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May


A heap big pile of chiefs

Sun, 22nd May 2005
2L AST WEEK the GMB drew attention to the intriguing statistic that one in seven of all UK employees is a manager or senior official. The latest Labour Force Survey shows that, at 4 million, the UK's managerial workforce is now the largest occupational group in Britain- 15 per cent of the workforce, compared with 12 per cent for the professions, 14 per cent for associate professional and technical, 13 per cent for administration and secretarial and 12 per cent for skilled trades.

What's more, the management cadre is growing. In 1981, the GMB notes, there were 2.7 million UK managers, 12 per cent of the then workforce. By contrast, at that stage skilled tradesmen, at 4 million, still made up 18 per cent of British workers.

Interestingly, managerial intensity, as we might call it, varies greatly around the country. In the north, Scotland and Wales it is lower than average, while in the south it is considerably higher. In the City of London, more than one in four employees is a manager.

So what does it all mean? The GMB decided to look at the figures when workers in some of its lowest-paid sections, including hospital cleaners and local government workers, complained that they were responding to so many managers they were unable to get anything done (echoing Peter Drucker's wistful remark that so much of management seems to be about preventing people from doing their job).

But this doesn't explain why the management inflation is occurring. After all, as Ewart Keep, deputy director of the Economic and Social Research Council's Research Centre for Skills, Knowledge and Organisational Performance, points out, the conventional narrative is one of flattening organisations and disappearing hierarchies. That should mean fewer managers. Likewise, large-scale outsourcing of routine jobs might also be expected to cut management numbers.

TUC senior policy officer Richard Exell notes that there are two ways of getting performance out of workers, roughly corresponding to the 'high road' and the 'low road'. In the German model, or 'high road', highly skilled workers are trusted with wide autonomy over their jobs, supported by an institutional framework emphasising participation, training and high pay.

At the opposite extreme, the US model is low on trust and training, instead throwing armies of new graduates at the workplace to make decisions and ensure others follow them. 'Every country falls somewhere on that spectrum, and over the past 20 years we've been moving towards the US model,' Exell says.

At the same time, these models are self-reinforcing: a low-trust, command-and-control regime tends to beget behaviour that seems to justify still tighter controls and still more managers - a manifestation of Parkinson's Law showing how managers produce work for other managers. The reverse is also true. Although the classifications do not correspond exactly, 'high-road' economies such as Germany and the Nordic countries do appear to have lower chiefs-to-indians ratios than the UK, says Keep.

Another factor might be the growing complexity of work. Regulation, or the targets culture, is one aspect of that, particularly in the public sector, which is also affected by the drive to marketisation - for example, all universities now have marketing and PR departments (and managers).

But similar tendencies are also at work in the 'management factories' of private sector companies. Headlong technological advance means whole new departments to manage (websites, for example) and burgeoning information requires more managers to collect, analyse and send it on to others. 'Performance analysts' are increasingly, and depressingly, in demand in many companies to decide what the data avidly collected by computers actually mean.

Counterintuitively, outsourcing could actually multiply management posts: instead of one organisation there are now two, with managers on both sides to manage the relationship as well as the function.

A further, very British, element in the mix is class. In the UK, management is as much about position and status as function. Keep notes that many managers say they don't manage people any more - 'retail managers' or 'train managers', for example - depriving the word of most of its meaning. He speculates that as the working population has become more middle class it has shed its previous work titles and adopted a management nomenclature more in keeping with its aspirations. In other words, the change is one of word rather than deed.

However, LSE's Carsten Sorensen cautions against simplistic interpretations, especially the assumption that more management is necessarily a sign of inefficiency. 'Ought there to be fewer managers? I'm not sure,' he says.

For instance, managing a solicitors' or architects' office may be more management-intensive than running a factory. Given that the City is one of the UK's strengths, the high proportion of management employees may be appropriate. And, however it comes out in international comparisons, in absolute terms the UK is a more successful economy than it was 20 years ago, when managers were apparently fewer on the ground.

On the other hand, by the same token, the combined efforts of all the UK's management workforce, and its business graduates have not been able to close the productivity gap with the US, France and Germany. So managers may still have a case to prove. Could the UK's productivity problem be that there are too few people actually doing anything productive, and too many managers adding no value checking up on what they do?

One is reminded of the story of a Japan v America boat race. Japan won by a mile. After lengthy analysis, the Americans decided they lost because while the Japanese had eight people rowing and one steering, in the American boat the proportions were reversed.

The following year the Americans were confident their reorganised team would carry the day. It consisted of a boat manager, two steering managers, three area steering managers, an IT manager to collect performance data, an HR manager, and a rower incentivised to meet the targets. This time the US team lost by two miles. It sacked the oarsman for poor performance and gave the managers a bonus for identifying the problem.

The Observer, 22 May 2005


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