same question sooner or later: is HR too big? The usual answer is one ratio, HR people per 100 employees, set against a survey average. It settles the size and says nothing about the shape. This firm’s Head of HR wanted the other half: how its HR team was built, practice by practice, against institutions it actually competes with for clients and talent.
“How does our HR headcount compare with our peers?”
Compare the shape, not just the size: where each HR professional sits, from strategy to operations, against peers measured with the same lens.
How we worked
How the work unfolded.
One taxonomy for all
We started with the ruler, not the data. A benchmark is only as good as its definitions, so we built one HR taxonomy before counting anyone: 4 domains, from leadership and strategy to operations and services, 12 practices and 39 role types. Every profile, at the client and at each peer, was classified against the same list. Job titles differ from firm to firm; the taxonomy does not.
Choose the peers
Then the panel. 11 institutions headquartered in the same country, from about 700 to more than 7,500 employees, covering some 34,000 employees and 666 HR professionals between them. Peers were chosen for the market they share with the client, not for the convenience of their data. All were read from the same public source, so every firm carries the same bias, and the client’s own count was checked against its internal HR headcount before any comparison.
Read size, then shape
Then 2 measures at every level. Employees served per HR professional answers the size question. Each practice’s share of the firm’s own HR team answers the shape question, and corrects for company size. Both were set out as ranges, through the quartiles, for the whole function, each domain and each practice. Small HR teams swing hard in percentages, so extreme values were flagged, not quoted.
Separate size from mix
The answer came in 2 parts. On size, the firm sat close to the peer median: no case for adding or cutting heads. On shape, it stood apart: most of its HR team sat in expertise and business partnering, operations was thinner than at peers, and 3 practices that peers staff had no dedicated role. Each gap was then read against the firm’s business and HR priorities, so every shift had a reason, and we pointed to where to rebalance first: operations, and the missing strategy and governance capacity. Same envelope, different mix.
Size and shape, 2 different questions
Size. Employees served per HR professional, against the peer range. It tells you whether HR is too big or too small, and nothing more.
Shape. Each domain’s and practice’s share of the HR team, against the same range. It tells you where the people are.
Gaps. Practices peers staff and the firm does not, read role type by role type.
A function can be the right size and the wrong shape. Only the second question tells you what to change.
What moved
What changed, and what didn't.
The Head of HR took the benchmark to the executive committee with a factual answer to the size question and a map of where the mix differed: staffing at the peer median, a structure weighted towards expertise and partnering, and 3 practices with no dedicated role. The discussion moved from how many HR people to where they should sit, and where to start.
No rebalancing had been decided when we handed over; the benchmark fed a structure discussion still open. It counts people, not cost, workload or quality of service, and public profiles under-represent administrative roles, which the internal validation corrected for the client but not for its peers.
What we'd say to a peer
Asked whether HR is too big, most functions answer with one ratio. Ask the second question too: where do your HR people sit, practice by practice, against peers measured with the same ruler? A function can be the right size and the wrong shape, and only the shape tells you what to change.
Own approach in 4 steps; 39-role HR taxonomy; 11-peer panel; 2 measures at 3 levels; internal validation of the client’s count.
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