An HR department is built one role at a time and almost always in the same order, which makes it one of the easier structures to plan ahead of. The difficulty is the opposite of most departments: the first HR hire is asked to own everything from payroll to culture, and the useful structural decision is what they should not own. This page is the roles in order, the headcount that triggers each, and what stays outside the department at each stage. The manager arithmetic is the company's own, and the planner prints it for whatever headcount and span you run.
The department of one, and what it should not own
The first HR hire arrives somewhere between forty and eighty people and should own hiring coordination, onboarding, the employment paperwork and the questions people are afraid to ask their manager. They should not own payroll processing, which belongs with finance or a provider, or the org chart's structure, which belongs with the chief executive. A department of one that owns everything owns nothing well.
The department of three: hiring, operations and generalist
The second and third hires are almost always a recruiter and an HR operations or people operations person. That splits the function into filling seats, running the systems and answering people, which are three genuinely different jobs. At this size the head of people has a span of three and starts being asked for reporting the systems cannot yet produce, which is what pulls the operations hire forward.
Past a hundred and fifty: partners and specialists
Business partners appear, aligned to departments with a dotted line into each, and specialists arrive in the order the company's problems do: compensation when pay bands stop being obvious, learning when the manager population outgrows informal coaching. Each partner's dotted line is a standing relationship: on the worked example roughly a fortnightly check-in each, which is what the partner model actually costs in time.
Questions people ask about hr department structure
At what headcount do we need a full-time HR person?
Usually somewhere between forty and eighty, and sooner if hiring is fast. Twenty-eight joiners, leavers and movers a year is a part-time job; twice that is not.
Should payroll sit in HR or finance?
Finance or a provider, in most companies under a few hundred people, with HR owning the data that feeds it. One owner for the data, one for the payment.
Does HR own the org chart?
HR usually keeps it; the chief executive owns the structure it shows. Confusing the two is how a chart becomes a proposal nobody approved.