Meta’s Layoffs Raise Key Question: What Is the Optimal Number of Direct Reports?

The company recently announced plans to flatten its structure by reducing the number of managers. But how many managers is too many? How many is too few?

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Mar 21, 2023

Meta is one of many tech companies that have had large layoffs in 2023, but unlike various other companies, there’s been one big difference in the social-media giant’s case: Meta has announced that the layoff is not just to cut the fat but to make the organization flatter.

Mark Zuckerberg announced, in an internal memo, plans to remove the number of layers and, in doing so, managers would see an increase in their direct reports, with a maximum of 10 direct reports.

Which raises the questions: How does this affect talent acquisition, and what can recruiters do to help flatter organizations hire smarter?

A (Somewhat) Elusive Number

When it comes to determining how many direct reports a manager should ideally, haven, there will never be one answer for all industries, departments, and leaders. Still, historically, researchers found that five to seven direct reports were optimal. What’s more, by 2012, Harvard Business Review was touting the advantages of having CEOs with larger numbers of direct reports to gain more knowledge about the business as a whole. By leaving out middle managers CEOs would have a better grasp on their company’s operations.

More recently, researchers found that the optimal number of direct reports rests more on the individual manager’s style rather than an optimal industry number. McKinsey, for instance, found that “player/coach”-type managers had an optimal number of three to five direct reports, while “facilitator”-style managers could optimally manage 11 to 15 workers.

Dorothy Dalton, founder 3Plus International, says it’s not just the management type but the work type that matters. “At one time, the ideal number of reports —span of control — used to be considered six to eight, but the number of direct reports a person can successfully manage will depend on the type of organization, the complexity of the tasks, and the level of individual autonomy given to each employee.”

Moreover, while CEOs view the business as a whole, individual managers do not. Dalton predicts increasing the number of direct reports at a company could lead to some negative impacts, as managers will have to focus all their efforts on the people rather than the work content.

Sarah White, founder of strategy and analyst firm Aspect43, agrees there is more to it than management styles. The type of work matters a great deal. “The ideal manager-to-employee ratio depends a lot on what else is expected of that manager. For some roles, anything more than four to five direct reports will prove challenging because managers have a number or responsibilities of their own they have to complete.”

White adds that as you increase the number of direct reports, you’ll need managers who focus more on “development, guidance, and support of the team.”

Nonetheless, White adds: “I rarely see someone successfully managing more than ten without leads or supervisors involved.”

Avoiding the Peter Principle

If Meta, or any organization, wants a flatter organization that has managers who manage larger groups of people, finding the right managers becomes even more critical. TA specialists have to look for managers who can truly manage, not just people who have risen through the ranks.

This concept traces back to Dr. Laurence J. Peter’s 1968 book titled The Peter Principle, where he posits that people are promoted based on how well they do their current job, but that doesn’t mean they have the skills for their new, elevated role.

“For example,” Peter writes, “an employee who is very good at following rules or company policies may be promoted into the position of creating rules or policies, despite the fact that being a good rule follower does not mean that an individual is well-suited to be a good rule creator.”

Because managing up to 10 people is substantially different from doing the job or managing two to three employees, recruiters need to look for people with management skills, not just “doing” abilities.

Meg Martin, an HR consultant, says that recruiting professionals need to assess people’s potential to lead a team successfully. “Managers don’t just give orders and make decisions; they must inspire and empower their direct reports to work toward common goals. Effective managers will be articulate communicators, savvy delegators, and efficient time managers.“

These things must be spelled out in job descriptions and looked for in the interview. Martin suggests, “Instead of asking, ‘Are you comfortable leading a team,’ try asking, “Tell me about a successful project you led and how you motivated your team to achieve their goals.” The answer should reveal clues based on actual events that will help assess the candidate’s potential to be an effective manager.”

Executive coach Amber Waugaman sees another skill that large group managers need: delegation. “What I see a lot from my middle-manager clients is that they have trouble delegating more, and they aren’t realistic about the time in their own schedule for 1:1s and the appropriate support and training their team needs. And many of them believe they have to be the expert in all areas — burnout city.”

In other words, there are a lot of things to think about when changing from a very hierarchical organization where managers have a few direct reports and there are many layers, to one where there are fewer managers with more direct reports. Recruiters will have to search proactively for people who can handle a larger number of direct reports. They will also have to work to ensure that job descriptions differ from previous ones, as the responsibilities will change drastically.

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