Human Resources Generalist/Business Partner Functions, Compensation, and Trends Complimentary Copy

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Complimentary Copy

Prepared and provided to you compliments of the HRG Search Team:

Mike Coman/CEO, Brenda Snyder/President,

Donna Franz/ Search Consultant, and

Sue Oberliesen/ Search Project Manager

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2 HRG Search, Brenda Snyder, President

303-964-8886, Brenda.snyder@hrgsearch.com, http://www.hrgsearch.com/

Introduction

HRG Search is a retained search firm with a specialty in the Human Resources discipline, including Talent Management, Human Resources Generalist/Business Partner, and Organization Development. We have created this report to assist business leaders in understanding and staffing the Human Resources Generalist/Business Partner functions. This report reflects Human Resource Generalists or Business Partners at a managerial level and includes information on the structure, roles, compensation, experience, and education required by organizations.

Project Approach

This report incorporates data from two sources:

1. HRG Search’s proprietary database of individuals in Human Resource roles

2. Information gathered by HRG Search as a result of staffing Generalist/Business Partner search engagements.

Appendix A provides a list of companies that either participated in the interviews or were included in the data analysis.

Executive Summary Overview

Human Resources Generalist/Business Partner positions are held by individuals focused on providing end to end Human Resources support for business leaders. These positions are client facing and aligned to a specific business/division or department within an organization. These positions do not include subject matter expertise type positions typically found in Centers of Expertise/Excellence such as Talent Management, Learning, Organization Development, Rewards (Compensation & Benefits), Workforce Management and Analytics, HRIS, Shared Services, Labor Relations, etc.

The reporting structure varies depending on the organization’s specific hierarchy. The Human Resource Generalist/Business Partner:

 In smaller companies, reports to a Director who may report directly to the President or Chief Executive Officer

 In larger companies, may report to levels other than Director, as there are sometimes more levels than Director, i.e. Deputy or Associate Human Resource Director, Associate Vice President, Vice President, etc.

 In larger companies, is led by a Vice President or Senior Vice President who reports to the most senior Human Resources leader

The average base compensation for the Vice President level is $174,000 and the average bonus is 41%. The average overall work experience for this level is 24 years. 43% of incumbents hold a Master’s degree; and a Master’s degree is preferred when staffing at this level.

The average base compensation for the Director level is $145,000 and the average bonus is 25%. The average overall work experience at the Director level is 20 years. Most incumbents hold a Master’s degree, and a Master’s degree is preferred when staffing at this level.

The average base compensation for the Manager level is $105,000 and the average bonus is 14%. The average overall work experience at the Manager level is 18 years. Most incumbents hold a Master’s degree, and a Master’s degree is preferred when staffing at this level.

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The Human Resource professionals shared with us the many challenges they will face over the next 12 months. Three key challenges were identified as follows in priority order:

1. Attracting and retaining top talent for their organization. It is more and more difficult to find skilled talent, especially with technical skills. The market is becoming more competitive and increasingly difficult to convert candidates into employees. It is not unusual to compete against multiple offers. Although Talent Management and personal development are playing a much bigger role in the success of employee retention, the budget constraints are challenging.

2. Standardizing and implementing policies and processes, especially in global and new markets which include dealing with technology investment challenges. Standardized Human Resource processes, policies, and procedures were also cited as a concern and need so that managers have more time to do the strategic work.

3. Benefits, health reform, and new regulations. These place a burden on Human Resources to understand these issues and handle employee frustration around economic uncertainty, less growth; and with new legislation, the possible loss of benefits and retirement.

Likewise, much of this is supported by other research efforts and sources outside of HRG Search as follows:

1. The three biggest challenges facing Human Resource executives over the next ten years are retaining and rewarding the best employees (59%), developing the next generation of corporate leaders (52%), and creating a corporate culture that attracts the best employees to organizations (36%). Source: The Top Workplace Trends According to HR Professionals; Society for Human Resource Management.

2. Six competencies for Human Resources professionals that matter most: Strategic Positioner, Human Resource Innovator & Integrator, Change Champion, Technology Proponent, Capability Builder, Credible Activist. Source: Resource Competency Study (HRCS), led by Dave Ulrich and Wayne Brockbank of The RBL Group and the Ross School of Business at the University of Michigan with the assistance of global research partners.

