What Are the Right Spans and Layers For Your Organization?
Having access to your people data is a competitive advantage at any time, but having an accurate picture of your workforce is imperative to maintaining business and workforce productivity.
In a recent webinar, Visier’s Director of Product Marketing, Caitlin Bigsby, spoke with Catherine Garrett, SVP of HR Administrative Management at Comerica, about using a more thoughtful, data-driven approach for optimizing spans and layers.
From getting a trusted headcount number to predicting who will leave, their discussion makes it clear why people analytics is a powerful ally for HR today.
Finding the optimal span of control at Comerica
Comerica started their spans and layers analysis journey back in 2016. To ensure they maintained a new organizational structure, the C-suite requested reports on organizational health metrics such as manager ratios, player coaches, and organizational levels of span of control. Catherine told leadership that her team could only produce the report quarterly.
“It would take me about two weeks a quarter just to produce…all the individual reports,” Catherine explained on the webinar. “Because then, for any of you that have used Excel, you create a graph and it gets warped and it doesn’t look right..then [you’ve] got to go back and start all over again. And so it took us a couple of weeks a quarter.”
After implementing Visier, the reports became faster and easier to produce.
“I went from two weeks a quarter [to] about three hours,” said Catherine. “And I do it every month now…and that is all analysis versus all creations.”
With people analytics, Comerica was better able to keep track of their organization as a whole. For example, the data showed that 30% of their organization was in a management role. Leaders realized this number was much higher than they needed, so they set a goal to reduce that to where, instead, managers made up 15% of the organization.
Throughout the webinar, Catherine walked through the different analyses they used to:
- Dig deeper into why hundreds of managers were only managing one person (often another manager)–including filtering these groups by gender, minority group, and other values–find ways to reduce the layers of decision-making and empower more employees within the organization
- Drill into why diverse populations are leaving the organization and determine the best retention initiatives to put in place
- Optimize administrative assistant ratios after realizing one manager to one assistant wasn’t efficient; they’ve since found each assistant can support up to 10 managers
- Realize efficiencies and opportunities related to salary grades and promotions, optimal span of control for each line of business, and more.
Since implementing Visier, they’ve been able to cut costs in their organization and reduce the number of decision-making layers hindering efficiency. Now, Comerica is able to analyze the data instead of just producing it. They have more visibility to the problems they need to solve, which helps them make better business decisions more quickly. As the organization changes, Comerica can continue reviewing their data and make better business decisions.
Why should you optimize spans and layers?
There are many benefits to optimizing spans and layers. One of the key benefits is that it increases the ability for people to take action and make decisions on their own. By optimizing spans and layers, you become an organization that can work together more effectively while reducing costs.
Critical to this is creating the optimal structure where employees have enough support and guidance to operate well, while balancing this with a structure that promotes autonomy, empowered decision-making, and information sharing. This balance is what creates a highly functional organization.
“That’s also why it’s important to approach the optimization of spans and layers in such a way that you’re not just cutting at a numbers level–you’re actually looking at how the organization functions together,” advised Caitlin.
Furthermore, the approach to spans and layers has changed quite a bit over time. Early research into span of control estimated that the “magic number” was seven, but this approach is outdated and likely not suited to what your organization might need (as Merck KGaA discovered when they tried to match their span of control to global benchmarks).
It may be a futile effort to look at other organizations just like you and align to them. Finding the right spans and layers for your company means looking at the data and really understanding how your workforce is organized. Maybe even making changes to how you’re organized in order to optimize the span that works for your business that’s actually the right fit for you.
“You make decisions and then you have to go back and test those decisions,” said Catherine. “Sometimes you think you’ve set the right span and then you realize it’s not sustainable, or it’s not quite working the way you wanted it to work. So we had those exact conversations. And then even after we had made decisions, we went back and adjusted where we saw that the gaps still existed.”
Added Caitlin, “It’s not enough just to simply make the change. It’s [about making] sure it’s working and keeping it in place.”
How to identify the right spans and layers for your organization
There are a number of factors that should be taken into account when you’re considering the structure that you want to create. Use people analytics to dig into information on the following:
Types of work
The first step towards optimization is looking at the types of work your people are doing. If you find that many people are doing the same kind of work, you could have more of those people under a single manager.
It is easier for a manager of telemarketers, for example, to assume a number of people are doing the same kind of work. But if you have a wide variety of responsibilities and tasks in a particular group, then the manager needs to manage each type of individual differently. This variance means the number of people they can effectively manage goes down.
Standardization of responsibilities
Part of looking at types of work also requires understanding responsibilities. How standardized is that work? The processes in place? Once again, if there’s less variation or differences, then it may allow for more employees to be managed under a single person.
Even when work is highly standardized, you’ll still hit a limit of productivity at some point. By understanding what that limit is, you can keep the number of direct reports at a level that won’t negatively impact productivity.
Seek data on how many managers are necessary to provide the right amount of support and oversight. Knowing this will ensure that both the teams and managers are performing effectively.
Organizations often fail to take contingent workers into account because records of these workers aren’t kept alongside employee records. However, managing a contractor can be just as much work as managing an employee, if not more because of the additional responsibilities managers must take on: making sure contractors get paid, tracking their hours, renewing their contracts, etc.
When you have a team that works very closely together, their work connects them together even if their jobs are different. When groups like this become too large, they become harder to manage and it may be harder for the team members to work together effectively.
Keep in mind that all of these factors will vary based on the specifics of your organization. Business KPIs also vary within different departments, so it’s important to consider those metrics and prioritize ongoing monitoring.
Finding your ideal spans and layers make up
There are no magic numbers here. That said, by taking productivity and performance by job, department, and tier into account, you will find what works for your organization’s specific needs and goals.
Want to learn more about optimizing your spans and layers and how analytics can help you achieve tangible value with this initiative? Watch an on-demand replay of our webinar: Getting Real Value With People Analytics: Optimizing Spans and Layers.
Be the first to know!
Never miss a story! Get the Outsmart newsletter.