Reducing middle management may sound like a great idea for shrinking payrolls and streamlining operations, but the initial gains could prove transitory, experts told The Food Institute.
Research from Gartner indicates companies appear to be trimming middle management in response to advances in artificial intelligence and other technological innovations.
“Many companies are still trying to find a balance in their workload,” Milos Eric, co-founder and general manager of Oysterlink, told FI. “Right now, every company is responding to AI, automation, and economic uncertainty, so these changes feel drastic. However, we hope that it normalizes in the future as businesses settle down into a new normal.”
Gartner said it expects many organizations will rethink their structure this year to respond more quickly to technological changes. At the same time, employees are becoming more comfortable working with bots and believe feedback from them is more unbiased.
Gartner found that between 2017 and 2023, the average number of employees per manager increased from five to 15.
Labor attorney Eric Kingsley told FI he thinks the benefits of this strategy will be fleeting.
“Leaner management structures can save businesses money and improve decision making speed,” Kingsley said. However, he added a caveat:
“Having supervisors managing three times the number of employees often leads to burnout, weaker employee engagement and higher employee turnover.”
Businesses may find a temporary gain in efficiency, he added, but as supervisors have limited bandwidth to manage, support and advocate for individual employees, employees will have lower morale and productivity, which could be counterproductive in the long run.
The Wall Street Journal noted Google has cut 35% of its small-team managers, Amazon has told investors it plans to increase the employee-to-manager ratio, and Intel cut half its management layers. The reductions go beyond the tech industry with the likes of Estee Lauder, Citi and United Parcel Service also reporting major cuts.
Rohit Agarwal, co-founder of Zenius, said he thinks reducing middle management at smaller companies can work well, allowing employees to collaborate directly and get things done, but it may not be a good idea at bigger firms.
“It creates bottlenecks in the long run. Cutting down on this management can lead to confusion among employees when they don’t have an immediate point of contact in case of any questions or issues. The few managers left will also inevitably have to deal with a sudden increase in their workload and direct reports. So, while trying to reduce bloat, companies should not risk disrupting already established workflows,” Agarwal said.
The result of the reductions, Silicon Valley human resources executive Beth Steinberg told the Journal, is that managers no longer have time to guide and develop employees.
“They cannot spend time with their employees, they cannot help develop their employees. Really the only thing they can do is push the work forward,” she said.
“I can’t be a manager of this many people and also still be the go-to person for every single need,” said Stephen Condor, 30, a customer-service manager in Maryland, who has 36 people reporting to him now, up from the 16 just four years ago. He said his employees have been told to query each other or go to his assistant manager before approaching him.
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