3. Top trends impacting Human Resources: Tapping Skills Anywhere, Anytime; Managing Your people as a Workforce of One, The Rise of the Extended Workforce; Human Resources Drives the Agile Corporation; Technology Advances Radically Disrupt Human Resources as Usual; The Global Talent Map Loses Its Borders; Social Media Drives the Democratization of Work; Human Resources Must Navigate Risk and Privacy in a More Complex World; Human Resources Expands Its Reach to Deliver Seamless Employee Experiences. Source: The Future of HR, Accenture, April 25, 2013, http://www.accenture.com/us-en/Pages/insight-future-of-hr.aspx.

Organizational Structure and Maturity

The organizational structure and roles for Human Resources at the corporate and business unit level are driven by several factors:

 The organizational structure of the business, i.e. centralized, decentralized, multi-divisional, strategic business unit, etc.

 The maturity level of the business; maturity is defined as the level at which a business has evolved from managing day to day issues up to leading a dynamic learning organization

 The value placed on human capital strategies by the senior leaders of the organization Functions and Roles

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Most companies have a Center of Excellence model with staff at the corporate level responsible for developing strategy, processes, and programs. The Human Resource Generalists/Business Partners are responsible for providing input and deploying the strategy, processes, and programs for his/her assigned business unit/division or department.

In other cases, the Human Resource Generalists/Business Partners are responsible for a variety of functions in the organization, depending on the size and maturity level of the business. In larger organizations, these roles are more clearly defined and report to Vice Presidents of Human Resources, Senior Vice Presidents, and Chief Human Resource Officers.

Depending on the size of the organization, the Human Resource Generalist/Business Partner has responsibility for the following activities:

 Organizational Competencies

 Succession Planning

 Performance Management

 Development and Coaching

 Retention

 Recruiting and Staffing

 Role Profiles/Competency  Leadership Development  Assessments – 360  Compensation  Benefits  Employee Relations

In mature organizations with Centers of Expertise/Excellence, these individuals are implementing processes. In less mature organizations, the Human Resource Generalist/Business Partner develops and deploys processes.

Generally, the Human Resources Generalist/Business Partner position is defined as follows: “The Human Resources Generalist/Business Partner is responsible for the strategic and operational Human Resource activities for a specific client group. This individual partners with business leaders and serves as a consultant to management on Human Resource related issues. The Human Resources Generalist/Business Partner assesses and anticipates organizational and people-related needs and develops integrated solutions. The Human Resources Generalist/Business Partner formulates partnerships across the Human Resources function to proactively deliver value added services to management and employees that reflect the business objectives of the organization. The Human Resources Generalist/Business Partner maintains an effective level of business literacy about the business units’ financial position, its mid-range plans, culture, competition, and impact on Human Resources.”

Titles and Levels

Many levels and titles exist within the Human Resource Generalist/Business Partner function, ranging from Human Resource Assistant to Chief Human Resource Officer. The reporting structure varies

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mainly by size of the company and the organizational structure of the business. In smaller companies, a Director may report directly to the President or Chief Executive Officer and a Human Resource Generalist/Business Partner may report to a Director. In larger companies, there are more levels, i.e. Deputy or Associate Human Resource Director, or Senior Vice President Human Resources and Senior Vice President Human Resource Operations. In a matrix structured company, a Human Resource Director may report to the Vice President of Human Resources and the President or General Manager of a strategic business unit. The following are the typical titles and levels within the Human Resource organization in our study:

Vice President Human Resources

The Vice President of Human Resources is typically the top level Human Resources position for the Generalist/Business Partner function. Depending on the organization, these individuals may report to the Chief Human Resources Officer or they may be the top Human Resource person for the firm. They are strategically focused and the decisions they make have a significant impact on the organization. They are responsible for the leadership in developing and executing Human Resources strategies in support of the overall business plan and strategic direction of the organization.

Human Resource Director

Typically the Human Resource Director plays a leadership role in the organization providing consultation to management on strategic staffing, compensation, training and development plans; and is responsible for the smooth and profitable operation of the Human Resources Department. Depending on the size of the firm, this position reports to the Human Resources Vice President or the President of the organization. In some cases these individuals report to the Chief Administrative Officer or Chief Operations Officer of the organization. In mature firms, this position may have a matrix reporting relationship into the business unit/division or department he/she supports.

