There's a way of thinking in the business world that suggests the average person is capable of managing seven people, give or take a couple. That means the perfect number is allegedly between five and nine.
Image by Joseph Mucira from Pixabay
We have psychologist George Miller to thank for this. He theorized that adults can retain seven plus or minus two items in their short-term memory at one time.
Stanford University professor Robert Sutton says eight or fewer people in a meeting is ideal because it gives everyone a chance to participate without feeling left out or guarded.
But does one size really fit all in the business world? Not necessarily. There are many other variables that can have a huge impact on how many people one can manage effectively.
Size of the Business
The size of the business or organization may play a role in the number of employees a person must manage. Naturally, a larger business tends to have fewer managers and more direct reports, while a smaller one will have a smaller ratio.
Pace of the Industry
The industry itself can play a role too. In more complex fields with constant changes — thank technology or medical research — people typically manage fewer employees. More predictable industries, like food or textiles, may have more employees per manager because the environment is fairly stable all the time.
Complexity of the Job
The stability of the job itself can also play a role in how many people a manager may supervise. If the work is easy and routine with few changes, you may see someone managing dozens of people at once. Jobs that are more complex often require more attention and decision-making from management, so a smaller manager-to-employee ratio works best.
Need for Precision
Precision is important to almost all businesses in all industries, but some require more accuracy than others. If you work for an accounting firm, one small mistake on a tax return can have huge consequences. If you work in a diner and don't put enough salt in the potatoes, it's possible no one will even notice. If more precision is required, a manager should typically have fewer direct reports.
Company Culture
Sometimes, it just comes down to the company's culture. If your business is relaxed and laid-back, your employee-to-manager ratio can be on the larger side. A more formal environment may have a smaller and more structured span of control.
Technology Usage
The technology — and the access to that technology — that we have available to us today wasn't around in the 1950s when Miller chose seven as the magic number for memory. If it had been, it's possible he would have wanted to take a deeper look into how technology is changing memory. By simply carrying a smartphone everywhere we go, we have instant access to details that we don't have to memorize. This could expand the ideal manager to employee ratio, particularly in a world where remote work is becoming the norm rather than the exception. Instead of time-consuming face-to-face meetings, we're using apps, spreadsheets, and software to exchange ideas and share information.
Managerial Experience
Of course, the manager's own personal experience and skillset play a role in how many people they can oversee effectively. If you've been working as a manager at the same job for 20 years, you can probably handle more direct reports than someone who is new to the industry or just promoted to a managerial position.
Employee Experience
The same is true for employees. Those with more experience and advanced skills require less supervision than those who are new to the job in most cases.
Manager-Employee Interaction Requirements
There is also much to be said for how much managers and employees must interact on a weekly basis. If employees perform routine actions and only call their managers when they have a problem, a larger manager-to-employee ratio is a possibility. If you have to meet regularly or perform weekly evaluations, you must figure out how many people you can interact with during your 40-hour week and continue keeping up with your other tasks. Stanford University professor Robert Sutton says eight or fewer people in a meeting is ideal because it gives everyone a chance to participate without feeling left out or guarded. So, if you have to meet with your employees weekly or even daily, seven plus or minus two may work for you after all.