How many direct reports should each manager have? When this question comes up in business it is referred to as the span of control. It is a crucial factor that determines how effectively managers can oversee their teams.
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Whether you're a small business owner or a leader in a large corporation, understanding and optimizing your span of control is important for improving efficiency, reducing managerial stress, and ensuring that employees receive the guidance they need to succeed.
In this guide, we will explore the following topics:
Span of control refers to the number of employees that a manager is responsible for overseeing. It plays a significant role in determining how well an organization functions, and impacts communication, decision-making, and the ability to respond to change.
A narrow span of control means that a manager oversees only a few direct reports, allowing for more personalized supervision and greater focus on individual performance. In comparison. a wide span of control means that a manager oversees many employees, which can increase efficiency but may lead to reduced direct attention for each team member.
The optimal span of control varies depending on the nature of the work being performed, organization size, and leadership style. Having the right balance of managers to direct reports is important for achieving optimal productivity while ensuring that employees have the support and direction they need.
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Several factors will impact the ideal span of control for your organization. Understanding these factors is essential for determining the right number of direct reports for each manager. Let’s have a closer look at each of them:
In smaller organizations, it’s typical for managers to have a narrower span of control, as there are fewer layers of management. Meanwhile, in larger companies a wider span of control might be appropriate, especially if there are middle managers to support them.
The complexity and variety of tasks assigned to employees will influence the span of control. For example, complex tasks that require close supervision typically require a narrower span of control. In comparison, teams who perform simple or routine tasks will operate more effectively (and efficiently) with a wider span of control.
The use of technology to automate tasks and facilitate communication can expand the span of control. For example, Managers who leverage software (e.g. project management systems or collaboration platforms) are typically able to oversee more employees effectively. This is becoming an increasingly important part of managing teams efficiently.
A “hands-on” management style typically results in a narrower span of control. While a more trusting, leadership-by-example style can accommodate a broader span. In most organizations the management style comes from the top. This means that the c-suite must demonstrate the company management style based on the way that they manage their direct reports.
If your team is spread out geographically or works remotely it may be more challenging for a manager to oversee many employees. A narrower span may be needed to ensure consistent communication and coordination occurs to achieve the team’s objectives.
Here are three simple steps to measure and benchmark the span of control in your organization:
Start by calculating the span of control for each manager in your organization. The formula is as follows:
Span of Control = Number of Employees Managed by a Manager / Number of Managers
For example, if a manager oversees nine employees, their span of control is nine. If multiple managers oversee different teams, calculate the span of control for each and find the average across the organization.
You can do this team by team, at a function level, at each managerial level, or even at the total organization level (which is the formula shown above).
To compare your span of control with industry standards, you can use third-party benchmarking data, industry reports, or insights from consulting firms that specialize in organizational design. This data will provide you with a range of acceptable spans of control based on the size, complexity, and nature of your business.
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Keep in mind that industry benchmarks can vary by sector, size and geography. For example, a technology company in the USA may have wider spans of control due to the availability of advanced tools combined with expensive onshore labor. In comparison, healthcare organizations in the UK may require a narrower span because of the complexity of their operations and government regulations. Make sure you spend time finding benchmarks that are relevant to your organization.
Compare your organization's span of control with the benchmark data gathered. For example, if your span is significantly lower than the industry average based on your company size, this could indicate a value creation opportunity. It suggests that you have too many managers, which is resulting in unnecessary organizational costs.
On the other side, if your managers are overseeing more employees than the industry standard, they may be stretched thin and unable to focus on higher-level strategic tasks. This could be hurting your business productivity and quality of work. It may require the hiring of additional managers to lighten the load on existing managers.
Benchmarking data can be a powerful tool to help optimize your span of control. But how do I unlock the opportunity identified from benchmark insights?
Here are four actions that you can consider implementing:
If your benchmarking analysis reveals that your span of control is too wide, restructuring teams into smaller, more manageable units can help. Consider assigning sub-teams within departments or creating new leadership roles to ensure each manager can give adequate attention to their direct reports. Equally, if teams appear to be too narrow, it may be an opportunity to streamline middle-management in your organization via a reduction in force programme.
For organizations with a narrow span of control, investing in leadership development programs can help prepare employees for management roles. This can help reduce the need for a high number of managers and encourage a culture of internal growth. Consider bringing in leadership consultants to build out a programme that is tailored to your organization.
Use technology and management tools to automate routine tasks and facilitate better communication between managers and employees. Project management platforms, customer relationship management (‘CRM’) tools, and messaging software can help managers handle a larger span of control without sacrificing performance.
If you have a wide span of control across your organization, consider giving employees more autonomy in their roles. When employees are more self-sufficient, managers can oversee a larger number of people without compromising quality. This initiative is usually led by the Learning and Development team (or HR person for smaller organizations). It can take time to bear fruit, but stick with it and your organization will get to the optimal span of control over time.
Organizational needs evolve over time, so regularly benchmarking your span of control is important. We recommend that you periodically reassess your management structure to ensure that it remains aligned with your company's goals, growth, and industry trends.
Benchmarking the span of control helps organizations understand how their current manager to staff ratio compares to industry standards and best practices. Here are some of the key reasons why benchmarking your span of control is valuable:
An ideal span of control helps balance workload and promotes better decision-making. With the right number of employees reporting to a manager, organizations can improve efficiency, reduce bottlenecks, and increase overall productivity.
Managers with an appropriate span of control can devote more time to coaching, mentoring, and motivating their team members. This typically leads to an increase in all the good people stuff - Higher employee engagement, satisfaction, and retention.
As organizations grow and change, it’s crucial to periodically benchmark span of control to ensure the management structure remains efficient. Benchmarking allows you to scale effectively while maintaining oversight and operational efficiency.
Benchmarking ensures that your organization is in line with industry standards and best practices, allowing you to remain competitive in attracting and retaining top talent.
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Benchmarking your span of control will help to confirm whether your organization is operating efficiently and effectively. The ideal span will vary depending on your organization’s size, complexity, and goals. By regularly measuring and benchmarking your span of control, you can ensure that your company’s leadership structure adapts to changing needs and continues to drive success.
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