Report: Close UK management gap to close productivity gap

The UK will need to train hundreds of thousands high quality managers across private industry and in public services over the coming decades if it is to overcome its competitive disadvantage with other leading economies, according to a new analysis of the labour market carried out by the Chartered Management Institute.

The report, Management and the UK 2030, reveals that the UK continues to significantly under-invest in management training compared to countries including the USA, Germany and South Korea.

According to the World Management Survey’s ranking of how well private industry and government performs in quality management skills, the UK currently sits in sixth place.

The CMI analysis found that employers in the US, which ranks first in the world for management performance, are 10% more likely than those in the UK to require candidates applying for management positions to already have proven management skills. If the UK upskilled its managerial ranks to the same level as the US over the course of a generation, the workforce would need to add an additional 840,000 trained managers.

The CMI analysis also finds that had the UK invested in recent decades to the same level of Germany, which currently sits third in the world rankings, UK GDP would have been c£127 billion higher.

Should the UK start to meaningfully close the gap in management training with Germany over the next 10 years, it stands to see cumulative gains in improved productivity valued at c£76 billion, which equates to roughly one third of the total NHS England annual budget in 2023, or almost double the UK’s annual defence budget.

A dearth of management skills in the UK’s health service is singled out in the report, which examined detailed data on job adverts, and found that just over one in five (23%) health professional adverts specify the need for management skills - far below other sectors such as finance (36%).

The report also found that where management skills were required in a health sector job, each role had to be advertised across an average of five different recruitment platforms, compared with private sector firms such as Morrisons and Whitbread, where adverts typically only need to be placed across two platforms in order to attract the desired candidates.

While each of the countries examined in comparison to the UK, including the USA, Germany, Sweden, South Korea and Singapore, had different models and approaches, the report finds that a relentless focus on opening up their economy to increased international trade, a culture focused on the longer term, and effective institutions - and industrial strategies - supporting businesses and citizens in every region of the country were the common ingredients to success.

Anthony Painter, Director of Policy at CMI, said:

There are examples out there of what is working around the world and the common thread is a relentless focus on management that helps deliver stronger productivity. If implemented in earnest, investment in modern high level management capabilities will also deliver better public services and an inclusive growth economy.

Government needs to lead by example and responsibly invest in the people who manage our vital public services - and demand the same of companies that want to do business with taxpayer-funded organisations.

There are thousands of UK businesses primed to reap the benefits of better management if they can see incentives to investing in their employees. This report identifies the business cohort with the most to gain and it is up to Government to deliver a clear industrial and regional growth strategy that rewards those firms that embrace better management, those that play their part in delivering growth.