The human resources – HR – department performs one of the more important functions in any company, whatever its model or size may be. Big or small, a whole HR team or just a single HR employee, its role is essentially the same – concentrating on the employees of the company, including their training, hiring and firing them, if necessary. In other words, an HR department manages human resources.

Additionally, HR tries to maximize return on investment in terms of lessening the expenses employees produce, mostly through communication and empathy, and by focusing on issues such as employee motivation.

To do this job correctly, the HR department requires a certain structure that can cope with the business demands, whatever those may be.

A modern HR model

Organizational capabilities of HR departments are a relatively new phenomenon. The modern HR model was created in 1997 and was created to meet the needs of both the company and the people inside it. It consists of four basic roles or functions. Two of them concentrate on daily operations and strategies for the future, while the other two focus on people and processes.

The first role focuses on people and strategies concerning them. A change agent fulfills this role as they manage talents and performance, staff, design organizational structure, survey action planning and train new employees.

Next is the process and operational focus function in the form of an administrative expert. Their job includes taking care of compensations, HR information systems, benefits, and compliance.

The third is the people and operational focus role in the form of an employee relationships expert. They’re accountable for employee and labor relations, diversity, EEO and worker’s safety, and compensation.

The last one is the function of process and strategic focus. A strategic partner deals with this part of HR through strategic HR planning, developing HR as a business partner and taking care of the company’s culture and image.

The fall of the 1:100 rule

For decades, the standard for the number of internal HR employees was one HR employee for every one hundred full-time employees. But for today’s standards, this number may be inefficient and changes according to the size of the company. Smaller organizations tend to have a bigger number of HR employees with the average ranging from 3.4 to 1.

As full-time employee number increases, the need for HR staff decreases as large companies usually have more HR staff than small ones. They increase the HR department only when required. For example, when they face complicated compliance issues or have multiple remote branches and locations.

This is why small companies often don’t have an HR team. Plus, numerous options offer HR departments the ability to complete more tasks with fewer people and resources. For instance, an HR department can use payroll cards as an easier and more convenient system of payment that lowers the amount of administrative work required.

We suggest hiring the first HR employee that is an HR generalist at the 50th worker mark, but the second at the 150th mark. The rate of growth will determine whether you need more processes and infrastructure.

Matrix model

When you run a company where employees report through more than one channel of communication, or to more than one supervisor, the matrix model represents the most efficient way to run an HR department.

Use it in cases that call for daily cooperation between mid-level management and employees from different departments. As it enables numerous team members to work on their own growth and progress while working on distinct objectives from different managers, every member of the organization receives more autonomy.  

But it does come with its own set of challenges. Although it enables transparency for big and operational intensive companies, it requires a dedicated team to manage it and keep everything working properly.

Benefits of the matrix model can be seen in better coordination of resources, development of specialists, increased quality of communications and an overall more flexible HR department.

The bigger the company and its operational complexity are, the bigger the HR department should be, and with a more complex model design. It is crucial that the design of an HR department matches different dimensions of a company. When dealing with numerous services, products, and consumer lines there must a proper HR department set in place to support them. In the end, an HR department may be viewed as an internal consulting organization that can have a profound impact on the success of a company.