Human Resource Manager

The Human Resources Generalist/Business Partner is a Human Resource Manager who has a broad variety of responsibilities from staffing the organization, training and developing employees, maintaining compensation programs, developing personnel policies and procedures, and ensuring that internal policies and programs conform to the law. In small to mid-sized companies, Human Resources Managers manage the staff and overall function of Human Resources services, policies, and programs. Depending on the size of the firm, this position reports to a Human Resource Director or the Human Resources Vice President. In mature firms, this position may have a matrix reporting relationship into the business unit/division or department he/she supports.

Human Resource Assistant/Receptionist

Handles lower level Human Resource administrative functions such as recruiting support, data entry, and benefits administration.

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Compensation

Title Average Range

Base Bonus Base Bonus

Vice President $174k 41% $135k-$210k 35%-65%

Director $145k 25% $90k-$210k 0%-50%

Manager $105k 14% $65k-$160k 0%-40%

This data reflects the average compensation of incumbents interviewed and the salary an organization offers when staffing these positions. There is a wide variance in the range due to size of company and reporting structure.

Years of Experience

Title Years of Experience

Average Required

Vice President 24 Years 10 Years

Director 20 Years 10 Years

Manager 18 Years 5 Years

Of our respondents, the “Average Years of Experience” reflects the current average years of the incumbents interviewed. The “Required Years of Experience” is what the organization is looking for when staffing this level position.

Education

Title Degree Required

Bachelors Masters

Vice President 57% 43% Bachelor’s, Master’s preferred

Director 37% 63% Bachelor’s, Master’s preferred

Manager 50% 50% Bachelor’s, most preferred Master’s

Of our respondents, most incumbents had Bachelor’s and Master’s degrees. Likewise, “Required” is what the organization is looking for when staffing at this level.

The View of Human Resources by Business Leaders

Overall, the view of the Human Resource function by business leaders is very positive. In small to medium sized businesses, leaders see a need for Human Resources to transform to more of a strategic partner and cultivate a more business like partner relationship. Human Resources is seen as a valued and necessary function; an important contributor to the overall business.

In large companies, the Human Resource function is seen as a strategic and strong business partner, making important contributions. They are viewed more as change agents influencing the culture of the business and driving performance through human capital. However, no matter what size the business is, the maturity level plays a big role in how the Human Resource function is viewed and in turn, how it contributes to the growth and value of the company.

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In less mature organizations, Human Resources is viewed as tactical and transactional and Human Resource leaders are focused on educating leaders on the strategic value that Human Resources can bring to the organization. They do this by first delivering on the basic requirements of Human Resources, which opens the door for involvement in the business conversations and strategic participation in running the business.

The Human Resource Group (HRG) is a retained search firm focused on finding transformational leaders across all disciplines and industries for their clients. In addition to search services, HRG offers OE and OD consulting services under the leadership of Brenda Snyder, SVP Search & OE Consulting. For more information about HRG Search, please visit our website at www.hrgsearch.

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Appendix A

COMPANIES

Company Industry # of Employees Revenue -

billions

Fortune 500 Ranking

(2012)

Abrazo Health Health Care Delivery 5,200 Privately Held not ranked

Ace Asphalt Construction

201-500

employees Privately Held not ranked

Alcoa Aluminum 60,000 $23.41 128

American Commercial

Lines Transportation 2,200 $403.9M not ranked

Anadarko Petroleum Oil & Energy 5,000 $13.40 207

Ascend Performance

Materials Chemicals

730 (FT

employees) Privately Held not ranked

ATK Aerospace & Defense 17,000 $4.40 not ranked

Babcock & Wilcox

Mechanical or

Industrial Engineering 12,700 $2.90 not ranked

Barnes Distribution

Commercial Equipment

& Supplies 1,300 $120M not ranked

Batesville Casket Funeral Services 3,460 $640M not ranked

Black & Veatch Construction 10,000 $3.30 not ranked

Cargill Food, Drink & Tobacco 140,000 $133.90

#1 America's Largest Private Companies CH2M Hill Construction 30,000 $5.56 #63 America's Largest Private Companies

