Why do we work in the HR department

Human resources department: tasks and structure

A small step for the company, but a big one for the HR department: The hiring of the second HR employee. Suddenly you are “HR manager”, you have to professionalize your department, define structures and processes. This guide explains how you can do this step by step.

Build your team professionally with this workforce planning template.

At some point it will be there, the moment. You can finally no longer live up to your role as a personnel officer, recruiter and employee caretaker in one person. Even the management realizes that things cannot go on like this. The budget is approved and you are looking for an additional employee for the HR department.

As soon as the number of employees in HR increases to two or three, the following questions arise for you: How do you structure your new HR department? How do you design the processes? How do you support the further growth of your company through HR?

What is a human resources department?

The HR department is the department in the company that takes care of all HR issues and questions. She is the point of contact for all employees, executives and, if necessary, the works council and ensures that they are deployed and promoted in the company in the best possible way in order to ensure the company's success.

The term “HR department” is synonymous with the HR department, while the HR department is also known as HR Management, Human Resource Management (HRM) and Personnel Management.

What are the tasks of a human resources department?

The tasks of the HR department are distributed across all stages of the employee cycle: from recruiting to offboarding. In detail, this includes the following tasks:

Personnel planning or personnel requirement planning: When planning personnel requirements, you ensure that your company always has the right number of employees with the necessary qualifications to achieve the goals set.

You can find a free template for personnel requirements planning here.

Personnel recruitment or acquisition: Recruiting is also known under the terms Talent Acquisition, Recruiting and E-Recruiting. It describes all measures and methods to reach new employees through various channels and to win them over to the company. This also includes employer branding.

The workforce planning: With optimal personnel deployment planning, you ensure that your employees deploy as efficiently as possible in order to avoid personnel bottlenecks or overcapacity.

Personnel administration or personnel management: Personnel management describes all administrative and transactional tasks in HR. This also includes formalities that are necessary for the hiring and issuing of employees, e.g. B. Create contracts and create a digital personnel file.

Personnel development: In order to promote the strengths of the employees and to eliminate weaknesses, the HR department should establish good performance management and an open and constructive feedback culture.

Use this guide to develop a suitable performance management strategy.

The payroll: In addition, the HR department takes care of payroll and payroll accounting. This either happens completely internally or is partly outsourced and handled together with a software provider or tax advisor.

Employee loyalty: Employee loyalty encompasses all measures to retain employees and thus to bind them to the company in the long term. You can find many examples and best practices in this article.

Personnel controlling or people analytics: It is now part of every good HR department to make HR-related decisions based on data. With the help of personnel controlling and people analytics, you have various key figures at hand, for example to analyze your employee structure or fluctuation rate and to derive appropriate measures from the results.

Strategy: While the HR department has so far been primarily responsible for administrative issues such as payroll accounting, more and more companies are finally realizing how important it is to include HR strategically. The HR department has a decisive influence on the future viability of a company because it takes care of the company's most important asset: its employees.

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In this 5-part e-mail course, you will learn how you can sustainably increase the performance and success of your company in HR.

Why your HR department needs a structure

In start-ups or small companies there is a family atmosphere, a strong corporate culture, people know and appreciate each other. Everyone is highly motivated and feels personally responsible. The criterion by which new employees are hired is simple: Either he or she fits into the team and the chemistry is right, or not.

Download the questionnaire for the Cultural Fit here.

Above a certain size - somewhere between 50 and 100 employees - this personal character is lost. A second hierarchy level is necessary, you only know new colleagues by saying hello, everything becomes more anonymous. In this phase, many companies report noticeably falling employee satisfaction and increasing fluctuation. Mistakes in HR work that were previously insignificant suddenly have noticeable consequences.

Many topics that have arisen naturally and almost by themselves up to now are now the responsibility of HR. The HR department has to become more professional and actively take care of corporate culture and employee loyalty. She has to develop salary and working time models and be in control of the increasing bureaucracy.

If you now hire additional employees for HR and otherwise continue as before, you will quickly reach your limits. You can only master the challenges of a (rapidly) growing company with a structure for your HR department and standardized processes.

How big does your HR department have to be?

The well-known rule of thumb “1 job in HR per 100 employees” is not wrong, but it tends to apply to larger companies with a well-resourced HR department. In companies with up to 250 employees, the need is significantly higher, as the study “Workforce Analytics” shows: an average of 3.4 HR employees per 100 full-time positions in the company!

