Lack of management skills starts to bite

Britain has long had a reputation for poor management skills, whether because of lack of training or individual aspiration.

"It is a constant refrain that by and large UK managers do not perform as well as their counterparts in other leading economies," said David Pardey of the Institute of Leadership and Management.

Research by the Chartered Management Institute in 2004 found that British employers spent on average just €1,625 (£1,430) a year on developing each manager, against €4,438 in Germany, €3,387 in Denmark and €2,674 in France. Only a fifth of UK business leaders have any management qualification, the CMI says.

Now employers confront a dual problem: how to raise the quality of leadership while they face a potential shortage of skilled managers. The trend towards longer working lives may help, while slow economic growth could suppress some of the forecast demand. But employers need new strategies.

Large companies, with bigger resources, may find it easier than smaller ones.

"We aim to fill at least 70 per cent of positions internally, but if you are growing you can't always fill all management positions in that way," said Irene Cowden, human resources director at G4S, the security contractor. "If you have to look outside, finding the right people is always quite difficult."

G4S has stepped up investment in "talent pools" made up of the strongest candidates for promotion at different levels of the business. In the most senior pool, 25 people thought capable of competing for the top posts are brought together twice a year and given strategic tasks.

Mr Pardey said companies needed to "start early and think ahead. You can't leave it until the problem emerges and then start looking around for who's available". There could be an opportunity to improve the average quality because more younger workers were educated to degree level, he said.

Britain's problems include a tendency to promote people with technical skills but who lack people skills, and failing to give management training until people have been in a job for years. Mr Pardey said it would be better to train people in advance of promotion, in the way the army prepares corporals to be sergeants and lieutenants to be captains.

He speculated that faced by a shortage of management skills, some companies would try to make do with fewer managers. However, that could be risky unless there was an effort to raise the skills of those who remained.

"A lot of the things managers do are being spread more widely around organisations," said Jonathan Gosling, director of the centre for leadership studies at Exeter University. "Distinctions between the management cadre and everyone else are blurring."

Nigel Parslow, UK managing director of executive recruitment group Harvey Nash, said manufacturing was particularly vulnerable because it already faced a shortage of engineers. In financial services, demand has grown for managers in areas such as risk, compliance and wealth management.

Sarah Thwaites, deputy chief executive of the Financial Skills Partnership, the sector skills council, said efforts were being made to attract talented young people into the sector through work experience and apprenticeships.

Across the economy, however, there was a shortage of "people that are going to take something and run with it", said Kai Peters, chief executive of Ashridge Business School. "People are trained very well at the task-oriented, subject-specific aspects of business. What they are not good at is leaving all that behind and acting as a catalyst for others."

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