HR professionals and business leaders are always interested in boosting organisational efficiency, raising employee satisfaction levels and ensuring the makeup of the workforce supports the company’s bottom line. It’s therefore vital to be aware of your organisation’s span of control, understand what it means and realise the scale of its impact. In this article, we’ll cover the basics around span of control and show you why it’s such an essential workforce metric.
span of control definition
Span of control is a term that refers to the number of direct reports a manager is responsible for within a company. The more regular employees that directly report to a single manager, the wider the span of control.
how is span of control calculated?
Determining the span of control (sometimes called span of management) across an entire organisation or just within a single department is easy. You simply divide the number of employees by the number of managers, ending up with a single number that can also be expressed as a ratio.
For example, in a large company with 300 employees and 25 managers, we divide 300 by 25 — getting a span of control of 12, which we can also represent as 12:1, or 12 employees for every manager.
When doing this calculation for a large organisation, the span of control figure is an average. Naturally, some teams within the company will have a narrower span of control (a smaller ratio of employees or managers) or a wider one (a larger employee/manager ratio). Spans of control vary significantly across industries as well. However, it still provides a reliable, simple indication of a company’s organisational structure and the amount of managers involved in everyday business decisions.
why span of control is important
Although it’s a fairly basic detail about your organisation’s structure, span of control has a huge effect across the company. It impacts everything from the employee experience to your bottom line, and much more.
Imagine you’re a tech company with a rapidly expanding workforce. As teams grow to keep up with business demands, potentially making the span of control too wide. Similarly, a downturn could force you to reduce your headcount, which risks creating a span of control that is too narrow. In this situation, optimising the span of control can help you boost efficiency, reduce costs and ensure everyone is working effectively.
Let’s take a look at some of the key reasons why span of control is an important metric — and why it’s worth taking the time to do a span of control analysis and decide if yours is really working for your company.
it has a significant cost impact
This is one of the most common reasons companies decide to optimise their span of control. Managers typically have a higher salary than the direct reports that they manage, so having a higher proportion of managers in relation to staff usually leads to an increased wage bill for the company. According to McKinsey, companies that take charge of their span of control and reduce it to a more suitable size typically see a 10 to 15 percent reduction in managerial costs.
it can boost efficiency
Optimising your span of control can impact your bottom line in other ways. For example, companies with a very narrow span of control are typically characterised by multiple layers of management between the CEO and frontline staff. This isn’t always a bad thing, but when left uncontrolled, it can lead to too many layers of management, growth in ineffective processes and extremely long decision paths. If left unchecked, a company can become paralysed as the employees spend most of their day navigating the organisational hierarchy instead of doing productive work. On the other hand, employees in companies with excessively wide spans of control and a flat organisational structure can struggle to get hold of their boss when important decisions need to be made, slowing down operations. Reaching the sweet spot in the employee to manager ratio keeps things running smoothly.
it’s a major part of employee satisfaction
Span of control affects the employee experience in more ways than one. A very narrow span of control can make an employee feel like their boss is always looking over their shoulder, while a very wide one can leave them feeling abandoned. Achieving a balanced span of control preserves employee autonomy while providing support and satisfaction. However, it also plays a role in learning and development (L&D), an increasingly important benefit for workers — figures from LinkedIn show 94% would be more likely to stay at a job if it offered L&D opportunities, while our Workmonitor survey found 24% would even consider quitting a job that didn’t provide adequate L&D.
When it comes to establishing an effective L&D programme in the workplace, management must be in the driving seat. But when managers are overworked by a span of control that’s too wide, they struggle to track employee performance and plan L&D properly.
In a time when qualified labour is in short supply, businesses can’t afford to ruin their employee experience and retention figures with an unoptimised span of control.
it can make your entire business more responsive
Fixing a span of control that is too narrow can often eliminate one or two levels of hierarchy in a large organisation. Leaders at the top then become closer to the employees at the bottom — potentially putting them closer to the front line and to the customers that keep the company going. This helps leaders gain a more accurate picture of the company’s operations, and could make the entire organisation responsive to the shifting needs of customers. When this is combined with efficiency gains from an optimised span of control, a company that succeeds in shifting towards its ideal structure will find itself in a much better position.
support your shift to an ideal span of control
If you want to get going with your span of control optimisation journey, we’ve created some visual resources to help you on your way. They clearly illustrate concepts like wide and narrow spans of control, explain how they are calculated, and provide insights into the risks and benefits linked to span of control. All the resources are in slide format, so you can easily add them into your own presentation and adapt them to your company’s brand. As you start reorganising the company hierarchy, they will help you explain the core ideas and benefits to vital decision-makers in your organisation.