Source: Workforce Analytics: A Critical Evaluation: How Organizational Staff Size influences HR Metrics (SHRM, 2015)

 

Peter Rosen from HR Strategies and Solutions recommends creating the first full-time position in the HR department from around 50 employees and a second from around 150 employees. This recommendation is quite realistic, as experience shows.

 

You can replace one or the other employee in the HR department through automation and outsourcing. This is shown by practical examples such as the Berlin heating manufacturer Thermondo. On the other hand, companies that constantly need highly qualified specialists may decide early on to employ their own recruiter.

Rather than relying on a metric, determine your own HR staffing needs. In the following parts of this article, you will learn how to proceed and at the same time define a structure for your HR department.

How do you define a suitable structure for yourself?

When structuring your future HR department, proceed as you would with any other project: you set goals that you want to achieve and then think about the necessary steps to achieve them.

In this article, you will learn how to align your HR goals with your company goals in five steps.

Identify your critical issues

List all the tasks that you need to take care of in the future. Assign priorities to the tasks. Identify the critical issues that pose particular challenges and could prove to be the bottleneck for further business growth.

Examples are:

By identifying such key issues, you are already laying the foundation for a future HR structure. You may need an employee who explicitly takes care of these areas. More on that later.

Don't forget about important topics. Put employer branding and onboarding programs on your list as well as payroll, contracting, and healthcare. For each point you list the individual tasks that need to be completed and estimate the resources required.

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Do it yourself or outsource?

What tasks do you want and can you take on in-house with your own HR staff? That's the next decision you should make. The criteria for this are the resources that are required for each task, the complexity and the existing know-how in your company.

Operational topics such as payroll tend to be more suitable for outsourcing. Despite ever better software, such topics can be very complex. Flexible working time models, for example, entail a long tail of questions relating to social security law and administrative tasks. Collective and legal regulations are constantly changing. Without outside help, a small HR department will find it very difficult.

On the other hand, you can hire personnel consultancies to support you with more strategic issues. Some offer concepts for employee loyalty or performance evaluation or continuously measure employee satisfaction.

External headhunters or recruiters have long been part of the standard repertoire of outsourcing. They help to find employees in difficult markets or to recruit large numbers of staff in a short period of time.

For each task on your list, decide on “make or buy”. Now you have an overview of how many and which resources you need internally in your HR department. You group tasks into task areas, such as personnel administration, training, recruiting, personnel marketing, and get a rough idea of ​​the structure of your future HR.

Define your processes

Now is what is probably the most arduous step. If you skip it or do it half-heartedly, the efficiency of your HR will decrease as your company grows. In small companies, the HR department works on demand and with informal processes - “that's how we do it”. Now you have to define fixed processes in order to be able to cope with the extra work.

Document all HR processes, distribute responsibilities and areas of responsibility. Describe how the cooperation with external service providers should look like, for example within the framework of service level agreements. Work out a plan with the management for the personnel requirements and thus for your recruiting.

Determine which recruiting channels you want to use. Create job descriptions, requirement profiles and training programs together with the specialist departments. Work out standard contracts and other regulations - keyword compliance.

Download a template for requirement profiles here.

Continue to orientate yourself on your priorities during this phase. Start with the crucial areas and work out the others later.

Implement HR software

Invest in software early on, for example in a comprehensive personnel management solution. Ideally, you start the selection process for a software parallel to the definition of your processes. Whether and which software you use determines how your processes will look. You can automate many tasks right from the start. Cooperation with the payroll office and other external service providers is significantly simplified via data interfaces.

Do not postpone the introduction of new software. If you first introduce manual processes and only switch to software later, you will have to change your workflow twice. That is superfluous and costs.

With software-supported processes, you can easily save half or a whole position in personnel administration. Or you can assign an employee to other tasks instead.

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What are the organizational structures for HR departments?

There are different ways to structure your HR department. These include both classic models and modern approaches. Which one you choose depends entirely on your goals and your corporate culture. We present six of them to you here.

1. The hierarchical model

For example, a personnel department can be organized hierarchically. The HR department here consists of a HR manager who reports to the managing director and is at the top of the hierarchy. He is given departmental goals that he and his team have to achieve.

The HR department can then consist, for example, of two managers for the areas of recruiting / personnel procurement and HR management / personnel administration, who in turn lead their own teams and report to the HR manager.

