December 11, 2019
Performance Management 05 July 2018
How to Structure an HR Team to Maximize Human Capital ROI
Jack White

The Human Resource department is perhaps the most integral part of growing a company from the ground up. HR managers have the responsibility of handling labor relations, which include interviewing potential members of the team and getting people in various other roles on board. As such, they play a crucial role in ensuring perpetual continuity and maximizing productivity within the workplace.

For this to be done, however, members of the HR team have to be able to assess the individual needs of every employee and how they relate to each other. This should be done in such a way that, for instance, should any team member fall ill or be unable to play their part, it doesn’t adversely affect the operation of the business. 

Oftentimes, this may mean extra training for one or more of the members, should any of them need to take on additional roles for the greater good, albeit temporarily.

For this kind of efficiency to be achieved, the HR team has to fulfill its function adequately. This can only be accomplished if it is structured so it can cope with all the needs of the business whenever they arrive. In other words, a key part of any HR team in human relations is maximizing on human capital.

Human capital and HR’s role in maximizing it

Most of the work that every HR department does - dealing with employees, recruitment, and training - has to do with the governing of how human resources are utilized. Human capital can then be defined as the quantification of the amount of skill an employee has and what results that skill produces in a business.

The most important role of the HR department is to maximize the ROI on human capital. This is achieved through emotional investment in the employees - proper communication, empathy, motivation and making the employees feel appreciated. These are the most basic characteristics of effective leadership. 

Another way of getting a high return on human capital is trying to minimize the number of problems that arise and creating ways of dealing with them should they come to be. A lot of resources and time are lost should these problems not be dealt with early enough.

The benefits accrued by the Human Resource team may not be visible immediately but have a very serious long-term impact on the company’s performance. And ultimately, the role of the HR team can only be achieved by putting the person before the job - increasing both financial risk and potential gain.

Goals and Roles of HR

Aside from maximizing on human capital, HR teams have a slew of other functions within an organization. Such a team is normally comprised of personnel mostly responsible for the management and monitoring of employee relations and performance together with resource planning.

Goals of HR - Primarily, a human resource team should be able to help an organization meet decisive goals put in place by higher management. This can be achieved by recruiting competent employees and overseeing them as they drive the company towards its goal.

This can be done by:

  • Ensuring effective utilization and maximum development of human resources.
  • Identifying and satisfying the needs of individual employees.
  • Maintaining a high sense of morale and motivation within the workplace.
  • Enhancing the ability of every individual in performing their jobs.
  • Ensuring workplace diversity and creating a sense of inclusion.
  • Creating a sense of respectable company culture.

Roles of HR - Aside from placement, training, career development and recruitment, HR teams are also responsible for the facilitation of all kinds of documentation such as contracts and passports, both in and out of the company. For instance, should a member of the staff need to travel on a business trip, it is the role of the HR department to see to it that functions such as tickets and bookings are dealt with.

Other roles that the department plays a crucial role in include:

  • Recruiting new members of the staff and placing them at suitable positions.
  • Termination of employees in case of low productivity or for any other such reason.
  • Employee performance analysis and evaluation.
  • Scheduling work holidays and arranging paid vacations
  • Creating systems that promote suggestions to reduce costs and increase profitability
  • Improve employee motivation and morale with things such as rewards and promotions.

Any challenges that the department meets trying to achieve these goals should be anticipated and properly dealt with. The most common way of doing so is having every HR member actively participate in decisions that affect the organization.

Challenges of HR

In meeting the roles and goals assigned to them, HR teams will come across various hurdles that need to be faced. In many companies, the team will have little to no control over these issues, compounded by the fact that HR departments are almost always in the spotlight, which leads to a lot of criticism. 

With the advent of technology, it has only gotten more so difficult, as HR has to deal with persistent updates, remote international teams and social media. These issues all come together to make it a really difficult job with numerous challenges. Identifying and overcoming these challenges is crucial to saving time and money for even the largest organizations.

The most common issues faced by these organizations include:

  • Training and career development
  • Looking out for the health and safety of the employees.
  • Keeping track of employee relations
  • Managing diversity in the workplace.
  • Maintaining a healthy business culture.
  • Employee engagement.
  • Recruitment and placement

Organizational Structure of HR Teams

In solving these problems to accomplish its goals, the internal structure of an HR team is incredibly important. If anything, these problems should be the guide towards achieving the goals the organization has in mind. Middle to large-sized businesses should have a definite structure that comprises of different units that each specialize in functions that relate to management of human resources - all in different ways. 

Every one of these units should also consequently have someone in charge that reports the progress to a central leader, who could be an HR person in charge. To achieve the most efficient structure in an HR team, every unit should have a special function - taking care of key areas in the organization. 

