According to a new report from Lord Eatwell, published by the Chartered Management Institute (CMI) today, 82% of managers say the recession is still negatively impacting on their organisations and pay and recruitment freezes are also on the increase.
Although many feel they continue to be hampered by the recession, managers working with small to medium-sized enterprises (SMEs) seem to be faring better than their counterparts in larger organisations. According to the data, 47% of SME managers viewing the forthcoming spending review as a threat to their operations, but this rises to 60% of managers within organisations employing 250 staff or more. Interestingly, just 8% of SME managers say they feel very insecure in their roles, compared with 42% of managers working at larger companies.
Eight out of 10 managers in larger firms agree that morale is much worse now than it was six months ago, with managers from SMEs close behind on 58%. Levels of optimism for the next six months are also worse than ever, dropping by 13% within SMEs and 23% in large organisations.
The data also shows managers expect all forms of investment to be cut even further – something that has already taken its toll. More than half of all small and medium-sized organisations (55%) have kept pay freezes in place, rising to 71% for larger businesses. Some 69% of larger organisations have closed the door to new recruits while SMEs fare slightly better with 40% operating under a recruitment freeze.
The CMI is calling on the Government to take immediate action to increase the support on offer to UK managers by giving them greater control over how they choose to spend what little funding is available. Financial aid in the form of tax breaks for skills development and measures to improve bank lending to businesses, both of which are popular with the majority of UK managers, should also be high on the Government agenda.
Eatwell, chief economic adviser to CMI, said: "A persistent theme of this year’s report is the collapse of nearly all measures of economic health, particularly when it comes to optimism for the future and levels of morale. With the threat of immediate and major cuts on the horizon, widespread instability looks likely to remain a characteristic feature of the economic outlook for some months to come. Of course, it is unrealistic for employers to anticipate the flow of investment from Government to improve significantly in the short term. However, if Government policy on deficit reduction and public-sector reforms is to succeed, then highly skilled and capable managers will be needed. To enable investment in these skills, and to support business growth, the Government must do more to stimulate a reliable flow of bank lending. Bolstering confidence in management skills will always be an important part of securing finance and improving the quality of management will help the successful evaluation of lending proposals."
Ruth Spellman, chief executive of CMI, added: "Ultimately, the key to recovery is ensuring that managers feel confident and optimistic about the future. It’s painfully clear that this just isn’t the case at present. Of course, managers and leaders must take some responsibility for developing the skills needed for success, but they are crying out for more support. They are willing to accept that an increase in available finance is unlikely to be forthcoming, but still believe that the Government can do more to help them turn things around. The Government needs to answer their call by ensuring that what available credit there is, is used in the right way."
