Company Growing? How to Plan Your HR Department Structure

Nowadays, thanks to the development of virtually all aspects of business, starting your own company is easier than ever. It is not difficult to understand, then, why small businesses represent a considerable force on today’s market. In fact, according to statistics, small businesses already accounted for one-third of US exports in 2015, and as much as 88% of employer businesses in the US have fewer than 20 employees. Everyone starts out somewhere, however, if you also want to get somewhere, you have to be prepared for business growth. A sound business model includes a plan for these situations, but oftentimes, HR still proves to be a problem for many. However, the HR department is a vital part of your business that is responsible for a wide array of tasks. So, here are some tips on how to plan your HR department structure when your company hits off.

Know your numbers

In the past, the general rule of thumb used to be hiring one HR person for every 100 employees. However, the fact of the matter is that this is an outdated tactic and you need a designated HR person well before you hit the 100 marks. It is generally recommended that you hire your first HR person at 50 employees, and increase this number to two somewhere past the100 mark when it becomes difficult for one person to handle the workload – generally, it’s fine at 150 but you might need it a little earlier than that. Considering these numbers, it is clear that even if you have a fair amount of employees, the HR department still remains relatively small, which means that you have to choose who you will hire very carefully.

Your options

To make sure you don’t overhire, you should follow a certain order when it comes to HR. First of all, before the time even comes for hiring, your most valuable HR asset will be software that will help you automate and streamline processes such as payroll. This, combined with outsourcing is the most efficient way to manage HR while the company is still in its beginning phases, as the HR firm you turn to has all the necessary expertise you might need. An alternative to this is hiring an HR assistant who will help out with administrative tasks while you yourself become the HR director.

When you pass 50 employees, it is time to hire your first full-time HR employee. While there are several HR positions all dealing with different tasks, considering the fact that this one person you hire will need to take care of all the responsibilities at first, your best bet is going for a director of human resources or a human resources manager, as both of these positions involve understanding and tackling all the rest.

Another option for your first hire is finding a full-time recruiter. If your company is growing at a fast pace, staffing is a burning issue and to tackle it in the most efficient way, you need a specialist in recruiting. This way, you get one of the most time-consuming tasks out of the way and can deal with the rest yourself or with the help of outsourcing.

Which path would make the most sense depends largely on your individual case. Thankfully, nowadays if you need advice on which direction you should take, you can find professionals almost everywhere, so turning to HR consulting in Sydney, for example, is a great idea no matter where in your HR organization you got stuck or what responsibilities you want to outsource.

Larger models

When your needs surpass the previously described models, it’s time to develop your HR structure further. For instance, for a three-person structure, an HR manager, an HR assistant and a recruiter can create an efficient environment. However, sooner or later, you are going to need more people on board and in this case, hiring HR personnel according to special functions is paramount to avoid the clashing of efforts and so on. Usually, an HR department is divided into six distinct positions, out of which the managers/directors and the recruitment specialists have already been mentioned (the managers/directors standing on top of the HR hierarchy). Your HR expansion will mean the introduction of a compensations and benefits department, compliance and health and safety department, a training and development department and an employee relations department at the very least. Therefore, being very precise in your job descriptions is a must.

Of course, it’s a reason for celebration when a company starts experiencing rapid growth, but without being prepared for new needs, many problems can arise, leading to hasty decisions that will later backfire. The HR department is an essential part of your company, so make sure you inform yourself about how you should organize this department.

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