7 HR Organization Structure Best Practices

What Are Best Practices When Creating An HR Organization Structure?


To help you create an HR organization structure, we asked CEOs and HR managers this question for their best pieces of advice. From creating an effective reporting process to increasing worker satisfaction, there are several best practices to follow when creating an HR organization structure for your business.


Here Are Seven HR Organization Structure Best Practices:


  • Create an Effective Reporting Process
  • Subdivide and Assign
  • Plan an HR Budget
  • Consider the Organization’s Size
  • Provide Employment Security
  • Outline Criteria for Promotions
  • Increase Worker Satisfaction


Create an Effective Reporting Process

The HR department plays the role of the central nervous system of the company, coordinating between various departments on important aspects of human resources and collecting—as well as providing—critical insights.

This is where an effective reporting process plays a crucial role, allowing the HR team, the top management, department heads, and other core personnel to learn all they can from these insights. This practice is not just helpful for the company, but extremely beneficial for employees too.

Riley Beam, Douglas R. Beam, P.A.


Subdivide and Assign

Whatever your HR organizational structure is, make sure there’s enough to go around. For example, employees can become very frustrated and disgruntled when they feel like they aren’t being heard by HR.

The people aspect is what can make or break a business, and you want to ensure that employee issues are being handled with the time and attention they deserve. Make sure your HR department has enough people, and subdivide the department into assignments so that you have specialists handling each team appropriately.

Trey Ferro, Spot Pet Insurance


Plan an HR Budget

When creating an HR structure, don’t forget to plan the department’s budget. Your goal is to adjust the HR budget to your business objectives and HR professionals’ needs. If you allocate too little, you will certainly fail to meet your HR goals. On the other hand, a budget that is too generous will freeze the resources that could be devoted to developing other areas. So take your time crafting a well-thought-out budget policy and the budget itself. 

The budget should cover resources spent on recruitment processes and employees’ salaries, projected turnover rate, training needs, or benefit program costs. Consider also money spending rules, restrictions, methods of accepting costs, or money limits. Having some budget policies will keep HR department expenses under control.

Nina Paczka, MyPerfectResume


Consider the Organization’s Size

Every company has a different HR organizational structure depending on its culture, leadership, geography, and more. However, the biggest determinant of a company’s HR organizational structure is its size. 

For example, companies use an HR to employee ratio to determine if more HR support is needed. The size determines whether the organizational structure will be functional, flat or matrix. Small- and mid-sized organizations often outsource payroll and other specialist HR roles, meaning the flat organizational structure will be ideal for them.

Further, small businesses have human resource information system (HRIS) roles that fall under the IT department, eliminating the need for such in their HR organizational charts.

Charles Ngechu, EasyPaydayLoan


Provide Employment Security

The most beneficial practice of an HR organization is to provide security to employees. HR enables employees to support themselves in essence. Employment security enables employees to go home after work and provide for their families. 

The security of a job is very crucial. Providing security to employees has numerous benefits because it helps them retain their people. Job security is the most important factor in global HR management. 

If employment security is threatened, it immediately ripples through the organization. It’s generally the organization that pays the price of the layoff process. HR professionals have worked hard in the selection, training, and development of employees. If the organization does not work on job security, they are more likely to leave and work for other competition.

Shivanshi Srivastava, PaydayLoansUK


Outline Criteria for Promotions

Most of the time, HR gives the outline of the organization’s structure and forgets about promotions. Yes, who does what at which position has been defined, and this is good and brings order to the way things are done. However, when it comes to promotions, employees are often left in the dark. Those at the same level will just wake up and realize that their colleague is a rank higher than them. This creates confusion in the organization as it is taken as a bias. 

To avoid this confusion, it is important for HR to indicate in the organizational structure what it takes for an employee to move from one level to the other. When that finally happens, it does not create conflicts among employees, since the format for that transition is clear to everyone.

Leah Wanjiku Gathoni, NearbyMovers


Increase Worker Satisfaction

The job of HR doesn’t end with securing the top talent. They must additionally make sure that employees are happy in their jobs and inspire a desire to show up for work each day, be successful and benefit the business. As a result, HR should make sure that workers are aware of their ability to advance and switch departments. If there are any dissatisfied employees, human resources will work with them to address the situation and try to find a solution.

Josh Tyler, Walk Big Media


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