Organization Structure | Administrator Guide | Zoho People 5.0 help

Organization Structure

Zoho People's Organization Structure feature enables you to configure and manage your organization's hierarchy, allowing you to maintain data of your multiple companies or legal entities within a single Zoho People organization account. This centralized approach streamlines your HR management across your various entities.

Idea

Enabling organization structure will work well for your organization, if your organization:

  • Have multiple entities within an organization that need to be classified.
  • Have multiple entities within an organization that are dependent.
  • Have cross reporting structures between entities.
  • Needs multiple entities only for payroll processing.
Watch our help video on organization structure setup:

Info
If you want to maintain multiple organizations independently, with no dependencies, set up Multi-organization.
Alert
"Departments in Zoho People work independently of the organization structure. Departments cannot be tagged to organization structure entities. A department can be assigned to employees directly (via Employee Information in Operations or through Manage Accounts > Users)."

Zoho People’s Organizational Layers and Structure

The organization structure in Zoho People includes the following:
  1. Legal entity
    An independently operated company. It has legal rights and duties related to contracts, agreements, payments, transactions, obligations, penalties and litigations. You can have multiple legal entities in the same Zoho People account. Typically, multiple companies under the same parent umbrella can be created as legal entities. The legal entity is the highest entity in the organization's hierarchy.

  2. Business units
    Various operational units that exist within an organization. You can create multiple business units that operate within a legal entity. The business entity is the second highest in the organization's hierarchy.

  3. Divisions
    Parts of a business unit that are commonly based on location or products. You can create multiple divisions within a business unit. Division is the next level in the organization hierarchy, after business unit.
Idea
Salient Features of the Organization Structure
  1. An organization can create its structure, with one or several elements such as business units, legal entities, divisions, etc. 
  2. Once an organization structure is created, an employee can be tagged in any of these entities within the organization structure.
  3. The organization tree can be filtered and viewed based on the selected entities.
  4. Organization files can be shared based on organization structure's entities.
  5. Specific roles can be tagged to organization structures' entities.

Enable and Set up Organizational Structure

To enable organization structure in Zoho People:
  1. Navigate to Settings > Manage Accounts > Organization Setup > Organization Structure > Configuration.

  2. Enable Organization Structure.
    Info
    You can edit the name of the organization structure components as per your organizational preferrence. For example, a Legal entity can be renamed as Legal Business entity or Company.
  3. Navigate to the Legal Entity tab and define the legal entities of your organization.



  4. Navigate to the Business Unit tab and define the Business Units of your organization.



  5. Navigate to the Division tab and define the Divisions of your organization.

  1. After defining your organization's Legal Entity, Business Unit, Divisions, you can organize and structure them within the Manage Structure tab. This allows you to set up a clear hierarchy and efficiently manage the various layers of your organization.


Let's say an organization has two legal entities:
  1. Zylker Technologies
  2. Zylker Chemicals
You want to manage the details of both companies within a single Zoho People account. Enable the Organization Structure and do the following steps:
  1. Navigate to Legal entity tab and add Zylker Technologies and Zylker Chemicals as legal entities.



  2. Navigate to the Business Units tab and add the required Business Units as follows:



  3. Navigate to Divisions tab and add the Divisions of the organization.



  4. Navigate to the Manage Structure tab and set up your organization hierarchy using the organizational elements you added above.



Based on the above structure, Zylker is the Parent company and Zylker Technologies and Zylker Chemicals are sub companies under it. Cloud services, Telecommunications are business units within Zylker Technoligies. Pharmaceuticals and Speciality Chemicals are corresponding business units within Zylker Chermicals. 

The following scenarios can be achieved by using the above mentioned organization structure.
  1. The structure defined here can be tagged to an Employee.
  2. The request approver is independent of the employee's company, division or entity.
  3. There is no restriction in assigning reporting managers based on this structure. An employee belonging to one entity can report to someone of another entity.
  4. This is used to manage the data of multiple sub companies in one account. Filters will be available across the product, which will be useful to generate reports based on this structure.
  1. Navigate to Operations > Employee Information > Employees tab and click on the employee record to edit information.



  2. Tag the Legal entity, business unit and division to the employee and save the record.


Idea
Click the ellipsis icon in the top-right corner of the employee tab to import employee information in bulk.

Examples and Use Cases

Company: TechNova Group
Scenario:
TechNova operates in three countries — India, the US, and Germany — each registered as a separate legal entity due to local tax and compliance laws.

