According to new research from Business Insider and Revelio Labs, America’s white collar workforce is flattening.

Is this a viable talent management strategy or short term thinking with long term costs and consequences?

FLAT PROS AND CONS

Organizational design theory suggests that flat hierarchies can result in faster decision-making, improved communication, increased employee autonomy, and greater engagement. However, flat organizations can also suffer from lack of leadership, poor quality control, confusion about responsibilities and mission, and increased employee workloads — especially dangerous if employees lack the necessary skills and competencies to function independently.

FLAT GIVEN TODAY’S WORLD

U.S. employers already claim that they can’t find skilled workers. Their recruiting teams have been tasked with endless / highly restrictive job searches — elusive Purple Rabbit Hunts.

Given America’s: ❶ under-investment in on-the-job training, ❷ subpar worker reskilling programs, ❸ lack of focus on long-term career development and ❹ struggles to find and keep skilled talent, organizational flattening may accelerate company workforce skills gaps and reduce employee productivity. Ultimately, that could erode profits.

Decentralized, self management without middle managers is akin to holacracy — and its hella hard. Holacracy can lead to lawsuits and ineffective staff. Without coaching from experienced middle managers and sufficient employee training curricula, a flat organization can fall flat on its face.

What’s worse? Flat organizations kill DEI and diversity. A 2023 Strategic Management Journal research study found that flat organizations deter women job applicants and result in women employee attrition. [link to the study in comments]

FLAT: A HISTORY OF FAILURE

History has shown that attempts at flat organizational structures often fail, with examples ranging from Zappos to Google and Theranos. As Spanish philosopher George Santayana said, those who do not learn from history are doomed to repeat it.

Every company has a structure; if you don’t explicitly define your organizational structure, you end up with an implicit one which heightens risk.

KEY TAKEAWAY

As we approach 2025, it’s time for companies to:

➤ Evaluate their existing employer-led training programs and talent acquisition strategies.
➤ Consider their current organizational map.
➤ Analyze the impact “rightsizing” or “flattening” has had on productivity and profitability.
➤ Then set a clear course for the future.

The clock is ticking.