Analysing Organisational Design

The structure of an organisation permeates all areas of the business, as it defines the conditions under which work is completed. For that reason, a recent report by Deloitte ranked organisational design as the highest ranking priority of ten leading human capital management trends, with 92% of executives rating it as very important.

Why is understanding your organisational design important?

Step into the 21st Century.

Today, high performing organisations operate in a completely different landscape to businesses a decade ago. To compound this disparity, many businesses still employ organisational models developed way back in the infancy of the industrial age. The traditional model which focuses on hierarchical job structures has been disrupted by organisations becoming more digital. Modern business face a growing imperative to consider organisational designs that allow themselves to move faster, adapt more quickly, facilitate agile learning and development, and embrace the career demands of a growing millennial workforce.

One size doesn't fit all:

Traditional organisational designs will be disrupted by changes in workforce dynamics, that is guaranteed. With that said, there is no 'one size fits all' solution that can be applied blindly to any business. What works for Google may not work for a law firm, or a Government organisation, and certainly may not still work for Google in ten years time. The result of this is that a business will lie somewhere on the spectrum between a traditionally hierarchical and an entirely flat organisation and will likely have to restructure several times within its lifetime.

Organisational design and change is a complex field yet many businesses over simplify it to a function of cutting costs. Instead, decision makers in organisations need to design the structural dynamics to suit their strategic goals. In order to make informed decisions on what is a complex area, access to accurate and multidimensional data will be imperative. Live insight into details such as demographics, labour type, skills, training and leadership involvement augmented with data on performance and productivity will give businesses to the tools to design their workforce to suit the needs of the modern landscape.

More than just boxes and lines

Organisation charts are a great way to visualise reporting relationships and structure, however organisational charts alone provide little insight into their efficacy towards achieving strategic goals or their adaptability to future changes.

A company's reporting structure is one of the most obvious and heavily relied upon, but if you focus only on the boxes and lines of an organisational chart when considering organisational design, you risk overlooking the detail that might define the direction of your workforce over the coming years. These factors include, but are not limited to, demographics such as age or gender, skills inventories, resource distribution and span of control. Cross-dimensional analytics can be enhanced through the addition of other people data into your organisational chart, this can allow you to see the whole picture of your business. 

Without this level of analytics, it would be like trying to rearranging the deck chairs on a cruise ship, and missing the fact that the ship is sinking.

Organisational Design Analytics

The intelliHR platform has a suite of analytics reports dedicated to organisational design, allowing you to drill deeper into any patterns or opportunities that may exist within your business.

Headcount focuses on the number of people employed by the organisation at any time. This is able to deliver trends on organisation growth over time or changes in structure. It also provides insight into the distribution of your workforce across various categories, both work and demographic based. Headcount data is collected from employee profiles and job attributes. The more information you are able to include in these profiles, date of birth, gender, etc, the more complete the data set for this report will be, eliminating 'unknown' quantities.

The headcount report allows you to view data based on headcount or FTE.

• Headcount refers to the number of bodies in your organisation at any time. It does not distinguish between full time, part time, casual, etc. employees.
• FTE refers to the number of full time equivalents working in your business. This often be a more accurate representation of the total capacity of your workforce at any time.

Using your Headcount Report:

1. Reporting Period: Choose the date you wish to report on using the calendar at the top right of the screen. The report will show you the previous 12 months, so if you need to investigate earlier data adjust this date.

2. Choose your preferred display (FTE or Headcount) at the top left of the screen. The report defaults to headcount.

3. Cross-filtering: You can cross filter your data to provide more specific insight into the structure of your workforce.

• Work Type / Work Class / FTE: shows the distribution of human capital across different employment types. Is your workforce permanent or contingent? What is the ration of full-time to part-time to casual?
• Leave Status: shows how many employees are on extended leave. Have these employees been temporarily replaced? What workforce planning needs to be actioned to facilitate their return?
• Gender / Age: demographic filters can provide useful insight into the composition of your workforce. How many employees are nearing retirement? What positions do they hold? Is your business compliant with the Workplace Gender Equality Act 2012?
• Business Unit / Business Entity: shows the distribution of human capital across different areas of the business. Where do you have the most capacity? Does this reflect real business needs?

4. Export data: you can export any of the charts returned by your filters as well as the corresponding line data in csv. format. For instructions on how to do this see, the Analytics section in the System Administrator guide.

