Imagine a tax that you’re unknowingly contributing to every day at your job – and the good news is, you can learn how to avoid it!
As Australians, we are no strangers to taxes. We pay them on our salaries, the products we purchase, any capital gains we realize, and various stamp duties depending on our locations throughout the country. However, there exists another type of tax that often flies under the radar in the workplace. This concept was brought to public attention by Brian Chesky, the CEO of Airbnb, when he discussed the challenges posed by an overwhelming number of meetings in professional settings.
Chesky proposed a strikingly simple yet revolutionary idea: "People create meetings," he observed, "so to minimize meetings, we should have fewer people involved."
He contends that each new addition to a team or business introduces a cost to productivity, leading to an increase in meetings, reviews, and administrative tasks, all of which can hinder effective execution. This phenomenon, which he calls a "communication tax," is what you incur with every new colleague added to your team.
While it may seem intuitive to assume that increasing staff numbers would enhance a team's efficiency by distributing the workload, this isn’t always the case. In fact, as more colleagues join, the communication tax rises, requiring everyone to invest additional time and effort to keep each member motivated and informed.
Interestingly, this burden generally does not fall on leaders like Chesky at the top; instead, it primarily affects middle management, who must navigate the flow of information both upward and downward to maintain alignment among team members.
Amazon's founder, Jeff Bezos, emphasizes that teams should ideally be small enough to share two pizzas – suggesting a size of around six to eight people, depending on how hungry they are.
The issue becomes even more pressing as team sizes expand. According to Gallup’s findings, the average number of individuals reporting to a manager increased from 10.9 in 2024 to 12.1 in 2025, marking a staggering 50 percent rise since they began tracking this data in 2013.
Stewart Butterworth, co-founder of Slack, estimates that communication within smaller teams consumes about 20 percent of an employee’s work time, while this figure more than doubles in larger teams. This leads us to a crucial question worth examining: What is the optimal team size for success in the workplace?
The answer, of course, hinges on what you aim to achieve. Bezos’ infamous "two pizza rule" suggests that teams should remain manageable while ensuring diverse skill sets and opinions are represented. Too few members risk limiting diversity, while excessive numbers can lead to inefficiencies such as prolonged meetings and duplicated efforts.
In 2020, Gallup conducted a comprehensive analysis involving over 200,000 teams to determine the ideal size for effective management. Surprisingly, their research indicated that the quantity of employees reporting to a manager was less significant than the level of engagement exhibited by that manager.
However, many employees may feel they have little control over the overall size of their teams. Yet, there are still ways to impact the effectiveness of group dynamics when assembling a team for a project.
If the goal of your team is simply to share information, larger groups can facilitate swift communication. Conversely, if the aim is to accomplish specific, measurable outcomes, selecting a team size that minimizes your communication tax could be the key differentiator between outstanding success and complete failure.
Tim Duggan, author of "Work Backwards: The Revolutionary Method to Work Smarter and Live Better," regularly shares insights through his newsletter at timduggan.substack.com.
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Tim Duggan has authored several books, including "Work Backwards," "Cult Status," and "Killer Thinking." He co-founded Junkee Media and writes a monthly newsletter called OUTLET.
