Middle managers mean more to the bottom line than you might think

Although executives, in recent months, have championed flattening their org charts, research finds that middle managers are more important to the bottom line than some might expect. In fact, they’re a “business imperative,” according to a recent analysis from McKinsey & Company. 

“Organizations with top-performing managers yield multiple times the total shareholder returns (TSR) of those with average or below-average managers over a period of five years,” write the report’s authors. 

That might surprise some leaders who’ve opted to scale back hiring middle managers to promote efficiency and cost cutting. Meta announced in March that it would lay off an additional 10,000 employees following prior cuts in 2022. 

CEO Mark Zuckerberg said the cuts would “make our organization flatter by removing multiple layers of management” while increasing efficiency. But experts say employers should provide middle managers with more resources rather than pull back. Middle managers often serve as the backbone of companies, supporting employees in ways that upper-level management cannot. 

“CEOs and other C-suite leaders who are surprised by the magnitude of this effect could consider the decades of organizational research finding that managers are one of the biggest factors—if not the biggest—in employees’ experiences and satisfaction at work. Strong managers can truly revolutionize how employees show up to work, how they perform, and how the organization performs as a whole,” according to McKinsey. The authors point to strategies HR leaders should employ to strengthen middle management’s value to organizations: 

— Identify “the magic number of employees a manager can oversee to achieve optimal effectiveness and efficiency.” This number can vary for different organizations.

— Create and reward an identified set of behaviors you want managers to reflect in the organization. 

— Offer managers additional development opportunities and a sense of purpose within the organization. 

— Establish accountability measures that reinforce what an effective manager looks like within your company.

Amber Burton
amber.burton@fortune.com
@amberbburton

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