Rise of the Middle Manager?

One new report finds that CEOs' chief talent challenge is the recruitment and retention of high-potential middle managers, while another survey finds those same managers are missing out on personal-development opportunities within their own organizations. What's HR's role in keeping these middle managers from leaving?

Tuesday, June 12, 2012
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There used to be a time in America when the term "middle manager" was an aspirational position.

Then came the great flattening of organizations -- and the position became an endangered species in the jungle of business professionals.

But now, new reports are showing the middle manager is making a comeback in importance in the eyes of organizational leaders.

Indeed, in New York-based PricewaterhouseCoopers' 15th annual global CEO survey titled Delivering Results: Growth and Value in a Volatile World, 50 percent of the respondents identified "recruiting and retaining high-potential middle managers" as their chief talent challenge.

The survey -- of 1,258 CEOs based in 60 countries -- was designed to discover how businesses are preparing for growth in their priority markets. It also includes 38 in-depth CEO interviews that explore their confidence in their company's growth prospects and how they're building local capabilities and creating new stakeholder networks in new markets.

Talent is a major theme in the study.

"Even in a weak labor market," it states, "more than 40 percent of [160 U.S.-based] CEOs say their talent-related expenses rose more than they expected, a reflection of the acute skills mismatch problem they face: talent shortages amid high unemployment." 

The survey also finds that two-thirds of CEOs say it's more likely that talent will come from promotions within their companies over the next three years, which the report says reflects an increasing focus on internal talent management.

It also finds that CEOs are closely integrating business planning at the highest levels of the company with their HR leaders, with 79 percent saying the CHRO, or the functional equivalent, is a direct report of theirs.

Meanwhile, another study, by U.K.-based Ashridge Business School, finds that many middle managers in that country are missing out on personal-development opportunities within their organizations because of a lack of time and the impact of financial pressures.

The research, titled The Missing Middle: Exploring Learning Experiences of Middle Managers in the U.K., surveyed 569 employees, with 66 percent of the U.K.-based respondents identifying themselves as middle management and 34 percent identifying themselves as "first-line" management.

"Relationships between middle managers and their direct reports can make or break an employee's motivation, productivity, satisfaction and retention," the study states.

In the survey, 73 percent say they work in an environment that claims to support learning and development, but only 53 percent say they are actually given sufficient time for learning.

Perhaps more troubling is that 25 percent of respondents say professional development is seen as "a luxury" in their organization.

And, while 65 percent say they would like a mentor or career/life coach, only 24 percent say they actually have one.

Hamish Scott, the school's program director, says the findings reflect a key business issue.

"Middle managers are an important part of any organization," he says, "acting as a crucial filter between day-to-day operational demands and the board's strategy. Overlooking this critical function is short-sighted.

"We need to get the middle moving, inspired and fulfilled," he says. "This means investing in people development to equip them with the skills to do their job and keep ... business running smoothly. What organizations are missing is their need to invest in its whole workforce and not use middle management as a stepping-stone position."

Meanwhile, Steve Ziegler, co-founder of TriWorth, a Denver-based recruitment-process-outsourcing services firm that handles middle-management retained searches, says he's not surprised by all the attention on middle managers.

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"Over the past four years, the middle-management ranks have been decimated," he says. "If a middle- management professional was not laid off, then they most definitely have been asked to take on more responsibility, have been expected to perform at a higher level and have little to no time for training. 

"Therefore," he says, "many individuals in middle management feel over-worked and most likely have begun to look around for new opportunities now that the economy is turning around. Many companies don't want to lose the middle management staff that has hung on or the ones they have developed over the past few years, as they are ones who are battle-tested and critical to the company's success moving forward."

Tom Davenport, senior consultant at New York-based Towers Watson, says, "The surprising thing is that it has taken this long for CEOs to realize how critical middle managers are -- and always have been -- to competitive success."

Some companies, he says, are finally seeing the flaws in the strategy of flattening organizations, usually through the removal of middle managers.

"This approach may produce short-term savings but [it] also has a damaging longer-term effect on revenue and profitability," Davenport says. "Our economic analysis shows that gains in productivity and product innovation that come from preserving many middle-manager positions swamp the cost savings from downsizing."

He says HR can do some concrete things to keep middle managers happily within the company, the first being to change the criteria used to identify and promote managers.

"Too often," he says, "technical skill is the de facto major consideration in the promotion decision. The result is the wrong person in the wrong job."

Second, he says, HR should take a close look at the content of the manager job and, in many cases, redesign it.

"A majority of the managers we have surveyed and interviewed tell us that their individual production goals make it difficult, if not impossible, for them to carry out the leadership and people-development aspects of their jobs," he says.

"HR's first job is to redefine the role," he says, "so that managers have the time and the ability to make the most of the learning opportunities organizations should provide."

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