Legal Entities:
  1. TechNova India Pvt. Ltd.
  2. TechNova Inc. (USA)
  3. TechNova GmbH (Germany)
Business Units:
  1. Software Development
  2. Cloud Infrastructure
  3. IT Consulting
Divisions (Under Business Units):
  1. Software Development → Web Apps, Mobile Apps
  2. IT Consulting → Security Consulting, ERP Consulting
How organization structure can help:
  1. HR can manage all employee records in a single Zoho People account, yet segment them by legal entity.
  2. Payroll rules differ per country — but all data remains centralized.
  3. A project manager in “TechNova India” (Web Apps division) can still have a reporting manager in “TechNova USA” (Cloud Infrastructure unit).
  4. Reports and analytics can be filtered by country, business unit, or division.

Example 2: IT Conglomerate with Multiple Subsidiaries

Company: ByteWorks Holdings
Scenario:
ByteWorks owns multiple tech subsidiaries — each focused on a distinct technology sector.

Legal Entities:
  1. ByteWorks AI Labs (Machine Learning Solutions)
  2. ByteWorks Networks (Networking Solutions)
  3. ByteWorks Cloud (Hosting & Infrastructure Services)
Each has different payroll policies and HR practices but is managed by one corporate HR department.

How organization structure can help:
  1. Central HR can view and manage all sub-companies from one Zoho People account.
  2. Entity-wise access ensures managers see only relevant employees.
  3. Organization tree clearly represents ByteWorks → Sub Companies → Divisions.
  4. Streamlined reporting and compliance across all entities.

Example 3: IT Consulting Firm with Functional Divisions

Company: Infocrest Solutions
Scenario:
Infocrest operates as one legal entity but has multiple divisions based on client industries.

Business Units:
  1. Enterprise Services
  2. SMB Solutions
Divisions:
  1. Banking
  2. Healthcare
  3. Retail (under Enterprise Services)
How organization structure can help:
  1. HR can assign employees to specific industry divisions for internal billing and performance tracking.
  2. Reports can be generated by division to analyze utilization or profitability.
  3. Internal mobility (moving an employee from Healthcare to Retail) becomes traceable in the system. 

Example 4: IT Company Using Structure Only for Payroll Separation

Company: SoftEdge Systems
Scenario:
SoftEdge runs multiple offices in India — Bangalore, Pune, and Chennai. They don’t function as separate companies, but payroll needs to be processed independently for each location.

Legal Entity:
  1. SoftEdge Systems Pvt. Ltd.
Business Units:
  1. Bangalore Office
  2. Pune Office
  3. Chennai Office
How Organization Structure Helps:
  1. Enables location-based payroll grouping while keeping one unified HR database.
  2. Reporting and leave policies can be configured differently per business unit.
  3. Useful for organizations expanding regionally within the same country.

Comparison between Multiple Organization Setup and Organization Structure

Aspect
Organization Structure
Multi-Organization
Purpose
Manage multiple entities within a single organization account, with shared data and interdependencies.
Manage completely independent organizations, each with its own data, URL, and settings.
Ideal For
Businesses with connected branches or legal entities that share employees or reporting structures.
Businesses with separate companies or subsidiaries that operate independently, with no overlap.
Data Storage
All entities’ data is stored within one Zoho People account.
Each organization has its own Zoho People account and database.
Employee Visibility
Employees across entities can be visible and linked for reporting or approvals.
Employees in one organization cannot view or interact with employees from another organization.
Reporting Structure
Supports cross-entity reporting (an employee in one entity can report to a manager in another).
No cross-organization reporting allowed; each org has an isolated hierarchy.
Policy Configuration
Common or entity-level policies can be shared or customized within the same account.
Each organization has its own independent policies, settings, and workflows.
Access URLs
One common Zoho People URL for the entire organization structure.
Each organization has a unique Zoho People URL (e.g., companyA.zohopeople.com).
License and Billing
Single license and billing setup across the entire structure.
Each organization requires a separate subscription and user license.
HR/Admin Management
One HR team can centrally manage all entities.
Admin can switch between multiple orgs using the same login, but data stays separate.
Examples (IT Context)
  • Software firm with multiple legal entities under one parent (e.g., Zylker Technologies, Zylker Chemicals).
  • SaaS company with divisions like Cloud, Mobile, and Security needing shared reporting.
  • Holding company owning several independent tech firms (e.g., TechAxis Software, TechAxis Digital).
  • Managed IT firm maintaining client-specific orgs for data isolation.
When to Use
When entities are interconnected and need data sharing or cross-reporting.
When entities are completely independent with no overlap or dependency.