Company Restructurings Squeeze Middle Managers; More to Come

As organizational structures continue to flatten, middle managers increasingly are being spread thin. And managers stressed over the growing number of employees they’re responsible for should brace themselves for more of the same. The numbers will probably continue to grow, leading to increased disengagement and burnout, according to research released Sept. 23, 2010, by the Institute for Corporate Productivity (i4cp).

During the economic downturn, companies increasingly have tried to become more efficient by expanding spans of control or the number of direct reports a manager or supervisor has.

“Companies are trying to get flatter and to reduce their number of management levels, but [they] are expanding these spans of control every time [they] flatten the organization,” said David Wentworth, i4cp senior research analyst. “Not only have these spans of control been getting wider over the last five years, but it appears that they will continue to get even wider in the near future.”

But flatter organizations don’t necessarily mean more competitive organizations, said Wentworth. There are some advantages to such restructuring, but companies looking to further flatten their organizational chart should carefully weigh efficiency and agility gains against the potential for managerial disengagement and burnout.

“There wasn’t a big difference and there wasn’t a lot of separation between the two,” Wentworth said of the high- and low-performing companies.

Forced vs. Planned Restructuring

The study, Organizational Structure and Spans of Control, includes data from 260 respondents, most of whom were HR professionals at the director or manager level, representing a wide range of industries. It was conducted at the request of i4cp’s membership. This marks the first time that the St. Petersburg, Fla.-based workforce and HR productivity research firm has looked at spans of control.

During good times, flattening an organization can have upsides, Wentworth noted, because “any time you can remove some bureaucratic layers between the leadership team and the people executing, you’re better off—and that’s the whole idea behind flattening the organizational structure.”

But “forced flattening coming from what’s happening with the economy may not bring the same benefits of a planned flattening, and there are all kinds of good reasons why not,” Wentworth said. “When there is this sort of wholesale culling of the employee population, it’s probably a lot harder to realize those attributes.”

Middle Managers Hit on Both Sides

The study looked at the average number of vice presidents, directors and managers based on organization size, as well as the median spans of control for each of those management layers. Leaders at all levels have larger teams than five years ago, and many said they expect that the number of reporting employees will increase, notes the study. More than 35 percent of managers at large companies already have 11 to 25 employees reporting to them; 75 percent of companies surveyed said they expect those numbers to rise or remain the same in the future.

Wentworth noted that middle managers often are hardest hit, because expanding spans of control at multiple levels of an organization increases exponentially the number of people for whom they’re accountable directly and indirectly. Researchers use the term middle managers to describe “anyone who both manages people and is managed by someone,” Wentworth noted.

Wentworth pointed out that a 2009 McKinsey report found that middle managers reported “dramatically lower levels of contentment than their more-senior colleagues do, as well as less of a desire to stay with their current employers.”

While the two studies were unrelated, Wentworth said that because McKinsey found “this lower level of contentment at the same time we’re talking about companies flattening, you can see how those things would go hand in hand.”

Pamela Babcock is a freelance writer based in the New York City area.