An organization’s human resources department plays a major role in the business’s strategic initiatives by contributing to recruiting and retention efforts, compensation, benefits and employee relations. Because the HR department handles diverse tasks, some organizations prefer to centralize the HR function, grouping the HR representatives on one HR team in a central location. This structure offers benefits to both the business and the employees in terms of communication, cost and efficiency.


A centralized HR team is more easily accessible to employees, which equates to more timely responses and resolutions. Employees are able to make a single visit to the centralized human resources office to handle all of their business needs instead of playing phone tag or making multiple trips to speak with HR reps at several site locations. This format pools all HR professionals into one department, making the department as a whole more knowledgeable. HR specialists with expertise in various areas such as payroll, benefits or recruiting are able to share their knowledge with team members, allowing them to better work together as a group and become more cross-functional in handling operational matters. A manager, for example, can resolve staffing, payroll and employee relations concerns with one phone call or visit instead of dividing the concerns among decentralized HR specialists for each issue.


A centralized HR team generates more efficient communication and works cohesively on complex matters because there are fewer "hands in the pot." If an employee calls to follow up on a previous request, for example, the HR rep can ask her co-workers for the required information since they are all working in close proximity. If a situation arises that the HR rep is unable to resolve on his own, he can quickly enlist the expertise of a colleague.

Operating Costs

A measureable advantage of the centralized structure for a human resources department is a reduction in operating costs. Fewer employees are required to run a centralized HR department than decentralized departments, which scatters HR reps in various locations throughout the organization. The cost savings are recognized through payroll, training and facilities, among other things.


Centralization encourages cross-training, which is a huge advantage when it comes to succession planning. Cross-training equips your HR department with the knowledge and skills they need to handle a wide scope of functions instead of focusing on a limited area of expertise. A well-rounded HR staff is more flexible when it comes to restructuring or reorganization because you have more qualified staff members who are capable of increased responsibility, which offers more room for growth not only as a department but also as an organization.