The human resources (HR) department is the backbone of any organization, ensuring that employees are supported, policies are upheld, and the workforce operates smoothly. A well-defined HR organizational structure is essential for achieving these goals. By clearly delineating roles, responsibilities, and reporting relationships, companies can create a streamlined and effective HR team.
Whether you’re designing a new HR org chart or refining an existing HR department structure, understanding the various components and hierarchy is key. In this guide, we’ll explore common HR organizational structures, provide sample HR organizational structure examples, and discuss how to optimize your HR hierarchy for maximum impact.
What Is Organizational Structure?
Organizational structure refers to the system companies use to organize their workforce, outline reporting relationships, and define how employees fit into the broader organizational framework. In essence, it is a blueprint that shows how roles, responsibilities, and power are distributed across a business. For Human Resources (HR), the structure varies depending on factors like the size of the company, its culture, and its specific needs. The structure adopted by the HR department typically mirrors the broader organizational structure while addressing the unique requirements of managing people and resources effectively.
Before diving into the specifics of HR organizational structures, it’s helpful to understand the most common organizational structure types used by businesses today.
Common Organizational Structure Types
While there are many variations of organizational structures, three common types stand out in most modern organizations. These models help businesses define roles, streamline communication, and ensure efficient management.
1. Functional Organizational Structure
The functional structure is one of the most traditional and widely adopted in both large and small organizations. In this model, the organization is divided into distinct departments, each focusing on a specific function. For HR, this could include specialized areas such as recruiting, benefits, compensation, employee relations, training and development, and payroll. Each department is managed by a specialist or department head who ensures that specific functions are efficiently executed. This approach helps establish clear lines of responsibility and accountability across different HR functions, making it ideal for larger organizations with complex HR needs.
2. Flat Organizational Structure
In contrast to the functional structure, the flat organizational structure has few or no levels of middle management. The hierarchy is significantly reduced, meaning employees and managers are all on a relatively equal playing field. In this model, a senior HR leader, like a VP of HR, might directly oversee a small team of HR specialists, each responsible for different areas such as recruitment, benefits, or employee relations. Since the organizational layers are minimized, there is less red tape and more open communication, fostering a collaborative environment. This structure is especially common in startups and small businesses, where quick decision-making and flexibility are crucial.
3. Matrix Organizational Structure
The matrix structure is a more flexible approach, where employees report to multiple managers depending on the project or function. Rather than a traditional hierarchy, employees work in cross-functional teams and may have both a functional manager (e.g., a recruiting manager) and a project manager. In HR, this might mean that a field HR leader manages a team of HR professionals who support different projects or regional operations. This type of structure promotes collaboration and adaptability, making it particularly effective in environments that require cross-departmental coordination, like retail or global businesses.
Other Organizational Structures
Though the above models are the most common, there are other organizational structures that businesses might consider depending on their size, industry, and goals. Some of these less conventional structures include:
Divisional Organizational Structure
This structure is often used by large enterprises that operate in multiple markets or geographical regions. The company is divided into smaller, semi-autonomous divisions, each focused on a specific product line, service, or geographic area. Each division typically has its own HR team to manage its unique needs.
Network Organizational Structure
In this model, multiple independent organizations form a network to collaborate and share resources for mutual business purposes. For HR, this could mean partnering with third-party service providers or vendors to handle recruitment, payroll, or benefits management, creating a more agile and scalable system.
Team-Based Organizational Structure
As the name suggests, this structure focuses on collaboration between teams. Employees are grouped into small, self-managed teams that work toward shared goals, typically under the guidance of a team leader or supervisor. HR teams using this structure might work together on projects like employee engagement, recruitment, or leadership development, with each member contributing their expertise to achieve common objectives.
What Is a Human Resources Organization Chart?
A human resources (HR) organization chart is a visual representation of the HR department’s structure. Often called an HR org chart, it illustrates the hierarchy, roles, responsibilities, and relationships within the team. This chart typically includes employee names, their specific duties, and the reporting lines that connect them. While commonly used across entire organizations, HR-specific charts provide a focused view of the department’s internal structure.
The primary purpose of an HR organization chart is to give both the HR team and the broader organization a clear understanding of how the department is organized. It highlights reporting relationships, shows who is responsible for different HR functions, and clarifies accountability for specific tasks.
This tool benefits leaders by offering insights into whether strategies are on track and objectives are being achieved. It also helps employees understand their roles within the department and their contributions toward overall goals. Additionally, an HR org chart can identify open roles or structural gaps, serving as a guide for future growth and improvement.
Using a sample HR organizational chart as a starting point, businesses can create tailored charts that serve as a framework for scaling the department effectively.
Human Resources Organization Structure Examples
The design of your HR organization chart will vary based on the size and structure of your business. It’s crucial to consider the HR to employee ratio, as this can influence how the department is structured and how services are delivered. A high HR-to-employee ratio may signal inefficiency, but this figure is impacted by several factors, such as technology use, the scope of HR functions, budget constraints, industry standards, company size, and union presence.
