Why Have an Organizational Chart?
6 min read
Organizational charts have become commonplace for businesses of all sizes, helping show a company’s entire organizational structure, and where each employee fits in. There are many benefits of organizational charts, which can range from simple to sophisticated, and hold large amounts of information about the business, employees, and their work.
Click here for more information on what is an organizational chart, or continue reading to find out about the best uses of an organizational chart.
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One of the main benefits of having an organizational chart is that it provides visibility across an entire company. This means employees, or external professionals, working across different departments or companies, can easily find people in business areas they aren’t familiar with, which is particularly useful for employees who work remotely, in large companies, or in companies with multiple offices.
The visibility afforded by an organizational chart can also increase productivity. For example, if an employee in sales is trying to find a legal executive who works across their department, they may need to contact multiple people, taking time to contact each person - and interrupting their workflow - before they find the right legal executive with sales expertise. With an organizational chart, the entire legal department is laid out with each employee’s specialties and contact details, meaning staff can go directly to the right person, not wasting time trying to figure out who they are.
This also comes into play with projects that require work across different departments, or any work that has multiple internal stakeholders. Not only can employees track down these stakeholders, but having a visual representation of the people and departments within a company can help individuals to recognize who might be a stakeholder in a particular piece of work. This lessens the chance of a stakeholder being forgotten about.
Visibility is also a factor in reporting structures, which are made clear in an organizational chart. Employees know who to report to, and who to direct certain questions or issues to. When something needs to be escalated, an organizational chart makes it clear who the next person in the workplace hierarchy is. This also helps in giving praise about a staff member to their manager.
Better transparency of company structures is helpful for each and every staff member of a company, and for external users, but the benefits of an organizational chart are particularly felt those working in HR. HR employees often work with a company’s organizational chart to understand where an employee sits within the business, what department they work in, who they report, and more.
For new employees, remembering the names and responsibilities of new colleagues can be virtually impossible, especially in large companies. Having an organizational chart means new employees can learn the names of their colleagues much easier, enabling them to fit into their new workplace without the overwhelming feeling of not knowing anyone.
The productivity of new employees is much improved with the ability to consult an organizational chart. New staff don’t have to waste time figuring out who they need to contact for help with certain tasks; instead they’re able to contact the right people quickly, enabling them to get on with their work.
Organizational charts can include employee responsibilities, current workload, and upcoming projects. This is especially useful for managers in allocating new tasks among teams, as well as in projecting dates or issuing deadlines for work to be completed. It also helps to prevent doubling up on work, as managers can see tasks that are underway or already assigned.
Organizational charts are also useful for business leaders to assess the overall size and shape of the company against the business need. Managers can use an org chart to see areas that are under- or over-resourced, helping them to make decisions about adding or reducing their headcount.
In making business decisions about a restructure, merger or acquisition, an organizational chart is a helpful tool in determining the new shape of the business, as well as seeing employee’s strengths and expertise, and how they might fit into a new organizational structure.
Employee work context
With a clear organizational structure, employees have a better understanding of how their own work contributes towards the overall direction of the company. It’s easy for someone to see how their own skills are contributing towards the success of their immediate team, and how the team’s success affects the growth of the business.
This context helps staff to prioritize their work, and also understand the priorities of the company - particularly if they can see how the businesses org chart is evolving.
The better employees know each other, the better they can work together. Organizational charts can include much more than simple work details - personal information about employees such as their families, interests and backgrounds can be included in their org chart profiles, helping them to make quicker, stronger connections with colleagues.
Employee career progression
Studies have shown that employees are much more motivated when they can see how their career might progress within their workplace. By having an organizational chart, staff can see how the company is structured, and how they might be able to fit into that structure as they gain experience and skills.
Employees can motivate themselves to diversify their skills, aspire to different roles, and foster better work relationships with people in areas that appeal to them. This motivation can only improve the performance of employees across the board.
Now you understand the benefits of an organizational chart, why not look at making one for your company? Click here to search your company on The Org, to see if your position has been added yet, and create it if not.