If the hard drive is using the factory file system and partition. Such as MBR with ExFAT. Then yes you will have to reformat the whole hard drive. At which point you can partition it to have a Time Machine partition and file partition.
Although it is not advisable to have your backup on the same drive as you are storing files. Performance in accessing those files will decrease during a time machine backup. Any files on that drive won't be backed up against failure of said drive.
If you still want to have time machine and file storage on the same drive. You definitely want partitions. Otherwise Time Machine backups will keep growing until they fill the drive. Generally, the time machine backup partition should be double the capacity of the drives being backed up..