Discover four fundamental HR budget benchmarks to guide cost optimization strategies and prioritize future HR investments
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HR Budgets: Efficiency Benchmarking Insights for CHROs
Benchmarking HR budgets and investments is key to good spending decisions
A well-planned HR budget is essential to the function’s success and ensures critical HR initiatives receive adequate funding. However, only 20% of HR leaders consult external benchmarks for their budget recommendations.
Download the 2025 CHRO budget benchmarks research to:
- Measure HR spend against more than 500 peer organizations and identify opportunities to reallocate resources
Prioritize future HR investments
- Design a flexible budget that keeps up with future organizational needs
About HR Budgets
Standard HR budgets typically include spending allocations for recruitment, learning and development (L&D), HR technology and total rewards.
HR budgets will require strategic realignment to keep pace with future organizational demands and ensure sustainable growth. By leveraging benchmarking data, CHROs can advocate with confidence for spending on new initiatives, defend preexisting spending, identify opportunities to drive functional efficiency and make the right future investment decisions.
High-quality peer-group benchmarks are an important part of your future budget planning cycle, helping you to:
- Prioritize (or reprioritize) spending and identify areas of over- or underinvestment
- Surface opportunities to reallocate resources
- Advocate for investment opportunities
- Boost your spending confidence
HR budget spend metrics are also a key measure of your HR function's overall efficiency and performance and serve as important inputs for larger discussions about HR strategy by showing how well their function is performing in its current state. Also see the Gartner HR Score tool for measuring functional effectiveness and maturity beyond spend.
The Gartner HR Budget and Efficiency Survey provides a dataset against which Gartner for HR Leaders clients can benchmark their performance through an interactive tool that provides personalized results against their peer group. (Gartner clients, visit HR Budget & Efficiency Benchmarks.)
HR Budget FAQs
What are key metrics for HR budgets?
A range of metrics can help drive HR budget decisions, including:
- HR spend as a percentage of revenue
- HR spend per employee headcount served
- Employee headcount served per HR staff FTE
- Employee headcount served per HR business partner FTE
- HR personnel spend per HR staff FTE
Why are HR budget benchmarks important?
Benchmarks can serve as a foundational component to guide CHROs in rethinking and reprioritizing functional spending, providing context for required optimization strategies and advocating for critical investment opportunities.
How can HR leaders use HR budget benchmarks to improve their strategy?
Leaders can link cost and efficiency benchmarks to a larger discussion about HR’s strategic priorities and business impact by aligning HR spending and staffing allocations to business objectives. This enables deliberate decision making on which HR services should be best in cost/efficiency versus best in quality/effectiveness.