The Great Flattening is a quiet evolution as middle managers decline

A trend known as the “Great Flattening” is reshaping corporate structures, as small and mid-sized businesses (SMBs) follow Big Tech in reducing layers of middle management. This is not the result of mass layoffs, but a “quiet evolution” where companies, facing significant cost pressures from rising labor costs, are choosing not to replace managers who retire or move to new roles.

Key Findings and Arguments

Data from HR solutions provider Gusto reveals that from 2022 to 2024, the number of individual contributors per manager at SMBs has doubled, from roughly three to six. While this move can offer short-term savings and agility, the article warns of significant long-term risks.

• Loss of Essential Functions: Middle managers are crucial for translating high-level strategy into actionable steps for their teams. Their decline risks a loss of mentorship, employee development, and day-to-day leadership, which are vital for long-term stability.
• Impact on Productivity: Research indicates that highly productive sectors and top-performing businesses tend to have more managers with smaller teams. This suggests first-line managers play a critical role in scaling expertise and boosting overall team productivity.
• Managers Are Also Leaving: The trend is compounded by managers voluntarily leaving their roles at a higher rate than in previous years. This may signal their confidence in finding more meaningful work elsewhere, either in other leadership positions or by returning to high-performing individual contributor roles.

Conclusion and Takeaways

The Great Flattening is a cost-saving measure with serious trade-offs. Organizations that cut middle management too deeply may sacrifice long-term growth, team development, and productivity for short-term financial agility. The article advises business leaders to be intentional about this trend, carefully considering what they lose when a manager’s role is eliminated, as strong teams ultimately rely on great managers for guidance and growth.

Mentoring question

Considering the trade-offs mentioned between short-term cost savings and long-term team development, how has the manager-to-employee ratio at your organization evolved, and what impact have you observed on mentorship and productivity?

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