How to determine the optimal ‘spans of control’ for your organisation

Identify the right spans of control for your organisation

Determining the optimal ‘spans of control’ is crucial for maximising organisational effectiveness. This article explores how the ideal number of direct reports for managers varies based on factors like company culture, work complexity, and desired outcomes. It also offers best practices, potential pitfalls to avoid, and insights into customised span analysis.

Reading time: 5 minutes

At Q5, we are often asked, “what spans of control should we have to maximise the effectiveness of our organisation?” Unfortunately, the answer isn’t so simple, meaning our response will almost always be “it depends.”

While best practices and rules of thumb exist, the ‘optimal’ number for your organisation will depend on various factors, ranging from your culture to the complexity of work being done.
Your ‘optimal’ number will also depend on your desired outcomes. Many organisations look to improve their effectiveness and efficiency, while others prioritise cost reduction by reducing their manager to employee ratio.

In this article, we delve into the effects of different spans of control, highlight potential pitfalls to avoid, and share best practices along with the strategies we employ at Q5.

What are spans of control?

When we talk about spans of control, we are referring to the number of direct reports a manager oversees. A “narrow” or “low” span of control indicates that a manager oversees fewer employees, while a “wide” or “high” span of control describes a manager overseeing a larger number of employees.

We also use the term “layers”, which is the number of managerial levels there are between the CEO and the most junior employee in the organisation.

Why is a spans and layers analysis important?

At Q5, we assess spans of control and layers in most organisations we work with. They are an important consideration in organisation design as they impact the level of hierarchy, autonomy, accountability, communication, and efficiency within teams and the whole organisation. Organisations must weigh up the trade-offs between having wide or narrow spans of control, and match this to their vision.

An organisation with wider spans of control can:

• Encourage autonomy, as managers must delegate work and encourage their direct reports to take on responsibility.
• Improve communication and idea flow, by minimising distance between lower-level employees and senior managers.
• Accelerate decision-making, as there are fewer layers for decisions to travel through before being made.
• Reduce cost, by having fewer managers, who will usually have higher salaries.

Whereas an organisation with narrower spans of control can:

• Encourage close and collaborative teams, as teams can spend more time with each other and with their manager.
• Minimise managerial burden, as managers will have fewer direct reports to check in with, delegate to, and supervise.
• Benefit development and career pathways, as reports experience closer management supervision, and there are more people management positions that provide promotion opportunities.

What to avoid when looking at spans of control?

While both wide and narrow spans of control are acceptable depending on your organisation’s context and ambitions, there are some red flags to avoid.

1. 1-to-1 reporting, where a manager has only one direct report, generally leads to:
   • Reduced information flow and siloed working
   • Duplication of work due to no cross-team oversight
   • Limited capacity to cover for individuals while they’re sick or on annual leave
   • Micromanagement
2. Analysing spans and layers using a single perspective for the entire organisation
   Instead, we recommend evaluating teams and functions as distinct entities, each with different requirements from their managers and specific ways of working.
   Most notably, the size of the function and teams, in addition to the nature of the work being done, should be considered while looking at spans of control.
   For instance, a logistics function with 4,000 employees might justify having seven or eight layers and wide spans of control, whereas a Finance function in the same organisation, which has 50-100 employees, should not adopt the same principles.
   These functions perform different types of work, vary significantly in size, and likely have different requirements from their people managers, so they should be analysed separately to determine the optimal span of control.

An example spans and layers analysis based on a holistic view of the whole organisation may look like this…

Whereas, if you split the two functions out separately, they would look like this…

What is span of control best practice?

Unfortunately, there is no ‘one-size-fits-all’ answer to identifying the right spans of control, but there are some general principles to follow at an organisational level:

• Neither small spans (e.g. 2 or 3 employees) nor large spans (e.g. more than 20 employees) are usually efficient.
• Properly loaded managers (with a span of around 8) recognise that line management is the essence of their role and dedicate the appropriate time and energy to it.

Nevertheless, there are exceptions to these principles. Factors such as your company’s culture, current managerial capability and desired ways of working may impact your optimal span of control. For example, organisations that want to empower their employees and increase the speed of decision-making may opt to have wider spans of control to facilitate this.

Whereas, at a team level, it is important to consider:

• The nature of the work being done and level of specialism
• The way the work will get done
• The expected role of the manager

The spans of control highlighted in the diagram below serve as general guidelines for three common manager archetypes, based on the type of work being performed by their team.

Nevertheless, no matter whether you are assessing your whole organisation, a function or a specific team, it’s important to consider what your priorities are. Organisations focused on cost reduction often have unrealised savings by having excess managers and spans of control that are too narrow.

As an example, we often see organisations with >9 layers and average spans of control of <4. In such cases, there are clear opportunities to increase spans of control and reassess the amount of people managers there are in the organisation, which can reveal potential cost savings.

How can we help you?

At Q5, we support our clients use their data to inform their organisation design, working alongside our award-winning “Metro Map” methodology.

Our proprietary tool, OrgMaps, quickly transforms HR data into organisational insights, including spans of control and layers, which can be cut by team, function, or geography to provide a comprehensive understanding of every aspect of your business.

Click here to find out more about what OrgMaps can do.

Or book an OrgMaps demo here.