City of Boulder Government 1,260 $248M not ranked

Composite Tech Corp Renewable Energy 104 Privately Held not ranked

ConAgra Foods Food Processing 26,100 $13.83 209

Convergys

Customer/ Information

Management 77,000 $2.01 not ranked

Cooper Industries (subsidiary of Eaton

Corporation Inc.) Electrical Equipment 26,000 $5.40 not ranked

Dana Automotive 23,000 $7.30 356

Delta Faucets (subsidiary of Masco

Corp.) Building Materials 32,500 $7.60 336

Dow Chemicals Chemicals 54,000 $56.80 52

DTE Energy Electric Utilities 10,000 $8.80 299

Eaton Components 103,000 $16.31 not ranked

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Company Industry # of Employees Revenue -

billions

Fortune 500 Ranking

(2012)

Englobal Land &

Regulatory Oil & Energy 1,400 Privately Held not ranked

Excel-Polymers Chemicals 500+ Privately Held not ranked

Exelon Energy 27,000 $18.90 not ranked

Exide Technologies Manufacturing 10,000 $2.9 not ranked

Ford Motor Vehicles 171,000 $134 10

General Mills

Food: Major

Diversified 41,000 $17 169

Gerdau Ameristeel Iron & Steel 45,000 $18.50 not ranked

Granite Construction Heavy Construction 4,100 $1 not ranked

Hach Company - (subsidiary of Danaher Corp)

Industrial

Conglomerates 63,000 $18.30 152 (Danaher)

Haliburton Oilfield Services 70,000 $28.50 106

Hill-Rom Medical Technologies 6,500 $1.50 not ranked

Home Depot Home Improvement Chains 321,000 $74.80 34 Honeywell Industrial Conglomerates 132,000 $37.70 78

Humana Managed Health Care 40,000 $39 73

Integral Technology 2,000 Privately Held not ranked

Invacare Medical Manufacturing 6,000 $1.80 not ranked

Johnson & Johnson Pharmaceuticals: Major 118,000 $67 41

Lamson and Sessions Manufacturing 500+ Privately Held not ranked

Lowes

Home Improvement

Chains 234,000 $50.50 56

Martin Marietta

Materials Construction Materials 5,200 $2.04 not ranked

MediaNews Group Media 10,500 Privately Held not ranked

Momentive

Performance Materials Special Materials 10,000 Privately Held not ranked

MWH Global Civil Engineering 6,000 Privately Held not ranked

Novelis Aluminum 11,000 $9.80 not ranked

Olin Corporation

Chemicals,

Manufacturing 3,900 $2.18 not ranked

Owens Corning Construction Materials 15,000 $5.20 476

Pepsi Americas

Beverages:

Non-Alcoholic 297,000 $65.50 43

Phillips Manufacturing Building Materials 200+ Privately Held not ranked

ProBuild Building Materials 9,223 $3.60 not ranked

Raytheon Aerospace & Defense 68,000 $24.40 124

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billions Ranking (2012)

Rexnord Machinery 7,300 $2 not ranked

Roadway Express

(YRC Worldwide) Transportation 32,000 $4.80 not ranked

Sara Lee Consumer goods 12,000

(split- info not

available) not ranked

SC Johnson Consumer goods 12,000 $11.75 not ranked

Sherwin Williams Building Materials 32,000 $9.50 282

Sony Conglomerate 146,300 $72.35 not ranked

Special Metals Corp Metals Supplier info not available info not available not ranked

Spirit Aero Systems Aerospace and Defense 11,845 $4.17 not ranked

St. Gobain Building Materials 187,890 $59

#161- Global Top Company

State of Colorado Government info not available Public not ranked

Sylvan Pools Construction info not available Privately Held not ranked

The Maschoff Group

Agriculture/ Food

Production info not available Privately Held not ranked

The Scotts Company

Manufacturing-

Agriculture 6,000 $2.80 not ranked

Thermo fisher Medical Specialties 39,000 $12.70 220

Tyco International Security 69,000 $17.30 not ranked

United Technologies

Industrial

Conglomerates 218,000 $59.80 50

US Cotton Consumer goods 500+ Privately Held not ranked

http://www.hrgsearch.com/

and the Ross School of Business at the University of

global research partners.