Starters and Leavers

Starters and Leavers focuses on ebb and flow of employees through your business. It operates as a visual representation of growth or reduction in workforce numbers as well as an indication of the experience levels of your staff. For example, you may have turned over a large group of employees and subsequently needed to replace them. This may not show up on your head count analytics as the net organisation size would remain steady. It would however show up on your Starters and Leavers report as a large influx of new employees. This might identify a need for increased training resources, or capacity planning while employees are still ramping up to full productivity.

Using your Headcount report: 

1. Reporting Period: Choose the period you wish to report on using the calendar at the top right of the screen.

2. Cross-filtering: You can cross filter your data to provide more specific insight into the structure of your workforce.

• Work Type / FTE / Pay Grade: shows the movement of human capital across different employment types.
• Gender / Age: demographic filters can provide useful insight into the composition of your workforce. This may show a pattern of movement across certain demographic units which could potentially diagnose underlying HR or culture challenges and opportunities.
• Business Unit / Business Entity: shows the distribution of human capital movement across different areas of the business.

3. Export data: you can export any of the charts returned by your filters as well as the corresponding line data in csv format. For instructions on how to do this see, the Analytics section in the System Administrator guide.

Span of Control

Span of Control focuses on the number of employees reporting into supervisors across your organisation. It can be used as a measurement of your organisation's management style and structure, for example whether you prefer a narrow, high touch leadership model, or a wider, flatter span of control. Accordingly, it can also be used to diagnose if your business has strayed from the leadership strategy, or identify if there are any opportunities for restructuring leadership relationships. It is an extremely useful report that can quickly identify whether your leadership is being spread to thin, or conversely whether your employees are being over-managed.

How is span of control calculated? Span of control is calculated by adding the total number of employees reporting to a supervisor and dividing by the number of supervisors. As such, a middle manager will contribute both to direct reports as they report to a supervisor, and also as a manager as they have direct reports. The calculation is expressed below:

Note: some sources use FTE when calculating the total number of direct reports. The intelliHR platform has chosen to use headcount, as this more accurately reflects the human leadership dynamic.

Using your Headcount report: 

1. Reporting Period: Choose the date you wish to report on using the calendar at the top right of the screen. This is an 'as at' measurement so will return analytics on that specific point in time.

2. Cross-filtering: You can cross filter your data to provide more specific insight into the structure of your workforce.

• Manager: allows you to visualise the spread of direct reports across individual managers
• Gender: demographic filters provide useful insight into the composition of your workforce. This may show a pattern of movement across certain demographic units which could potentially diagnose underlying HR or culture challenges and opportunities.
• Business Unit: shows the distribution of human capital distribution and leadership dynamics across different areas of the business.

3. Export data: you can export any of the charts returned by your filters as well as the corresponding line data in csv format. For instructions on how to do this see, the Analytics section in the System Administrator guide.

Remuneration

Remuneration focuses on your how much you are paying your workforce, and how this is changing over time. This lets you track the distribution of labour expenditure in your organisation, and track variances or trends across various business units, which can all be filtered.

How is remuneration calculated? Remuneration is calculated using annualised data. That is, any data point you investigate returns the expense that would be recognised by the business over a year period. For example, if you hover over the November data point on the line graph, it will return the aggregated annual salary of all people employed at that time. Similarly, any filter below, returns the total annual salary for that particular group of employees at the date selected.

Using your remuneration report:

1. Reporting Period: Choose the date you wish to report on using the calendar at the top right of the screen. The report will show you the previous 12 months, so if you need to investigate earlier data adjust this date.

2. Choose your preferred display (Total Annual or Base Annual) at the top left of the screen. The report defaults to headcount.

3. Cross-filtering: You can cross filter your data to provide more specific insight into the structure of your workforce.

• Work Type / Work Class: shows the distribution of human capital across different employment types.
• Business Unit: shows the distribution of labour spend across different areas of the business. Which departments do you spend the most on labour? Does this reflect real business needs and revenue return on investment?
• Pay Grade: this report lets you filter by pay grade. It also allows you to compare by amount spent and headcount across the pay grade. Is your spend proportionate to the size of a corresponding pay grade level?
• Gender: demographic filters can provide useful insight into dynamics of your workforce. Is your business compliant with the Workplace Gender Equality Act 2012?

4. Export data: you can export any of the charts returned by your filters as well as the corresponding line data in csv format. For instructions on how to do this see, the Analytics section in the System Administrator guide.