HR Department Structure: Roles, Functions, and 4 Common Structures

A human resources department with clear expectations and processes is going to find it easier to be effective and accomplish its goals than one where nobody’s totally sure who’s responsible for what and are hazy on the company’s best practices. That’s where HR department structure comes in handy!

An HR department structure shows everyone how all of the different HR functions and roles fit together. A defined setup determines, for example, if one person makes decisions or if decision-making is spread out among multiple people. It also helps the HR department prioritize work and ensure everyone is doing their part.

But what structure should your organization use? There are a few different ways to set up your HR department depending on the roles, functions, and how you delegate work. Here are the most common ways an HR department is set up to maximize functionality.

The Ultimate Guide to Human Resources: 6 Essential Steps to Building a Strong HR Department

HR Roles

Let’s start with the main roles within an HR department as these are the building blocks of a department structure. 

The person who oversees the entire department can help ensure that all HR activities are properly aligned with the company’s goals and objectives. This includes any number of initiatives, including recruiting, developing, and retaining top talent, providing guidance on labor compliance, and ensuring everyone in the company is treated fairly and professionally (more on these responsibilities in the HR Functions section).

Depending on the size and complexity of the organization, the Head of HR may hold one of these titles or a similar variation of them:

• Vice President (VP) of HR
• VP of People
• Chief People Officer (CPO)
• Director of Human Resources

Employees who report to this head of HR play an important role in the success and growth of an organization. These employees, such as HR managers, HR generalists, benefits specialists, and recruiters, are responsible for carrying out various functions related to human resources management. 

They also provide advice on organizational policies that ensure fairness in all aspects of their operations. In essence, these employees help maintain an environment where people can thrive both professionally and personally while helping organizations reach their goals.

HR Functions 

The HR department is responsible for overseeing a company’s workforce and helping them reach their full potential. Regular HR functions for most organizations include:

• Recruitment: Including talent acquisition/talent management, managing and updating job descriptions, and posting open roles.
• Employee relations: Maintaining a relationship between each employee and the organization. 
• Training and development: Creating training courses, inviting employees to attend trainings, and working with employees on their career development. 
• Employee health and safety: Providing a safe working environment for employees and implementing safety protocols.
• Compensation and benefits administration: Including health insurance, payroll, PTO, and labor relations (if applicable).
• Performance management: Implementing and maintaining a performance management system and overseeing performance reviews
• Company culture: Creating a positive and inclusive environment that encourages employee engagement, productivity, and retention. 
• Employee wellbeing: Providing support, resources, and guidance to ensure employees are healthy, both mentally and physically. 

HR is also at least partially responsible for onboarding new employees. Some HR departments may be responsible for monitoring, tracking, and improving employee metrics like employee performance, retention, satisfaction, and engagement.

In short, HR departments provide essential services to organizations so they can maximize their potential while creating an environment where people can thrive both professionally and personally. 

Four Common HR Department Structures

There are four common organizational structures that can easily be translated into an HR department. Each of these setups varies in who reports to whom and how tasks are delegated. 

1. Hierarchical structure

A hierarchical structure is when the chain of command starts with the Head of HR and then extends to senior managers and then general employees. All HR decisions are made at the top level. Then tasks are delegated as needed to other HR staff members who carry out those responsibilities. 

For example, the Head of HR is the one to make decisions about which benefits employees can access. Then the Head of HR delegates tasks like managing and monitoring employee benefits to an HR Manager or a Benefits Specialist, who then delegates tasks to the HR Administrator or a similar role so they can input data or process information. 

The hierarchical model is generally efficient when it comes to time management, as decisions are made quickly by only a few people. It also is good for large companies that employ a number of different HR professionals across many roles. However, the main drawback to this setup is that it doesn’t take into consideration input from people outside of senior management. 

2. Functional structure

The functional structure focuses on staffing roles according to specific functions within an organization or specific department, like HR. Each function acts as its own department or unit, with a manager or supervisor responsible for that specific function. 

For example, some companies have a Director of Recruitment, a Director of Benefits, and a Director of Learning & Development. Then each of these directors has a dedicated team that works on that specific function. 

The advantage of this arrangement is its emphasis on specialization — each person or team has full responsibility for its respective functions. However, since each unit works independently with minimal interaction among other units, it can create a silo effect. This structure may result in duplication of efforts or lack of coordination between different areas because of ineffective communication. 

3. Flat structure

The flat structure is also known as the “lean” structure because it eliminates layers of bureaucracy and emphasizes collaboration across departments rather than hierarchy. Generally, there is only one person – the Head of HR – to whom everyone else in the HR department reports. 

In such an arrangement, there are fewer levels between top management and frontline workers resulting in faster decision-making processes. This might also allow employees more freedom to take initiative with less oversight from their supervisors. 

In a flat HR setup, employees also tend to feel more included in decision-making, which can lead to increased employee engagement overall. It gives employees who aren’t senior managers more freedom to take initiative and be creative in their tasks. This works especially well for smaller companies that don’t have large HR departments. 

However, this flexibility also means there are fewer safeguards against poor decision-making or abuse of power if there are not checks on individual decision-making capacities.

4. Divisional structure

The divisional structure is often used when there are many different divisions within an organization. For example, your company may be divided into location-based regions, or maybe you have different product divisions. 

Under this structure, there is one person in the company who is the Head of HR and then several divisional HR managers who report to the Head of HR. Each divisional HR manager may have their own staff of HR folks who work for them and report to them. 

Delegating a separate HR manager for each division gives each division’s HR department more autonomy. It allows for more tailored solutions to meet the unique needs of employees who work in each division. On the flip side, this can create more silos in the HR department, especially between team members in different divisions. 

Structure Yourself For Success

Each HR department structure has its unique characteristics as well as pros and cons. Ultimately, no single model will work best for every business — what works best depends heavily on your organization’s goals, the number of employees in your HR department, and the functions you need to cover within HR.

The structure you implement should reflect a company culture of employee wellbeing, where no one employee has to work the jobs of multiple people, and everyone feels supported in their role. 

This type of environment can also serve as the foundation for creating successful wellness programs within the workplace. You can provide employees with access to resources they need to maintain healthy lifestyles while supporting organizational performance. Investing in these types of initiatives not only benefits individual employees but could ultimately help drive long-term success for your business.

If you need help getting a wellness program off the ground, reach out to a Wellbeing Specialist today to hear how we can help. It’s what we do!

References