In this model, communication is completely vertical; H. top down. Information is released from upper management and is then passed on to the executives via HR management and ultimately reaches the team.

In this model, the clear distribution of authorities is particularly advantageous. Everyone knows where they are in the model, where they want to work and what their development plan looks like.

2. The formal and informal model

You can set up the HR department formally or informally. The hierarchical organization is a good example of the formal model because it is based on clear hierarchies, goals and tasks.

The informal model, on the other hand, is more open, because team members can interact with one another more flexibly and depending on their dynamics.

In many companies, both models exist side by side. Then, for example, the formal model is the standard structure of the HR department and, depending on the project or goal, there is an informal collaboration that breaks up the formal model for a specific phase.

3. The goal-oriented model

In the goal-oriented model, corporate goals are broken down to individual departments - and even down to the individual employee. Each team decides for itself which measures are implemented to achieve the goals.

The corporate goals are determined between the managing director and management and require the commitment and dedication of each individual. Because this model only works if each employee is clear about their goals and how they will be measured against them. This model is usually accompanied by a financial bonus depending on the achievement of goals.

This model is only partially used in many companies, e.g. B. in sales. For HR departments, the goal-oriented model has the following advantages: commitment and focus from each individual employee, higher team performance and compliant planning of goals.

4. The shamrock model

This model is based on the image of the “clover leaf”, as it consists of three basic pillars that together form a whole.

  • At the core are the most qualified and relevant employees.
  • Less important activities are carried out by external service providers and are therefore outsourced.
  • Employees with temporary contracts, e.g. B. project-based work, complement the shamrock.

For the HR department, this means that there is a small group of permanent employees who in turn manage external staff on special projects. External service providers could provide support on issues such as relocation and employees with temporary contracts, e.g. B. additional recruiters can help to hire more new employees in less time.

5. Networking and outsourcing

This model is completely shaped by the fact that HR departments get help from outside. There is only a small group of permanent HR employees who outsource many of the upcoming tasks and activities to external service providers and thus achieve their goals.

Get the right colleagues on board

Place targeted job advertisements, automatically obtain internal feedback and make even better personnel decisions.

How can small HR departments be structured?

As you can see, the “right” structure for your HR results from your own situation and planning in the company. Nevertheless, there are recommended approaches. With two, three or four employees, the number of options is limited - after all, an HR structure should not be imaginative, but efficient.

Here are more examples of how you can structure your HR department.

You hire an assistant to help you, take care of paperwork, administration and routine activities. This will make you up to 50% more productive and allow you to concentrate more on important and strategic areas, such as employer branding, recruiting and employee loyalty.

The advantages of this option are that you are already familiar with the important tasks and that the transition will be easier. The costs for an assistant position are lower than if you hire a specialist.

In the future, you will take care of the internal issues of the staff: administration, further training, employee loyalty and so on. An additional recruiter is responsible for finding new employees. The recruiter can possibly take on other topics such as employer branding or onboarding.

This structure is suitable for companies that want to grow quickly and need a lot of new employees. It requires a clear separation of duties, since both you and the recruiter work independently, even if the recruiter reports to you.

Further growth: think in terms of roles

From the third HR employee onwards, how you structure the HR department is entirely up to you. You could hire a recruiter if you already have an assistant, and vice versa.

If you can't find new employees quickly enough, you may want to hire a second recruiter instead. It all depends on your priorities as to where the key areas are to meet your growth goals.

Don't just hire "any" new employee when the workload gets too heavy. Think in terms of roles. This article lists seven roles you need in HR.

Ask yourself: Which topic is currently being neglected and will require more attention in the future? What kind of employees, what know-how and what soft skills are required for this? What role does the new HR employee have to take on and how does this role fit into the current HR structure?

Instead of expanding your HR department, you could automate or outsource other processes. This gives existing employees more freedom and can take on new topics - new roles.

Make all decisions based on your previously defined goals and your timetable, which you regularly review and adjust. So you can be sure that you will find the best possible HR structure for yourself and thus pave the way for the further growth of your company.

Represent your HR department with an organization chart

Organizational charts for the HR department (and the whole company) help to keep an overview of the tasks and areas of responsibility of individual colleagues. This is especially important in a (rapidly) growing team, because it shows the structure of the HR department, to whom the employees report and to whom colleagues can turn if they have questions about feedback discussions or administrative matters, for example.