5 Reasons Why a Business Must Have An Up-to-Date Org Chart

It is true that organisational hierarchies help to inform employees of who they are reporting to and who the “big boss” is… However, there is so much more to it than that. 

In fact, there are many benefits to having a clearly presented organisational structure. Org charts serve as a bridge that connects employees across various roles, from HR professionals to managers, ensuring everyone is on the same page. They facilitate transparent communication regarding the chain of responsibilities, benefiting both current employees and potential future hires.

In this blog post, we will explore five main reasons why your organisation should have an up-to-date org chart in place. So, grab a cup of coffee, sit back, and let’s jump into it!

1. Instils Confidence in Prospects When Pitching & Competing for Business 

Let’s start with an example. Imagine a scenario where you are part of a marketing firm that offers extensive marketing services. There is a potential client looking for an organisation to help them plan, design, and execute their marketing activities. That client invites only 5 eligible companies to pitch to them and yours is one. Being able to pitch for their business requires you to present information about your organisation, including a proposal showing your organisational hierarchy and overall corporate structure. 

Having a professional and up-to-date org chart for you to present demonstrates that you are a well-established, solid, and sustainable organisation. This would instil more confidence in your prospects as not only does it present who each employee in your organisation is, but it also gives the impression that you invest in your systems and have clarity amongst all employees in relation to reporting lines and chains of responsibilities. In short, it reflects extremely well on the smooth functioning and running of operational procedures within your organisation. It communicates to the clients that you are a reliable organisation with clarity amongst all stakeholders, which leads us into the next point.

2. Ensures HR & Managers Are On The Same Page 

Visually Shows Employees & Communicates the Reporting Line

In large organisations, ensuring visibility and clarity on employee responsibilities and leadership are essential factors when it comes to operating efficiently and minimising costly errors. Having a hierarchical representation of all internal teams and their managers is extremely important for employees to be able to do their jobs well. Presenting an org chart in this functional yet diagramatical manner is a more practical way of communicating the reporting line. 

Easy for Managers to Find Out Who To Go To for Approvals

An up-to-date org chart that allows access for both the managers and HR professionals, can also resolve heaps of issues & answer questions that could, unnecessarily, be taking up too much time. It would allow managers and team leaders to quickly access the most current information to know who to address if they need approvals for actions such as purchasing or hiring. Overall, this type of software can alleviate over 50% of the administrative work that the HR team would otherwise have to do, while reducing lots of errors along the way. 

However, it is important to remember that a live org chart is far more than just a pretty diagram. It is an active software tool that allows you to click through parts of it to gain access to information such as contact details, current projects, team divisions, and more. This leads us to the next reason about how a live org chart helps to connect all HR information together by acting as a database and entry point for employment-related processes.

3. Connects All HR Data Points Together

Acts as a Database for Information Retrieval

Having an org chart is an easy way to get all HR-related information from the same place. Just looking at it, this may not be surprising to you… but that doesn’t even scratch the surface. Specialised software can allow an org chart to function as an interactive database that employees can go to, in order to view, download, and update documents such as position descriptions and policies. Any changes made to the org chart automatically update for the entire organisation which means that all employees will always have access to the most current internal data. 

Let’s go back to our marketing firm example. If you are looking to fill a position for a marketing executive role but want to change the job description from in-person to fully remote first, then this would be the most efficient way to obtain that information and alter it. Go to the live org chart, click into that position, and update the node. That’s it! From that point on, everyone else in the organisation can see that the marketing executive role is fully remote. No more need to ask the HR team what the new hire will be doing as everything is clear, up-to-date, and accessible.

Acts as an Entry Point for Employment-Related Processes 

A live org chart does not only create 100% clarity for managers and employees about reporting lines and responsibilities, but it also acts as the entry point for managers to start employment-related processes, such as hiring and off-boarding. Wouldn’t it be silly to have to navigate your way through a large spreadsheet just to find out who needs to approve a hiring request and then go somewhere else to actually lodge that request? It would be so much more practical to obtain this information, as well as launch these employment-related processes, from the same place. This is why your business needs an org chart.

We can compare using a live org chart to mining for gold. Each node on the org chart is like a rock. We want to mine that rock to obtain that valuable gold and that valuable gold, can unlock a world of opportunities. Same with the org chart. Once you tap into a node, you are able to launch actual processes which can lead you to advance and progress your organisation. For example, if using the software to recruit an employee for a vacant position, you can just input the roles and responsibilities of that ideal candidate, get approval, send it off, and start receiving CVs… all in the same place! 

Let’s move on to the applicant and employee side of things…

4. Enhances Job Ads & Facilitates Smoother Career Progression

Clearly Able to See Reporting Line for Prospective Employees

For prospective employees, it is important to have a clear understanding of what their responsibilities will be and who they will be reporting to or working with. Being transparent with this information, in an easy-to-navigate org chart, improves the quality of job advertisements and makes the recruiting organisation stand out to employees. Candidates may also be more attracted to a job opening if they can see a potential path for advancement. This also applies to current employees. 

Able to Visualise Progression Paths/Opportunities for Current Employees

Being able to distinctly see their progression paths and opportunities on org charts can help with planning career development and understanding the skills/experience needed to progress to the next level. As the org chart is automatically up-to-date (hopefully), employees will be able to easily visualise opportunities or obstacles, and adjust based on that information.

5. Provides An Essential Resource for Security Accreditation

Every security accreditation program has an HR module and having an org chart already in place checks off this requirement. This module ensures the existence of clarity between the chain of responsibility in the event of security breaches or concerns regarding the security compliance. Take the ISO27001 standard for example. It is an internationally recognised security framework that demonstrates to stakeholders and customers that your organisation is committed and able to manage information both securely and safely. As it’s essential to have clarity in the responsibilities of employees to comply with ISO regulations, an up-to-date org chart provides this resource in a concise and easily understood module. Additionally, whilst it is important to show auditors the org chart, it is equally as important to show them how it will remain up-to-date all the time. Whether the data is entered manually or you have a specialised software that updates automatically, org charts will be a game changer.

So, as you can see, for a truly dynamic experience, it is important for a business to have up-to-date org charts. From facilitating clear communication of reporting lines to providing essential resources for employment processes, org charts are a powerful tool!