Optimize spans and layers to increase organizational efficiency

Brad PetersonUncategorized1 Comment

A significant challenge faced by CHROs, especially those from large and rapidly growing organizations, is managing spans of control and management layers. Spans and layers differ from one organization to another, and from one division to another, but the principles essentially remain the same for effective communication and efficient business processes.

As a reminder, the span of control is the number of direct reports to any given manager. Layers are the number of reporting levels from top to bottom at any given part of the organization. The wider the spans of control become, the atter the organization. This increases the time managers spend managing their subordinates and decreases their time available for achieving organizational goals. The narrower the spans of control become, the deeper the organization (more reporting levels) which adds to the communication layers between the top and bottom of an organization and leads to delayed decision making. On aggregate, too small or too large a span of control can lead to signifiant inefficiencies in your organization. But what span of control is best?

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Manger types are important
The optimal span of control depends on a number of factors that are speci c to your industry and the managers job pro le. Some organizations determine a maximum threshold for both spans
and layers. This may be 8×8, or 10×7 for example (span of control not to exceed 10, and levels not to exceed 7). While this can be a useful yard stick, a single organization prescription fails to recognize the many different types of managerial activity that takes place in an organization. Treating the organization as a single monolithic collection of worker bees is not that useful and can lead to inef cient organizational design.

When conducting spans and layers analysis, it important to go deeper and speci cally look at groups of managers and their role in the organization. For example, the optimal span of control for a line manger in a manufacturing context will likely be signi cantly higher than that of a manager in a nance function. Managers in some types manufacturing can have over 100 direct subordinates, which appropriate for an assembly line, not so much for the accounting department.

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The same can be said for managers in different levels in the organization, as well as their geography and other groupings. The optimum span of control for the same type of retail manager in France may be signi cantly different than in the US. It is therefor important to choose a workforce analytics application that allows for easy segmentation of manager types along any number of attributes to understand that varied nature of managers in your organization and the spans of control that are most appropriate.

Change – It happens!
Optimizing span of control for each manager type, and the layers
of your organization can lead to better organizational productivity. However nothing is static and your organization is sure to change with time. Optimal is an endlessly moving target. From a workforce planning and org design perspective, spans and layer analysis should become a routine exercise and this can only be done with tools that simplify the collection and analysis.

OrgInsight for organizational planning
OrgInsight by Macromicro was built from the ground up to facilitate spans an layers analysis and the workforce analytics. The application creates an organizational map of an entire organization. This is done through core HR data, and speci cally line manager reporting relationships. The end result is a hierarchy of any entire organization displaying the reporting relationship between every member. As span of control and management layers are an inherent part of reporting relationships, the tool provides an immediate view into the distribution of each across an entire organization.

With visual workforce analytics tools from Macromicro, CHROs and those in HR analytics can analyze the spans and layers in their organization and make optimal adjustments.

OrgInsight can be used to further your workforce analytic solutions. It is hosted securely in the cloud by the SAP HANA Cloud Platform, and is vendor agnostic (SuccessFactors, SAP HCM, Workday, PeopleFluent etc.).

One Comment on “Optimize spans and layers to increase organizational efficiency”

  1. Jorge Oria_y_Barros

    Very interesting tool to provide means of optimizing the span of control for each manager type, and to also of optimizing the layers of any organization. The quest for better organizational productivity is a significantly difficult one, specially in the current times where everything changes in very short periods of time. The kind of conclusions that those using this OrgInsight tool should arrive to may become a critical survival tool for large organizations, anticipating events and enabling well-planned corrective actions. I can see this happening in very large organizations, but what about the core of entrepreneurial spirit and small-to-middle-sized organizations? In them the sole concept of span of control and layers may even be quite inadecuate as an approach to improving organizational productivity.
    I would hope to see some efforts by Macromicro in this regard. Let us wait for them to be visible.
    Jorge Oria_y_Barros
    JoyCorp Founder and CEO

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