Survey: HR Structure Reflects Organizational Size

An organization’s size heavily influences how it structures its HR teams, including how it formulates major HR initiatives, according to recent findings from the Institute for Corporate Productivity (i4cp).

“There is no one-size-fits-all HR,” said Mark Vickers, vice president of research for i4cp, which conducted its first-ever HR Organization Structure Pulse Survey in April 2009 with 463 respondents.

“I don’t know if there ever was,” he added, but today “there’s just a lot more choices in how to set up HR than [there] used to be. I think a company should recognize that if it’s not working there are alternatives” to the current HR organizational structure.

The survey looked at organizations with fewer than 1,000 employees; 1,000- 9,999 employees, and 10,000 and more employees. Most respondents were managers and directors.

They were asked how their organization structured HR—as generalists covering all major HR functional areas; as HR functional areas with specialists working in coordination with HR partners or generalists; centers of excellence with specialized delivery teams working with managers in business units; or a combination of centers of excellence, shared services and HR generalists.

The findings somewhat confirm that companies with 10,000-plus employees favor centers of excellence (50 percent), followed by HR functional areas with specialists (35.6 percent).

“They’re not just relying on the HR generalist model at all,” Vickers said of the largest companies.

Other findings:

·The majority (68.4 percent) of organizations with fewer than 1,000 employees tend to use an HR generalist only to cover major HR function areas for the whole organization, business unit, region or the like.

·The majority (44.4 percent) of organizations with 1,000-9,999 employees use HR functional areas that contain specialists working in coordination with HR partners/generalists located in business units, regions or the like.

Asked what kind of HR team structure they had, the survey found that:

·Small, medium and large organizations strongly favored HR project teams for specific initiatives (40.8 percent, 61.1 percent, and 65.9 percent, respectively.)

·Organizations with 1,000-9,999 employees were slightly more likely to have HR work cross-functionally with other teams such as marketing and finance.

·Organizations with 1,000-9,999 workers and with 10,000 or more workers used cross-functional teams within HR.

·Overall, there was little use of cross-functional virtual teams in which HR plays a role.

“HR is very much a team-oriented position in companies these days. It’s not just some HR leader working with other executives,” Vickers said.

One of the requirements for HR professionals today, he added, “is to understand the other functions [in their organization] well so they can make good team-based decisions.”

It’s also another good argument, he pointed out, for HR professionals understanding their organization’s business.

When formulating major HR projects, one-third overall use multifunctional temporary team-based structures, the survey found. The idea of temporary teams has caught on, Vickers said. Unlike permanent teams that can “freeze up” staff, multifunctional temporary team-based structures allow organizations to be more nimble, he said.

Organizations with fewer than 1,000 employees more commonly use an HR functional leader to temporarily work with other executives, compared to larger organizations.

Nearly half of everyone surveyed report having a worldwide workforce of fewer than 1,000 employees. Overall, more than half favor a centralized global HR leadership team, but it’s a more popular approach to the smallest organizations (70.4 percent).

The biggest organizations—10,000 or more workers—have an HR leadership team that is decentralized by region, such as Europe or Asia.

And among organizations of all sizes, close to two-thirds overall said the head of HR reports directly to the CEO.

“HR is too important,” Vickers observed, “not to report to the chief.”

Kathy Gurchiek is associate editor for HR News. She can be reached at kathy.gurchiek@shrm.org.