Average Team Size Trends: Our Research Findings

Cognology data is a rich source of information about what’s really happening in the workplace

We have over 250 companies in Australia and New Zealand using Cognology talent management software. This gives us a rich source of data on the underlying trends in talent and performance management across the Australian workforce.

Whilst there’s a lot of great opinion pieces and blogs about the changing workforce (we highlighted some of the best here), the discussion is often missing hard data about what’s really changing in the workforce. We’re aiming to change all that by jumping deep into our anonymised dataset on performance management.

I want to make it clear that we’re looking at this data on a completely anonymous basis. No clients or employees are ever identified by our research team. And we’ll only use sample sizes where there’s no potential for any company or individual to be identified.

We’re starting with span of control

In this article, we’re looking at the average span of control. From a personal perspective, managing a team has been one of the most complex and rewarding experiences of my working career. There’s no better feeling than being able to coordinate a team of people towards a shared goal, and seeing all that time and effort pay off. It’s immensely fulfilling, but it’s also an incredibly demanding task that’s hard to do well. And it gets harder the more employees you try and manage.

Since the GFC we’ve seen multiple large cuts to middle management. So I wanted to understand what impact these cuts have had on the average span of control. Are we seeing managers stretched further and further? Here’s what we found by analysing the data in a number of ways.

It’s clear that average team size is increasing

Teams are getting bigger. Over the past two years we’ve moved from the average manager being responsible for about 4.4 employees to 4.9. This increase of half an employee per manager (on average) is a pretty substantial increase.

The interesting question to ponder is how is this increase is affecting managers and their employees. The good news is that we’ve looked hard and we’re not seeing any decrease in the quality or quantity of performance reviews as a result of this increase in responsibilities. This poses an interesting question: Is it just that managers are working harder, or are we also getting more effective at the same time?

What I think is a strong possibility here is that managers are becoming more efficient through better technology and collaboration. Social technology makes communication with employees easier than ever before. Feedback loops become tighter, employees can share feedback with each other, and knowledge has now become a shared resource. Combine this together and it becomes easier to measure the performance of each individual, making management more effective.

However we know that the capacity to manage well isn’t unlimited. And clearly this average hides some big variation in team size under the surface. There’s a bunch of managers with 1-2 direct reports. And then there’s also many with 10+ team sizes. And whilst we do see the occasional manager with 20+ employees in our dataset, thankfully they’re not that common.

Any one with direct management responsibility knows just how much time and effort it takes to manage employees well. Could you really expect a manager to properly measure the output of 30 employees? And I mean properly manage them; having the ongoing conversation, knowing the career aspirations, strengths, weaknesses, and driving the growth of 30 employees. You just don’t have enough time in the week to properly manage that many employees.

We know what’s happening to the average span of control, but what’s the right span of control?

I’ve always said that you should be able to make 45 minutes every day for each team member that you manage. It takes a lot of time to do people management well. You have to allow for this time commitment (as well as all your other responsibilities) when setting appropriate team sizes.

Here’s another perspective to take into consideration when thinking about the right span of control:

HBR on the average span of control for the C-level in the Fortune 500

What other workforce trends would you like us to explore?

We’re keen to dig into anonymised performance data in as many ways as we can. If you’ve got questions about the Australian workforce that you’d like to see us explore on this blog, please comment below or tweet to us via twitter @cognology.

In the case that we publish research based on your idea, we’ll look after you with some great prize packs featuring our selection of the best Management and HR books of 2014.