The Essential Tips on How to Construct an Efficient HR Team

The HR department is one of the most misunderstood sectors of every company. It deals with people, but this line of business has to do with much more than mere hiring and sacking. Education, problem resolutions, business tactics – all these things fall into the “basket” of responsibilities of every HR department. 

To make a company function like a well-oiled machine, an HR department has to be structured the right way. Depending on the way you form your team, the ROI of your company may go up and down. Lots of budget cuts and layoffs can be avoided by simply having a more efficient HR team. That’s why we’ve decided to give you all the necessary tips to give your company the backbone it deserves. 

Getting to know the Matrix model

No, this specific way of organizing your HR department does not involve entering a dystopian cyber universe. It indeed was named after the famous movie, because of the way you can bend the fabric of your company with this particular design. It’s meant for companies that have multiple channels of communication and a mandatory daily series of contact with different layers of the staff.

This type of HR department is not designed like a stairwell, with one person on top and the others revolving around him. The Matrix model allows for multiple members of the team having a revolving door of responsibilities. It requires dedication and severity in business conduction, a staff of versatile and communicative experts. 

The Shared Service Model – for smaller companies

If your budget is low and your company is not so hierarchy-oriented, then the shared service model will rejuvenate the ranks of your employees. It includes a customer-oriented relationship, with the employees themselves handling much of their inner problems, conundrums, and tasks. 

Because the HR team will be less burdened by trivial matters, they will be able to make better decisions and conduct their tasks with the utmost level of precision. Structural problems will be a thing of the past, as there will be no inability to juggle between different tasks.

HR Business Partner Model (HRBP)– for the more daring entrepreneur

The last model we would like to present consists of an innovation-oriented method of functioning for tasks that involve a lot of risky endeavors that might make or break the inner workings of a company. To fully make use of HRBP, your company should be of medium size, without too many levels of communication. The more levels there are, the more likely a mistake is to happen.

Moreover, this modus operandi gives you the opportunity to conquer short-term goals and not jeopardize an already fragile budget. When it comes to an urgent situation, a determined second layer of the HR department will allocate the elements of the problem according to their expertise, and, as such, solve the conundrum with the utmost swiftness. Additionally, it’s more difficult to apply it to big companies. 

Basic Units in a Hierarchical HR Team Structure

In any HR team, the perfect indicator of the structure is a well-defined hierarchy of every employee, their function and who in particular is in charge of them. 

These rankings, in turn, coincide with the function each of those teams or HR members have in the organization. Further, they should be the guiding factors towards solving problems HR is going to encounter along the way.

Accordingly, here are the basic levels in the aforementioned hierarchy and their roles:

Recruitment and placing

At this level, recruitment managers are responsible for finding the right employees that can fill certain positions in be business. This unit of the HR team covers the aspects of staffing the business and placing them in appropriate departments.

This unit is usually primarily responsible for attracting top talent, advertising vacant positions, putting them through standard tests to filter out the best suited, carrying out interviews and arranging meetings with the higher-ups who are expected to make the final call.

Onboarding, training and career development

This phase is a crucial step in the employment phase since the jobs carried out by an employee differ from one company to another. New employees should always be shown the ropes - primarily, told what their new responsibilities are and how they are expected to carry out those functions.

Overseeing health and safety of employees

Ensuring workplace safety is another critical role played by the HR team. This should be done as per workplace safety guidelines put in place by the Occupational Safety and Health Act (OSHA). The unit responsible for this sector should work very closely with the compensations unit should any fault be placed on management for accidents in the workplace.

Ensuring proper employee relations and employee engagement 

Human relations is at the core of HR’s roles, even before the modern definition of the department’s roles was put in place. This team should find ways of resolving any conflicts that arise and improving employee satisfaction.

Motivating employees with benefits and compensation

Compensation is the most primary way of improving motivation in the workplace. This specifically includes setting up specific structures and teams meant to encourage competition in the workplace as a result of work done. Benefits, on the other hand, include payroll, personal and insurance benefits. 

Ensuring the business complies with the law

It’s very important that the business complies with local regulations relating to fair employment practices such as eliminating discrimination, facilitating proper working conditions and various other issues that negatively affect productivity. Remember, low productivity means less profitability.

Aside from local laws, there is also a myriad of federal laws and regulations that those in this HR unit would have to be aware of.

Managing diversity in the workplace

The reach of the HR department is far greater than regular employees. Today, and perhaps always, having people from different cultures working in the same place can mean a drastic increase in productivity - culminating in more sales and more experience. These will ultimately lead to better insight into problems and better problem solving than having localized teams.

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Jack White is an employee of the PR department at  Jack worked his way up from the bottom as a writer and he hopes to continue his success even into the future. Follow him on Twitter.