An HR’s Guide to Calculating Span of Control
The span of control is a vital consideration in designing an organizational structure. Simply put, It’s the number of direct reports a manager has, and it can affect the productivity and efficiency of your team. This guide will teach you everything you need to know about calculating span of control and analyzing its impact on your company.
We’ll also cover why managers need to know their span of control ratio, how this ratio impacts organizational design decisions, the common factors that affect the span of control ratios, and much more!
What is span of control?
The span of control (also referred to as the span of management) is a calculation that assists HR in determining the number of employees reporting directly to a manager. It’s a significant health and safety tool for HR within an organization to determine how many reports a manager has and whether HR needs to start a recruitment process to either hire more managers or more employees for their team.
For instance, if the span of control is too large, then there may not be enough staff to complete all the necessary tasks. Some employees will be overworked and stressed out if it’s too small. HR can assist managers to find a balance between too many and too few direct reports by optimizing the team size. This can be difficult if the span of control is constantly changing due to business conditions or changes in staffing levels.
While the number of direct reports is essential, it’s not the only factor in determining how well a manager can oversee their team. The quality of the employee-manager relationship is also crucial. If the manager’s span of control is not optimum, then this can lead to a lack of delegation, micromanagement, and miscommunication. In turn, these issues could result in a lack of productivity and frustration by both managers and team members.
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By determining the optimum span of control for a team with the skills and needs of the employees, HR can ensure that the team connects efficiently and can work together to produce results.
Importance of calculating span of control
What does your organization’s current reporting structure look like? Do your managers have too many reports, aren’t delegating effectively or have too few direct reports? What about your employees? Are they well-supported by managers, work autonomously, or require more hands-on management?
The decisions HR and the leadership make regarding the various levels of reporting can impact productivity, efficiency, and job satisfaction across your organization. By calculating the span of control you can determine whether your managers can effectively supervise their direct reports and whether their team is too large or small to manage efficiently.
Too many employees reporting to one manager may signal that it is time to appoint another manager. If there are too few employees, you may need to assist your managers in reorganizing their team or hiring more people to get the job done. There are also additional factors to consider in designing the optimum span of control across your organization which we will unpack further in this article.
How can you calculate the span of control ratio?
There are many ways to calculate the span of control ratio. The most common way is to divide the number of direct reports by the number of managers. The span of control is a simple calculation that centers around the size of a team and its manager.
The span of control formula:
Span Of Control = Number Of Employees / Number Of Managers
This is the norm for simple organizations with one-level-deep hierarchies. For example, if you work in a company with 50 workers and five managers, your calculations would look like this:
Span of Control (50 / 5) = 10:1
The span of control formula for sub-teams:
This equation provides more granular detail by factoring in sub-teams controlled by team leads or supervisors:
Span Of Control = Number Of Employees / Number Of Team Leaders + Number Of Managers + Number Of Supervisors
These equations calculate the span of control on a single level. In other words, they calculate how many teams (or employees) each manager can effectively supervise.
Calculating the span across multiple levels in a hierarchy gets more complicated. You would need to consider the span of control of all managers below you, plus the number of employees in each team or department. This would allow you to calculate how many units (or employees) each manager can effectively supervise at any given time.
If your business is smaller, it may be sufficient to calculate the average span of control across the entire company. For larger organizations, it will be more beneficial for HR to calculate the span on a more granular level, such as per department (e.g. sales and marketing).
What is a span of control analysis?
A span of control analysis helps companies improve efficiency. The analysis involves determining the optimal number of employees who can report directly to a manager. This is also known as the “ideal span of control” or “maximum efficient span of control.” In other words, the span of control analysis helps to determine how many people should report directly to a manager. This number will vary from business to business and industry to industry.
For example, the average span of control for a sales team could be 10 salespeople per manager. But an ICT organization selling complex and custom solutions to large B2B companies may require each sales manager to supervise 6-8 business account managers. A retail organization with multiple branches may require a branch manager to supervise 6-15 employees.
