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Why HR's Organizational Structure Matters

business.com editorial staff
business.com editorial staff

As the human resources function evolves to become a stronger, more strategic partner to the business, new priorities continue to shape what we do and how we do it. Does your structure enable emphasis

  • Human resources is an often overlooked, yet vital department to the success of a company.
  • A good HR department helps foster a healthier work environment and organize productivity to increase financial success and better the work lives of employees.
  • Companies should consider filling a few different HR roles to build a strong department.

Metrics, analytics, workforce planning, job evaluation, recruiting, employee engagement, performance management, compensation, benefits are a few examples of the many important areas of focus for HR. How can leaders identify an organizational structure that will best enable HR to most positively impact business performance and sustainability?

An organizational structure is the framework of the department. It lays out and defines priorities through the design of positions with generalist and/or specialist roles, indicates reporting relationships and the fit of each person in the big picture, and establishes decision-making as centralized or decentralized.

An effective organizational structure has its roots in making a positive impact on the business and, therefore, is aligned with the business strategy. It flows with the company culture, and it is designed to attract and retain high-performing people, through the creation of positions that leverage their highest skills and provide development and growth, ensuring meaningful work and a sense of purpose from the present into the future.

Researching trends can help us to anticipate business needs and identify opportunities to make a difference, to make meaningful contributions to the business. SHRM has Special Expertise Panels who have been developing an annual publication about future trends, the most recent being Future Insights: The Top Trends for 2014. This publication identifies organizational needs as well as trends in the business environment. Below are some examples. 

Business needs

  • Developing five generations of workers, providing them with the tools they need to be effective

  • Engaging and developing technical experts with high potential into senior leaders who contribute to the business value proposition and its competitive advantage

  • Developing and coaching line managers to become more proactive in managing and coaching talent

  • Building leaders' skills in communication, building employee motivation, and understanding and respecting cultural differences

  • Designing business organizational structures and managing change as business needs become increasingly complex and subject to change

  • Integrating career planning with workforce planning and employee engagement to enable employees to identify and choose career paths and job opportunities

  • Leveraging decision support tools, analytics, metrics and models to make big data more useful in managing and developing the workforce

  • Applying mobile and other advancing technologies to provide training and development on demand
  • Economic uncertainty

  • Continuing change due to new developments in technology

  • Skill-gaps and increasing needs for skilled talent

  • Emphasis on effective measures of performance

In addition, the SHRM expertise panel has developed a report on trends in HR disciplines, which can be used to develop or adjust your organization structure for future effectiveness. To review it, visit shrm.org and search under "2016 HR Disciplines Panel Trends."

There are several organizational structures that are typical in today's H.R. departments; some simple, others complex.

How can leaders determine which structure will most positively impact the business? How can H.R. employees and job candidates determine which structure will best enable them to achieve their career goals? Let's look at differences between some typical organizational charts.

Some popular H.R. organization structures in use today include the following structural characteristics:

  • Shared services supported by technology

  • Centers of expertise/excellence and embedded business partners

  • Generalists under the leadership of H.R. managers, directors and VPs

  • Corporate H.R. functions who push initiatives down and across through division HR teams

  • Matrix environments

  • Centralized decision making

  • Decentralized decision making

HR's organizational structure matters because it is the function's framework, aligning resources with priorities defined in the business strategy, and embodying the organization's culture. The structure directly impacts the company's ability to attract, engage and retain top HR talent. Subsequently, the work of HR, as performed by its staff, impacts business success in the future. Its impact is within and beyond the HR function itself.

Positions to consider in your HR department

Not all HR personnel will have the same strengths and weaknesses. If you have a medium to large-sized company, you'll need to fill at least a few different roles to adequately support your employees.

Here is a look at a few of the positions you should consider hiring for within your HR department.

  • HR manager:  Every strong department needs a manager and HR is no different. He or she will be the one to organize the department to field complaints and institute office policies to support a healthy work environment. Unless you're a small company with only one HR representative, you'll need someone in charge to keep things running smoothly.

  • Recruiter: A recruiter is vital to finding new talent. It's helpful if your recruiters have an HR background. The ability to understand the office culture and how different personalities interact is a great quality to have for someone in charge of hiring. Recruiters should, at very least, take direction from the HR department to find candidates that are not only qualified but will succeed in the workplace.

  • HR admin assistant. Depending on the size of your company, it may be a good idea to hire an administrative assistant specifically for HR. They will be able to organize complaints and keep a detailed record of events that transpire in the office that will be helpful if there is ever a dispute or a need to analyze the daily office activity.

  • Training manager: A training manager is important for getting the most out of new employees. You can always rely on more seasoned employees to provide training, but that distracts them from their own responsibilities. Having a dedicated hiring manager will give you a greater ability to integrate new talent into the workplace without disruption.
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