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Managers predict cuts to training and leadership development, but a growing number are confident in business growth, finds CMI

David Woods , 03 May 2012

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Following news that UK has entered a double dip recession, a report from the Chartered Management Institute (CMI) found the number of managers expecting growth to accelerate has more than doubled from 8% six months ago, to 17% now.

The news comes just days after reports that the UK's economy had retracted by 0.2% in the first three months of 2012.

Questioning over 700 respondents about a variety of economic performance indicators, including GDP, business insolvencies and levels of employment, the CMI found that although the majority of managers still feel growth will stay the same or decrease in the next 12 months, they have a greater believe in job and business security.

The number of managers feeling insecure in their jobs has fallen from 48% six months ago to 43% now, and the number who believe that business insolvencies will increase has fallen from 76% to 71%.

More than four fifths of managers report that the state of the economy is having a negative impact on their organisation (this number has held steadily above 80% since March 2009).

Some 57% of managers report pay freezes in the last six months, with 50 per cent attempting to reduce business overheads and 49% seeing a recruitment freeze in their organisation. Nearly two thirds of managers (64%) say that staff morale has got worse in the last six months .

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% of managers expect to see cuts in training and development, and 32% are expecting cuts in management and leadership development - further endangering organisational growth - 82% 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% support the expansion of funding for Apprenticeships, with 67% calling for greater employer influence over public investment in skills.

Christopher Kinsella, acting chief executive of the CMI, 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."

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