Hierarchy vs Flat Company Structure – Does it Matter for Recruitment?

Hierarchy vs Flat Company Structure – Does it Matter for Recruitment?

The way that a company is organized has traditionally focused on a hierarchical structure, with levels of management that employees can promote to. While this structure is still predominantly used, especially within large companies, the flat company structure is becoming more popular. When it comes to recruitment, does it really matter what structure a company has? Find out more about the pros and cons of these structures and the impact that they have on recruitment.

How Does a Hierarchy Structure Work?

This structure will have a person at the top, often a CEO or company director, and then various levels of management underneath. Often there are managers overseeing different departments or areas of work and this structure engenders a clear path of career progression for employees to aspire for promotion. It also allows employees to gain experience in various parts of the organization and utilize their skills in different ways. The reporting structure is usually clear which ensures appropriate governance is in place for decision making.

Unfortunately, hierarchy usually comes hand in hand with bureaucracy. The more layers in the chain of command, the harder it becomes to get things done, especially at pace or for ideas that have originated on the ground floor. The structure can also foster a competitive culture as roles decrease as the management level increases. Focusing solely on career progression within a company can mean people take their eye off being a team player.

Why are Some Companies Adopting a Flat Structure?

The flat company structure removes many of the layers of management that you find in a hierarchy, with some flat companies removing middle management altogether. There are usually still people in management positions and worker positions, but the gap between them is drastically reduced. Some companies in the life science world adopt an even more radical approach and have a totally flat structure.

This are often start-ups where the number of people working for the company is very small.

One of the findings of the 2017 Mercer’s Global Talent Trends Study was that a third of companies had plans to flatten their structure. Reasons for this included reduced costs as fewer management positions were needed, and increases in agility, efficiency, and innovation.

Reducing middle management allows for quicker, more accurate communication between the people with ideas and the people who can support their implementation. Management being present within the team, discussing decision making openly and bouncing ideas off the whole team speeds innovation and increases employees feeling of value and worth.

However, there are also disadvantages to this structure. A flat structure will become increasingly difficult to manage as the company grows and the number of employees increase. This can inadvertently allow an informal hierarchy to develop or for processes to not have adequate oversight and governance. Without layers of management there is also very little in terms of progression for employees. Horizontal moves to work in different areas may not be as attractive as promoting upward through an organization.

How Company Structure Impacts Recruitment

It is clear that there is not a ‘one size fits all’ when it comes to the structure of an organization. When it comes to recruitment, the structure of any company gives an insight into the ethos and values and so this should be considered carefully. For a hierarchy, recruitment can focus on the areas of speciality that employees may wish to consider working in, or the career path that new recruits could aspire to take.

If your life science organization has a flat structure, it is important to ensure this is clear at the recruitment stage. It is still common that potential recruits will assume there is a hierarchy unless you explicitly state that there isn’t. For people who thrive on rising through the ranks, this structure will not be as appealing, so recruitment needs to focus on what benefits this structure has. Appealing to people who value being in part of an innovative team who can progress ideas quickly with less barriers, over being able to promote through a company will ensure you recruit and retain the right people from the start.

Get Recruitment Support

No matter what your structure is, getting the best recruitment support is critical to making the best progress. Let the team at GeneCoda® provide you with quality recruitment advice and help you to find the candidates you need – we look forward to working with you.