US human resources organizations increased spending on talent initiatives in 2014, following a rise in employee turnover to 20 percent in 2013 – up from 17 percent in 2010, according to new research from Bersin by Deloitte. The research findings appear in "HR Factbook 2015: Benchmarks and Trends for U.S. Organizations," Bersin by Deloitte's interactive HR benchmarking study.

Summarized in a complimentary WhatWorks® Brief, the findings show that HR budgets rose an average of 4 percent to $2,936 per employee in 2014. Staffing and technology were the two biggest spending items for the year, with HR staffing up 3 percent on average and one in five organizations citing "technology" as the biggest area for increased investment. The new research provides key benchmarks and guidance to help human resources teams make valuable investment decisions. 

"With the possibility of greater employee attrition on the rise – helped in part by the economic recovery and greater job opportunities – high-impact HR organizations are realizing that employee engagement means connecting with employees more often than once or twice a year through a survey," said Karen O'Leonard, vice president, benchmarking and analytics research, Bersin by Deloitte, Deloitte Consulting LLP. "These organizations typically invest more in HR programs and services, and the investment pays off in better talent outcomes."

The study findings also show that:

• HR organizations at the highest level of maturity spend more than their peers. Mature HR organizations – those with HR functions integrated into the business – spend $4,434 per employee on average, compared with just $2,112 among those at the lowest level of maturity, which tend to have compliance-driven HR functions. 
• Mature HR organizations have more staff and less involuntary employee turnover. HR departments that are business integrated have slightly more than twice as many HR personnel – with one HR staff person for every 64 employees compared to their peers at the lowest level of maturity. These high-impact HR organizations also have lower involuntary turnover compared with compliance-driven HR organizations (8 percent vs. 11 percent). 
• One-fifth of the study's 251 responding organizations said that HR technology was a key area of increased investment in 2014. Bersin by Deloitte's recent research, "Vendor Management in HCM Software Implementation," suggests that the HR technology market is hot, with many organizations trading in outdated systems for new systems offering better integration, improved ease of use and more powerful reporting and analytics capabilities. 
• HR budgets vary substantially by industry, and some sectors fared better than others. For example, financial service companies increased their HR spending by 10 percent to an average of $3,729 per employee. By contrast, retail organizations cut their HR budgets an average of 4 percent during the year as they struggled to cut expenses and increase profits at a time of increasing online sales coupled with tentative consumer demand.

The study was conducted through collaboration between Bersin by Deloitte and Human Resource Executive magazine. Study findings will be featured in a story about the HR Factbook research that appears in today's Human Resource Executive Online.