Small business owners wear many hats. One of them is often managing your company’s HR responsibilities. An OnPay study found that over 40% of small business owners admitted to managing HR themselves. While this might be doable for some small businesses, it will likely become too cumbersome as you grow. Workforce planning, job evaluation, recruiting, compensation, benefits administration, employee engagement, performance management, safety and compliance are just a few of the many areas of essential interest for HR.
Since HR is responsible for so many functions in your organization, you may need one or more employees to manage them. There are many ways to structure the hierarchy of these workers. Find out why it’s important for your company to find the right HR organizational structure.
What is an organizational structure?
An organizational structure is the framework of a company or a department. It sets out and defines priorities through positions with generalist and/or specialist roles, indicating who reports to whom and how each fits into the overall vision. It also establishes decision-making as centralized or decentralized.
An effective organizational structure can lay the foundation for positive business impacts. It is embedded in the culture of the company and is designed to attract and retain high performers through the creation of positions that leverage their highest skills and promote development and growth. This ensures meaningful work and a sense of purpose that extends into the future.
What is the role of HR in the organizational structure?
Your HR team is responsible for helping to maintain an effective organizational structure by hiring the right employees for each vacant position, fostering an environment for growth, and guiding employees through their life cycle within your company. To best help your company sustain its organizational structure, your HR team should have its own organizational structure.
The HR organizational structure is important because it provides the framework to align resources with the priorities defined in your business strategy and to embody the culture of the organization. Structure has a direct impact on the company’s ability to attract, engage and retain top HR talent. Subsequently, the work performed by the HR staff will impact the success of the business in the future. Its effects go beyond the HR function itself.
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Here are some common business functions your HR staff can perform while maintaining an organizational structure:
- Develop multiple generations of workers and equip them with the tools they need to be effective. [Read related article: How to Manage Millennials vs. Gen Z in the Workplace]
- Engage high-potential technical experts and develop them into senior leaders who contribute to the company’s value proposition and competitive advantage.
- Develop line managers to become more proactive in talent management and coaching.
- Improve the communication skills of leaders, motivate employees and respect cultural differences.
- Design corporate organizational structures and manage change as business needs become increasingly complex.
- Integrate career planning with workforce planning and employee engagement so that employees can identify career paths and employment opportunities within the organization.
- Leverage business intelligence tools, analytics, metrics, and models to make big data more useful in workforce management.
- Application of new mobile and other technologies to provide on-demand training and development.
Types of HR organizational structures
Several organizational structures are typical of today’s HR departments; some are simple, others are complex. How can leaders determine which structure will have the most positive impact on the business? How can HR employees and job candidates determine which structure will best enable them to achieve their career goals? The best type of HR organizational structure for your business will depend on your specific needs.
At the basic level, you need to decide what kind of HR staff you need. For example, one company may only need to hire one HR professional, while another company may need to expand to a full HR department. Either way, your HR organizational structure should take into account every HR member you hire. Let’s take a look at the differences between some typical flowcharts.
Some popular HR organizational structures have the following structural characteristics:
- Shared services supported by technology
- Centers of Expertise/Excellence and Integrated Business Partners
- Generalists under the direction of HR managers, directors and vice-presidents
- Corporate HR functions that drive initiatives down and across each division’s HR team
- Matrix environments
- Centralized decision making
- Decentralized decision making
Positions to consider in your HR department
Not all HR staff will have the same strengths and weaknesses. If you have a medium or large business, you will need to fill at least a few different roles to adequately support your employees.
Here are some of the positions you should consider recruiting for within your HR department:
- Human resources manager: Every strong department needs a manager, and HR is no different. They will organize the department to handle complaints and institute office policies that promote a healthy work environment. Unless you are a small business with a single HR representative, you will need a manager to keep things running smoothly.
- Recruiter: A recruiter is essential for finding new talent. It helps if your recruiters have a background in HR. The ability to understand the culture of the office and how different personalities interact is an excellent quality for a person in charge of recruitment. Recruiters must follow the instructions of the human resources department to find candidates who are not only qualified, but who will succeed in the workplace.
- HR administrative assistant: Depending on the size of your business, it may make sense to hire an administrative assistant specifically for HR. They will be able to organize complaints and keep a detailed record of events that occur in the office. This will be useful in case of litigation or need to analyze the daily activity of the office.
- Training manager: A training manager is key to getting the most out of new hires. You can always count on more experienced employees to provide the training, but this distracts them from their own responsibilities. A dedicated hiring manager will give you a greater ability to bring new talent into the workplace without disruption.
No matter how many HR professionals you have on your team, chances are you also need some form of HR software to help automate your HR processes and keep all your HR documents on file. one streamlined platform. There are several highly rated HR software solutions available, depending on the features you need. For example, Paychex is a great option for remote teams, while Rippling is ideal for those who want a simple implementation process. For more, check out our full Paychex review and our Rippling review.