For example, in small businesses or startups, there may be a single person handling all HR responsibilities, while in larger companies, HR professionals often focus on specialized areas like recruitment or payroll. Understanding these differences helps HR leaders tailor their structure for maximum efficiency.
HR Organizational Structure: Small Business
Number of employees: 100 or fewer
In smaller organizations, the HR structure is typically much simpler, with one or two people handling all HR-related tasks. The HR department may not have the capacity to hire specialists for every function, so general HR responsibilities are often divided among a few roles.
Key Roles:
- CEO/HR Director: The top of the chart, typically overseeing the entire HR function or directly managing HR operations.
- HR Manager/HR Generalist: Manages HR operations and may handle everything from recruitment to employee relations.
- HR Specialist/Recruiting Coordinator: Handles specialized tasks such as recruitment and staffing needs. Payroll and other administrative functions might be outsourced.
HR Organizational Structure: Mid-Sized Business
Number of employees: 100 to 999
As businesses grow, the HR department usually evolves into a more structured team with specialized roles to handle specific functions. Mid-sized companies typically have more layers in the hierarchy, reflecting the need for clear role distinctions and greater HR focus on certain tasks.
Key Roles:
- VP of HR/HR Director: Leads the department, making strategic HR decisions and overseeing the overall direction of the team.
- HR Managers: Responsible for specific HR functions like employee relations, recruitment, and performance management.
- Compensation and Benefits Manager: Oversees employee compensation programs, benefits, and payroll.
- Recruiting Director: Manages recruitment strategies and leads recruiting coordinators who handle hiring.
HR Organizational Structure: Large Business
Number of employees: 1,000+
In large organizations, the HR department becomes highly specialized, with individual team members focusing on specific functions. This allows HR to handle the complexities of a larger workforce, such as diverse training needs and compliance across various regions.
Key Roles:
- Chief Human Resources Officer (CHRO): At the top of the HR hierarchy, responsible for leading the HR strategy at an executive level.
- Chief Diversity Officer: Focuses on diversity and inclusion strategies, ensuring that the workplace is inclusive.
- HR Business Partner (HRBP): Works closely with business units to align HR strategy with business goals.
- HRIS Specialist: Manages the human resource information system (HRIS) and data analytics.
- Training and L&D Director: Oversees employee learning and development, ensuring that the workforce is constantly improving its skills.
The HR organizational structure will depend on the complexity of the business. While small businesses benefit from a streamlined approach, larger organizations need specialized roles to address the unique challenges of a growing workforce. By customizing the structure to your company’s needs, you can ensure that HR functions operate effectively and support overall business objectives.
How Many People Should Work in the HR Department?
The size of your HR department depends heavily on your organization’s size, commitment to its culture, and geographical spread. A key metric for determining HR needs is the HR to employee ratio, which helps assess whether the current HR team is sufficient to support the company’s workforce. This ratio is a simple calculation: number of employees divided by the number of HR team members.
The ideal HR to employee ratio can vary by industry, company size, and even the local labor market. However, for many businesses, it’s important to have a sufficient number of HR professionals to effectively manage the workforce and support company growth. For instance, based on US employment trends, HR teams need to scale appropriately as the organization grows.
According to a 2017 Bloomberg BNA study, the median HR to employee ratio was 1.4 HR staff per 100 employees. This ratio has risen in recent years due to factors such as the increased demand for talent, regulatory changes (like the ACA and overtime rules), and the growing need for HR to manage more complex issues.
How to Calculate the HR to Staff Ratio
To determine your own HR to employee ratio, you can use the following formula:
HR to Staff Ratio = Number of Employees ÷ Number of HR Team Members
This ratio offers a useful insight into how well your HR department is staffed to meet the demands of the organization. During times of economic downturn, many companies have had to reduce their HR teams, which can affect HR’s ability to support employees effectively. However, the HR department often functions as internal customer support, much like how a call center serves external customers.
Understanding this ratio is especially critical as HR departments play an increasingly strategic role in supporting business goals. It helps organizations assess whether additional HR personnel are needed to enhance services like recruitment, compliance, training, and employee engagement.
HR Staffing by Company Size
While businesses are often categorized as small, mid-sized, or large based on revenue, for HR purposes, it’s typically measured by the number of employees:
– Small Businesses: Fewer than 100 employees
– Mid-Sized Enterprises: 100 to 999 employees
– Large Organizations: More than 1,000 employees
To Sum it Up
In summary, an organizational structure defines how a company arranges its workforce, including the roles, responsibilities, and reporting relationships within the business. For the HR department, the structure depends on the size of the company and its unique needs. Common structures include functional, flat, and matrix models, each offering distinct benefits in terms of specialization, flexibility, and collaboration. Businesses may also adopt less traditional structures, such as divisional or team-based models, based on their specific goals. The key is to align the HR structure with the company’s objectives to promote efficiency, communication, and organizational success.
