In the wake of the news that the UK has officially entered a double dip recession, a report released by the Chartered Management Institute (CMI) reveals the concerns held by the UK’s managers and leaders about the current economic situation. CMI’s bi-annual Economic Outlook report does, however, also offer greater glimmers of hope than in recent times, outlining senior executives’ views on the state of the economy in 12 months and beyond.
Questioning over 700 respondents about a variety of economic performance indicators, including GDP, business insolvencies and levels of employment, key highlights from the report include:
- Greater optimism around growth: Although the majority of managers still feel growth will stay the same or decrease in the next 12 months, the number of managers expecting growth to accelerate has more than doubled from 8 per cent six months ago, to 17 per cent now
- Greater belief in job and business security: The number of managers feeling insecure in their jobs has fallen from 48 per cent six months ago to 43 per cent now, and the number who believe that business insolvencies will increase has fallen from 76 per cent to 71 per cent
- Continuation of a tough climate: 83 per cent of managers report that the state of the economy is having a negative impact on their organisation (this number has held steadily above 80 per cent since March 2009). Some 57 per cent of managers report pay freezes in the last six months, with 50 per cent attempting to reduce business overheads and 49 per cent seeing a recruitment freeze in their organisation. Nearly two thirds of managers (64 per cent) say that staff morale has got worse in the last six months
- Public sector faring the worst: Managers in the public sector feel most affected by the current economic conditions, are the least optimistic about the future, are the most insecure about their jobs, and are seeing the lowest morale.
In a climate where 35 per cent of managers expect to see cuts in training and development, and 32 percent are expecting cuts in management and leadership development – further endangering organisational growth – 82 per cent of managers would like to see the Government offer tax breaks to employers for investing in skills development. In a further endorsement of the importance of the skills agenda, 81 per cent support the expansion of funding for Apprenticeships, with 67 per cent calling for greater employer influence over public investment in skills.
Responding to the report, Christopher Kinsella, Acting Chief Executive of the Chartered Management Institute said: “Although it is good to see improvement in the longer term outlook amongst UK managers particularly in the private sector, as last week’s GDP figures show, we are still experiencing tough times. With morale continuing to be low and managers having to deal with difficult issues such as pay freezes and job insecurity, the journey back to economic prosperity is likely to feel like a long slog for many people.
“It is particularly worrying to see the number of people who continue to expect to see cuts in budget for training, and management and leadership development. With recent CMI/Penna research showing that effective management development can improve organisational performance by as much as 23 per cent, this type of short-termism risks damaging our ability as a nation to grow once more. Both Government and employers have a role to play in addressing this issue, and we call on both to work now to ensure management skills shortages do not hamper our chances of recovery.”
To view the full “Economic Outlook Report” and its recommendations, click on the link.