1. McLean & Company1 McLean & Company is a research and advisory firm that provides practical solutions to human resources challenges with executable research, tools, and advice that will have a clear and measurable impact on your business. © 1997-2014 McLean & Company. McLean & Company is a division of Info-Tech Research Group Inc. Refine the HR Organizational Structure and Optimize Department Efficiency Whether your organization is requiring you to grow or asking you to cut down on costs, make sure that your department is structurally efficient. McLean & Company is a research and advisory firm providing practical solutions to human resources challenges via executable research, tools and advice that have a clear and measurable impact on your business. © 1997 - 2014 McLean & Company. McLean & Company is a division of Info-Tech Research Group

2. McLean & Company2 HR leaders tend to let their department structures “happen” instead of actively shaping their departments for efficiency and usefulness. Introduction HR leaders who need to change their department structures due to: Growth Cost and/or inefficiency Internal HR team conflict Plan a redesign project that ensures alignment to business goals. Assess different options for structuring your HR department. Learn about the organizational design principles that shape your structure. Determine the movement or role change of employees in the new structure. This Research Is Designed For:This Research Will Help You: Redesigning HR structure is not a fix-all project; look at other areas of potential change, like programs and processes, before engaging in a project this extensive.

3. McLean & Company3 The Situation: Many HR departments let their structures evolve, focusing on current need without considering business strategy or future needs. This means that their structures are not meeting the needs of the business or are compromising their chances of future success. If your HR structure isn’t optimal, this leads to excess costs, low efficiency, and low employee engagement. The Challenge: HR leaders are hesitant to undertake HR structure changes because they seem too daunting. HR leaders get lost in convoluted redesign processes, and end up with structures that don’t meet their unique needs. HR leaders implement HR structures believing that what worked for other organizations will work for them, and then wonder why they fail. The Solution: Use this toolkit to guide your redesign process and ensure that your new structure will deliver on business needs and goals. Use organizational design principles to make smart structural choices that address your pain points or areas of opportunity. Select a new structure and communicate to HR and the rest of the business to ensure clarity and buy- in. McLean & Company Recommends: Using a RACI (Responsible, Accountable, Informed, Consulted) chart to ensure role clarity, both at a leadership level and with functional teams. Setting objectives based on business inputs to ensure that the HR department redesign promotes business alignment. Executive Summary

4. McLean & Company4 How to use this blueprint We recommend that you supplement the Best-Practice Blueprint with a Guided Implementation. For most McLean & Company members, these Guided Implementations are included in your membership plan.* Our expert analysts will provide telephone assistance to you and your team at key project milestones to review your materials, answer your questions, and explain our methodology. McLean & Company’s expert analysts will come onsite to help you work through our project methodology in a 2-5 day project accelerator workshop. We take you through every phase of the project and ensure that you have a road map in place to complete your project successfully. In some cases, we can even complete the project while we are onsite. Do-It-Yourself Implementation Use this Best-Practice Blueprint to help you complete your project. The slides in this Blueprint will walk you step-by-step through every phase of your project with supporting tools and templates ready for you to use. Project Accelerator Workshop You can also use this Best- Practice Blueprint to facilitate your own project accelerator workshop within your organization using the workshop slides and facilitation instructions provided in the Appendix. Book your workshop now by emailing: WorkshopBooking@McLeanCo.com WorkshopBooking@McLeanCo.com * Gold and Silver level subscribers only Or calling: 1-877-281-0480 Ext. 3001 There are multiple ways you can use this McLean & Company Best-Practice Blueprint in your organization. Choose the option that best fits your needs: Do-It-Yourself Best-Practice Toolkit OnsiteWorkshops Free Guided Implementation

5. McLean & Company5 Guided Implementation points in the HR Department Redesign project Book a Guided Implementation Today: McLean & Company is just a phone call away and can assist you with your project. Our expert Analysts can guide you to successful project completion. Here are the suggested Guided Implementation points in the HR Department Redesign project: Section 2: Pre-work: Understanding your options Check your understanding: Review drivers, structure options, and organizational design principles to optimize your HR structure and ensure that you have key understanding of the options available to you in this project. Determine if other external options are an avenue you would wish to explore further. Section 3: Gather data and select a structure Collect data and select a structure: Review business inputs and consolidated information as well as objectives and parameters, discuss structural options and selections, interpret results of gap analysis, and discuss organizational design principles. Section 4: Arrange your team within the new structure Assess current HR team’s skills & capabilities and identify gaps: Assess current team’s capabilities, identify resource shortages or surpluses with HR leadership team, determine HR leaders’ accountabilities using RACI charts, select metrics/scorecard method, create and present business proposal. Section 5: Implementation: Communication and monitoring Implement the redesigned structure: Create a communication plan for HR and business teams, have each of the function leaders complete the RACI chart with their teams, finalize metrics and determine key milestones, discuss short- and long-term plans for success. To enroll, send an email to GuidedImplementations@McLeanCo.com or call 1-877-281-0480 and ask for the Guided Implementation Coordinator.GuidedImplementations@McLeanCo.com This symbol signifies when you’ve reached a Guided Implementation point in your project.

