How much are Accidental Managers Costing Your Organisation?

Plummeting engagement rates in the workforce have put pressure on senior leaders to investigate their employees’ experience and job satisfaction. The trickle-down effect is that managers, who are already overstretched, are tasked with tackling this problem. Unfortunately, a lot of managers are ill-equipped to manage people, partly because they became managers unintentionally. Individuals in this circumstance are “accidental managers”. An accidental manager is an individual who gets promoted because of their technical expertise, rather than a desire to become a people manager. It’s not unusual for accidental managers to have little, or no, people management skills and experience.

With mass layoff sprees taking place as companies cut costs, we’ll likely see an increase of accidental managers. And while it may seem like an incidental and unimportant issue, untrained people managers have a significant impact on both profits and staff retention.

The material impact of accidental managers

According to the Chartered Management Institute (CMI), there are approximately 2.4 million accidental managers in the UK. The research shows that more than two-thirds (68 per cent) of UK managers consider themselves to be accidental managers. Considering the well-established link between management, employee retention and productivity, these figures are particularly alarming.

There are approximately
2.4 million
accidental managers
in the UK

Mental health data compiled by Lumien suggests that half (50 per cent) of employees leave their job due to bad management. In addition, untrained managers can cause a 16 per cent reduction in productivity within an organisation. Monetarily, this translates as a financial impact of over £5,000 per employee, based on the average UK salary of £31,461. Conversely, improving the management effectiveness by just 0.1 per cent can lead to a 10 per cent productivity increase.

Low productivity is a persistent issue in the UK which has stifled our economy. If we continue our current, sluggish rate of productivity improvement, UK employees will be 32 per cent less productive than their counterparts in the US and Germany by 2025.

Closing that productivity gap would add £254 billion to the UK economy every year, unlocking opportunities for higher wages and tax revenues to fund public services. Ultimately, higher workforce productivity helps to build a more prosperous society, and it begins with effective management.

Accidental managers are missing key leadership skills

71% of UK employers admit that they don’t train their first-time managers. So, it’s unsurprising that studies show managers exhibiting poor behaviours, such as inadequate organisation skills in a team (26 per cent), poor communication (12 per cent) and conflict avoidance (7 per cent).

71% of UK employers admit that they don’t train their first-time managers

Based on guidance from the American Management Association, managers need four fundamental skills, which are summarised as the “4 C’s”:

  • Communication
  • Critical thinking
  • Collaboration
  • Creativity and Innovation

The reality is that when managers possess qualities that inspire employee productivity, the impact on company profits can be dramatic. This is just one of the reasons why it’s important for organisations to prioritise effective training.

The UK Government’s Department for Business, Energy and Industrial Strategy (BEIS)*, supported by Innovate UK and Innovation Growth Lab (IGL) by Nesta, recently conducted research to explore technologies and/or management practices that could help to unlock this untapped productivity potential for the UK economy.

Notion’s enquiry-led management programme, STAR® Manager, was one of the six selected research studies from 189 consortia proposals and the only one to explore the impact of management practices on UK productivity. The research concluded that managers with access to STAR® Manager improved their management capability in all 9 areas measured including their listening skills, communication skills, and ability to handle challenging conversations and increased the time they spent using coaching-related behaviours by 70%. The study also unlocked over £19m of captured value for the participating organisations which was equivalent to 74 times Return on Investment per manager.

One key takeaway here is that managers have a keen appetite to improve their management skills. Following the short 6-month academic study window, 63 per cent voluntarily continued with the programme. Companies need to get behind their managers and support their development to reap the rewards.

Final thoughts

The benefits of building a skilled management team are endless, both for individual companies and the UK economy at large. To see notable shifts in productivity, retention rates, employee satisfaction, and other key indicators, we have to properly equip our first line of defence, which is our managers.

*In February 2023 BEIS became known as the Department for Business and Trade

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