What to consider when analyzing the span of control
There are several factors to consider when conducting a span of control analysis, including:
- Accurate data – You need factual data about your team structures and managers to calculate correctly. This includes knowing how many employees will report directly or indirectly under a manager, what positions they hold, whether they work in one location or across multiple offices, etc. If any information is missing, then the calculation may not be valid.
- Your business’s size – This will determine the number of employees that report to each manager. The larger the company, the more likely it is that there will be multiple layers of management and many employees reporting to each manager. The number of employees reporting to your managers will be higher than that of a company with fewer employees.
- The type of business – Some companies have more complex structures than others. Ensure that you can accurately calculate the number of employees who report directly or indirectly under a manager for any business.
The more specialized your business is, the more likely there will be a more complex structure. It will be more complex for a company in, say, the software development industry with various teams of developers to calculate direct and indirect reports than a plumbing company with only one team.
Common factors affecting span of control
Several factors affect the number of people who report directly or indirectly to a manager. These factors include:
1. The complexity of your organizational structure
If you have a flat, horizontal structure with little hierarchy, there may be no need for managers to delegate work to others. However, if a company is more complex with multiple levels of hierarchy, then your managers will need to delegate work.
2. The skill level across your workforce
A workforce with experienced individual contributors may be able to handle tasks independently without needing much oversight from their manager.
3. Geographical dispersion
Teams spread across multiple locations make it challenging for managers to communicate in real time with their employees. The best solution will depend on what’s working and where improvement opportunities exist within the team environment and corporate culture. Consider the pros and cons of each option before deciding so that you can determine what the ideal span of control could be.
4. The company culture
The company culture will also play a role in determining the span of control A company that embraces a democratic leadership style will be more suited to a wide span of control where employees can express their creativity or have more autonomy. In contrast, an autocratic leadership style that prefers managers to closely supervise staff will result in a narrow span of control.
One report into the span of control benchmarks found that a company culture where executives have many direct reports resulted in increased direct reports in the lower layers of the organization as well. This indicates how the management philosophy can implicitly impact the entire organization.
5. Aligning with the business strategy
When determining the span of control, HR should also consider the organization’s strategic goals. For example, changing the managers’ span of control from narrow to wide could lead to loss of productivity or employee engagement. This could have knock-on consequences for business profitability. On the other hand, a span of control that is too narrow could result in additional organizational complexity. This could negatively impact decision-making and lead to a loss in efficiencies.
Designing the spans of control for your organization
To design spans of control that are fit-for-purpose for your organization, consider how to optimize the managerial spans specific to your organization. In order to successfully do this, HR must first understand the complexity of the work conducted by managers and their teams. Five managerial archetypes were created to assist in identifying the common types of managerial work carried out. These include:
- Facilitator, and;
Utilizing and identifying these archetypes across your organization will assist you in identifying the right spans of control for your managers and their direct reports. Additionally, matching the delegation strategy to personality type will assist you in designing the optimum span of control.
For example, a manager who is more comfortable with direct reports rather than indirect reports would delegate tasks face-to-face. The same is true for managers who need to be more involved in their direct reports’ day-to-day work.
Calculating the span of control can help identify how much delegation is needed at each level within the organization. If your managerial span of control is greater than six, you may want to consider delegating more tasks to employees at each level. If your managerial span of control is less than three, it may not be in your best interests to delegate tasks to others.
It’s important to remember that delegation is an ongoing process. If you’re experiencing difficulty delegating tasks effectively, it may be due to a lack of training or knowledge. Or perhaps your employees aren’t ready for additional responsibility yet. You may consider retraining or mentoring your employees before delegating other tasks. If you still have difficulty after training, reviewing your job descriptions and expectations may be time.
A final word
Achieving a high level of organizational effectiveness is essential to any organization’s thriving ability. One way organizations can achieve this is by implementing an effective span of the control system. A well-designed span of control system helps organizations achieve a high level of organizational effectiveness. This ensures that managers have the correct number of direct reports.
However, a company must first understand what constitutes an optimal span of the control structure and how to match delegation strategy to personality type. Understanding the span of control is helpful for HR professionals, as it helps them shape the organizational structure, do headcount planning and create adequate management layers. That way, employees and managers can thrive, and organizational performance improves.