6. McLean & Company6 What’s in this Section:Sections: Make the Case Pre-work: Understanding Your Options Gather Data and Select a Structure Arrange Your Team Within the New Structure Implementation: Communication and Monitoring Appendix Factors affecting organizational structure Effective vs. ineffective structures Do you have a structural issue? Determining the driver of the project

7. McLean & Company7 Before continuing, learn why HR department structure matters Organizational Structure is the formalized way in which members of an organization interact with each other, as well as how their roles are designed, and how accountabilities are assigned. Organizational structure dictates reporting relationships and lines of authority. Why should you care about HR structure? HR structure is key to ensuring that the HR department is capable of delivering on business goals. Effective HR structures enable business support and delivery of services. A good HR structure is essential for efficiency and cost effectiveness. A good department structure and implementation helps HR members perform their jobs more effectively.

8. McLean & Company8 HR organizational structure impacts more than just the HR department HR structure is linked to the fast and effective delivery of HR services and alignment to business goals. HR structure is important to Strategy: A comprehensive and well thought-out HR organizational structure will enable HR to support business leaders in achieving business objectives. HR structure is important to Business Leaders: Having an organizational structure that is flexible and adaptive to the ever changing needs of the business will create stability in HR, avoiding the need to change constantly in support of dynamic business needs. HR structure is important to HR staff: Clarity of roles and accountabilities in an HR structure gives the HR team the ability to focus on the right goals and behaviors to drive the business forward. The McLean & Company 2014 Trends survey indicated that only 20% of business respondents felt their HR department’s structures were very effective in supporting the business – get feedback to fix this problem!

9. McLean & Company9 As the business changes, the HR structure needs to evolve with it Always look through the lens of your clients, or of your organization. Take your HR hat off, sit on the other side of the table and think about what would be valued. Understand what/where their pain points are. Don’t introduce [options] that are not connected [to business needs]. -- John Hovnanian, VP of Human Resources, Intermedix The global environment is changing constantly. HR must remember that business is becoming more complex and the need to be agile and adaptive to succeed has never been greater. Having a solid HR structure to help drive business success is an imperative. The role of an HR leader is to provide guidance to business strategy, align HR strategy to support the delivery of those business goals, and then ensure that there is a solid HR structure in place to deliver on the strategy. A flexible and adaptive approach to designing your new HR structure will support the organization in responding to future challenges and opportunities.

10. McLean & Company10 There are three key factors that go into organizational design decisions Additional factors to consider in your HR organizational design include the following: Whether or not your organization is multinational The size of your organization and HR department Whether or not your organization is unionized or non-unionized Operational effectiveness at a global level The most appropriate structure that will best fit with your organizational culture A good structure will be designed with all of these factors in mind. When these factors are disjoined or misaligned, it leads to structural problems. Organizational Strategy Environmental Forces Current HR Department Structure The business makes decisions (hiring, expanding into new geographies, etc.) and HR must support and enable these decisions. Cost cutting, periods of high growth, and organizational culture are all outside factors that affect how HR structures itself. The current HR structure will be impacted by any new proposed or refreshed structure. In many cases, problems with current structure are easy to identify.

11. McLean & Company11 There is no one right HR organizational structure, so create one that is right for your organization’s needs Every structure decision you make should be based on an identified need, NOT because it is trendy or “sounds” like a good idea. Be informed before you embark on HR organizational changes. The more complex question than figuring out your structure is in figuring out what role HR plays in being able to influence, support and develop the organization [through structure.] -- Joanne Taylor, President, Pinch HR Services Inc. Be sure to understand how HR structure relates to and links with the various components of the organization to choose one that offers the best support. HR organizational structure can make a real difference to the way an organization performs. However, be mindful that emulating one organization’s structure into a different organization may not work. There are a number of common HR organizational structures that are appropriate in different circumstances. None of them are necessarily ideal for every organization, and they don’t take into account the reality of what exists for different kinds of organizations. It is common for HR to have a combination or hybrid organizational structural type. When considering your organizational structure, analyze the environment, assess your internal needs and capacities, and then make sure your structure is a good fit with business strategy and environment.

12. McLean & Company12 McLean & Company Helps HR Professionals To: hr.mcleanco.com Empower management to apply HR best practices Develop effective talent acquisition & retention strategies Build a high performance culture Maintain a progressive set of HR policies & procedures Demonstrate the business impact of HR Stay abreast of HR trends & technologies Sign up for free trial membership to get practical solutions for your HR challenges "McLean & Company provides practical research, tools and advice covering the entire spectrum of HR & Leadership issues to ensure you experience measurable, positive results." - Rob Garmaise, VP of Customer Experience Toll Free: 1-877-281-0480