How Many Direct Reports Should a Manager Have? Striking the Right Balance for Effective Leadership

One of the ongoing debates in corporate America is how many direct reports a manager should have. It seems like a simple question, but finding the sweet spot can be tricky. Too many, and you risk a burned-out leader and disengaged employees. Too few, and you might be wasting resources or overloading the organization with too many layers of management. So, how can a company strike the right balance? And while we're at it, should we even be thinking about layers of managers, or is a flat organization the way to go?

When it comes to the number of direct reports a manager can handle effectively, the magic number tends to hover between 5 and 10. But this is far from a hard rule. A lot depends on the type of work being done, the experience of the team, and the style of leadership. In more complex, high-stakes environments—think software development or finance—a manager might only be able to effectively handle five or six people. The work demands attention to detail, coaching, and support. However, in teams where the tasks are more routine or where employees are highly self-sufficient, a manager might comfortably lead 10 or more.

But let’s not forget, it’s not just about numbers. The quality of the manager’s time and focus on each employee matters a lot. A smaller number of direct reports allows for more personalized attention, deeper relationships, and stronger guidance. This can be a big deal in fast-moving, innovative companies where creativity and problem-solving are key. On the flip side, a manager with a larger team may have to adopt a more hands-off approach, which works better when the team is highly skilled and requires less day-to-day support.

So, does that mean the fewer direct reports, the better? Not necessarily. That’s where the idea of a flat organization comes into play. Instead of stacking the company with layers upon layers of middle management, many companies—especially startups and tech firms—have embraced flatter structures. A flat organization reduces bureaucracy, encourages faster decision-making, and creates a culture where employees feel empowered and closer to the action. It can also foster innovation, since employees have more direct access to leadership and are more likely to feel like their voices matter.

However, there are some trade-offs. While a flat organization sounds great in theory, it can lead to its own set of challenges, especially as a company grows. Without clear managers, employees might lack direction or clarity about who to turn to for guidance. In some cases, leaders might become overwhelmed by the sheer number of people who need their attention, leading to bottlenecks and slower decision-making.

This brings us to the role of the CEO in designing the organizational structure. A good CEO will recognize the need to find a balance between keeping things flat enough to remain agile and connected, while still creating enough managerial support to avoid chaos. A flat structure can make sense in smaller companies or departments where innovation and fast communication are paramount. But as the company scales, having too few managers can leave leaders stretched too thin.

In larger organizations, having more managers can actually help improve the flow of information, enhance employee support, and create specialized areas of focus within teams. For example, breaking down responsibilities among several managers allows each leader to focus on different elements of the business, ensuring that no one person is overwhelmed. It also opens up the opportunity for middle management to take on development roles, providing a path for future leaders within the company.

Ultimately, the key is balance. A CEO needs to weigh the benefits of a flat organization—speed, empowerment, innovation—against the benefits of adding more managers—support, accountability, and structure. Neither approach is one-size-fits-all. For a startup or a small tech firm, a flatter organization might encourage the agility and collaboration necessary to drive fast growth. For a larger, more established company, a more layered structure with clear reporting lines and a manageable span of control for each manager could be the better option.

Finding the right balance is about understanding what your company needs at each stage of its journey. Too flat, and your leaders may be overwhelmed; too layered, and your company might slow down under the weight of bureaucracy. The most effective organizations often mix both strategies, remaining flat where it counts but adding management support where it's needed to foster leadership and employee success.

In the end, there’s no magic number for how many direct reports a manager should have. The best leaders are those who understand their teams’ needs and adjust accordingly, whether that’s by fostering more autonomy or providing extra support. And the best companies are those that don’t get stuck in one model, but rather embrace flexibility to grow, evolve, and succeed.