UK failing to invest in its people

2004

Investment in staff development in the UK is lagging other European countries while HR representation in Britain’s boardrooms has fallen to the lowest level in Europe.

Research carried out by Birkbeck College for the Chartered Management Institute (CMI) reveals that the low priority placed on developing human capital by UK companies has left it falling behind in developing managers compared to its European counterparts.

The study, which took two years to complete, found that UK organisations spend less than their European counterparts on training and development, and are also the least likely to offer sufficient career planning to employees.

Although nearly three-quarters (74 per cent) of UK organisations claim to have a dedicated training budget, the average investment per capita is only €1,625 – representing less than half the amount spent by Germany, the biggest investor in management. Of the seven countries studied, only Romania spends less than the UK.

Moreover, fewer than half (47 per cent) of UK organisations claimed to have an HR representative in the Boardroom, compared to two-thirds (69 per cent) in France and three-quarters (74 per cent) in Norway.

The European-wide average is 62 per cent, the researchers found. Mary Chapman, chief executive of the Chartered Management Institute, said: “UK organisations need to do more to recognise the value of management development, through better evaluation of its results.

”Unless business priorities are linked to training policies and practices for current – and future – leaders, there is a real danger that other European countries will leave the UK standing still.”

The report also highlights that UK HR professionals receive little help from line managers in pushing the competitive benefits of good HR practice. Managers in the UK were the least likely in Europe to view HR management as something that offers a competitive advantage and as a result, management development in the UK receives a low priority.

Highlighting this shortfall, the research found that more than half of all European companies (56 per cent) claim to use fast-track development for selected managers. This approach is particularly favoured in France (77 per cent), Norway (71 per cent) and Germany (67 per cent). But the UK is comparatively weaker at identifying and ‘fast-tracking’ future leaders, adopting this approach in only 57 per cent of cases.

The UK also scores badly when it comes to evaluating management development in a systematic way. Although only four out of ten HR managers across Europe say that they do this, more than a quarter (27 per cent) of UK firms appear to carry out no evaluation at all

"Evidence showing positive links between effective management development and business performance has existed for some time," said Mary Chapman. "Yet this research demonstrates an alarming lack of acceptance and action, particularly in the UK.

"So, unless UK organisations are content to lag behind Europe, there are lessons that need to be learnt.

"For management development to be effective it needs to be fully integrated into the business strategy; it needs to be thoughtful and take a long-term view. And most importantly, managers at all levels need to believe that their development is being taken seriously."