How Many Direct Reports Should a Manager Have?
In between getting their own work done, managers are responsible for leading and coaching their direct reports—the latter often being a full-time job in itself. So where’s the breaking point?
We took a closer look at the organizational structures of the 1,000+ mid-sized companies (and 150,000+ employees) that use Namely. We found that managers, on average, have nine direct reports. Our data appears to corroborate other studies on the subject, with a recent Deloitte survey noting that U.S. managers averaged 9.7 direct reports. At large enterprises, that number increased to 11.4.
While that sounds high, is there such a thing as a “sweet spot” when it comes to managing people? The answer to that question is a nuanced one.
Factors That Influence the Ideal Number of Direct Reports
A manager’s “span of control”—number of direct reports—has no defined or ideal vision to it. There are many factors that can influence the ideal number of direct reports that range from organizational structure (organizational demands) to managerial efficiency (individualized preference).
Here are just a few factors that can impact how an organization or manager may define their ideal number of direct reports.
- Organizational Structure. If you are a senior executive or above, your number of direct reports is likely going to be higher than a mid or senior-level manager simply because of your place in the company’s hierarchy. According to an Inc. article, flatter organizations (less hierarchy) typically have fewer direct reports than those with more hierarchy. Whereas larger organizations with greater hierarchy tend to be more formal and require more intermanagerial relations.
For example, the complexity of work being done can directly impact the ideal number of direct reports. A small business or call center may have a more autonomous operation that allows managers to manage more direct reports. Conversely, an enterprise-level or demanding industry might have more complex work demands that vary by project, client, or time frame. Additionally, a dynamic environment can influence the number of direct reports manageable by an individual. For instance, at a tech company that has new products launching each month or more frequently, having too many direct reports can overwhelm your best manager.
- Managerial Efficiency. The difference between a CEO and mid to senior-level manager is skills and experience. A seasoned CEO may be able to effectively manage many VPs, directors, and other senior-level managers because their deep industry knowledge and experience in different roles allows them to adapt. Whereas a mid to senior-level manager likely climbed the ranks through hard work and perseverance, but is still developing their skill sets and experience. A newer manager also likely hasn’t experienced the same wide range of situations as a seasoned CEO. Moreover, employee skills and experience can also impact managerial efficiency.
A manager who has to assist in supporting new or entry-level employees might not be able to take on the same amount of direct reports as a manager with more experienced employees. It’s important to consider individual managerial efficiency and how direct reports can be handled effectively without overwhelming your managers.
- Workload Analysis. Aligning span of control with workload analysis is critical, especially when considering the acceptable error rate. For example, a role or industry that requires immense attention to detail might suggest fewer direct reports for your managers to ensure quality control. Whereas a lower acceptable error rate may allow room for upskilling and reskilling, and essentially, a learning curve that can be adjusted as the workload or organization grows. Additionally, use of technology can help (or sometimes hinder) your operational workflow.
For a workforce that is tech savvy, using technology to streamline operations might open your managers to accept more direct reports. However, in some cases, an organization that is slow to upgrade their technology or perhaps is less inclined to use it might require managers to take on fewer direct reports.
Drawbacks of Having Too Many or Too Few Direct Reports
The ideal number of direct reports will continue to be a subject of fierce debate in the business community. That said, HR professionals should be skeptical of the “more is more” approach. Taking on an excessive number of direct reports invariably makes it more difficult for managers to follow through with time-consuming (albeit important) best practices like weekly one-on-ones and coaching sessions.
As a result, employee engagement can be negatively impacted and thus, having too many direct reports becomes a hindrance. Conversely, having too few direct reports can lead to micromanagement and other toxic behaviors.
For example, in the early 1990s, General Electric under then-CEO Jack Welch widened managers’ spans of control to 10-15 employees. Why? By requiring managers to take on such a daunting number of direct reports, it forced micromanagers to drop their tendencies and empowered individuals to act on their own. Managers were then able to focus on strategy and leadership, not the minutiae of day-to-day work.
At times, you might reasonably suspect that a manager is eager to take on additional reports because he or she thinks it’ll result in higher pay. Remind them that compensation decisions are based on the market rate of the job and factors like experience and performance. The notion that pay should closely correlate to an individual’s number of direct reports has fallen out of favor among HR and compensation professionals.
Methods to Determine the Ideal Number of Reports
As your company’s cultural steward, you’ll want to consider how span of control impacts all employees, not just managers. Scheduling weekly or bi-weekly 1:1 meetings of at least 30-45 minutes each is the general consensus for acceptable and expected communication between direct reports and managers. If driving engagement is one of your team’s priorities, those findings should lend even more credibility to the value of managers having fewer reports.
So how many direct reports should a manager have? Here are some tips on how you can determine the ideal number of reports.
- Assess Your Organization. The first step is understanding your organizational structure and how it functions. This includes looking at the size of your team, how many direct reports each manager has, and understanding every individual’s role in the organization.
- Evaluate Individual Skills and Responsibilities. As your company grows, you’ll need to evaluate individual skills and responsibilities to ensure you remain competitive. Consider experience levels, including the time, resources, and budget needed to support employee development. How many new, entry-level, or less experienced employees do you have compared to tenured, more experienced employees? Additionally, look at each role’s responsibilities. Do some roles require more attention than others? How does that impact direct reports?
- Define the Workplace Culture. Your workplace culture is likely going to influence how you approach delegating work and expectations. For example, a “get it done” approach might make for higher delegation, whereas a “teamwork makes the dream work” approach might make for a highly collaborative effort. Workplace culture sets the tone for acceptable working hours, quality output, productivity levels, and communication preferences, all of which can impact how your team functions and delivers.
- Consider Factors That Can Influence Your Number. Again, complexity of work can be indicative of the ideal number of direct reports. Other factors might include frequency of one-on-one meetings which are integral for managers and their direct reports to communicate important information, address any issues that may arise, and ensure employee growth. If the number of direct reports impacts the frequency or quality of these meetings, it can have a negative impact on employee engagement.
- Review the Budget. As with any great business strategy, it’s important to consider the budget. For example, if your managers are feeling overwhelmed and the organization is growing, reviewing the budget could likely help understand how you can allocate more resources to better support them. Whether that’s hiring more employees to support the team or investing in professional development, the budget plays a critical role in presenting a “business case” for your team.
The question of “how many direct reports should a manager have?” is not as straightforward as many employers might hope, it is crucial that it is constantly evaluated and revised as needed. Looking for a way to run regular reports on your managers? Check out Namely’s HR software that provides unlimited roles and permissions, custom workflows and approvals, configurable profile fields, and more.
See how Namely's flexible solution will help you streamline your HR processes by having your people, payroll, and benefits info all in on place.Get a demo
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