Human Resource Executive's News & Analysis Update, January 23, 2007, Tuesday

Human Resource Executive's News & Analysis Update for January 23, 2007

Losing the Middle Manager

Unhappiness with compensation and prospects for advancement has left more middle managers dissatisfied with their organizations, according to a new study. More than one-quarter of them are looking for new jobs.

By Scott Flander

Middle managers might not get much glory, but companies that forget their importance do so at their own risk.

That's the message of a new Accenture survey, which found that middle managers in the United States are growing increasingly dissatisfied with their organizations, and that more than one-quarter of them are looking for new jobs.

Other experts say they are seeing the same discontent, and warn that unless organizations take it seriously, they'll end up losing some of their best people.

"Turnover is inevitable, but they're going to be turning over the wrong part of the organization," says Ed Newman, whose Phoenixville, Pa.-based company, The Newman Group, specializes in talent management and acquisition. "The risk is that you end up replacing really good talent with mediocre talent."

The Accenture survey found that 52 percent of middle managers in the United States were extremely or very satisfied with their organizations, down from 67 percent in 2004.

Among the biggest complaints: compensation and prospects for advancement. Thirty-seven percent of middle managers said their organizations handled compensation in a good or best possible way, a drop from 51 percent in 2004. And about one-third (32 percent) gave high marks in the area of prospects for advancement, down from 50 percent.

"Middle management is the overlooked group in a lot of organizations, and they're not happy ¿ they sense it, they feel it," says Ed Jensen, who runs the Accenture division that conducted the survey. "The overall trend is not good."

Although the findings were similar to those in Accenture's 2005 survey, Jensen says the overall drop from 2004 closely reflects what is happening in the workplace.

The latest results came as no surprise to academics who study middle managers, and to recruiters who help find jobs for them.

"The pressures on middle managers have been growing as companies have restructured and downsized," says Fred Foulkes, a professor of management policy at Boston University, where he is director of the Human Resource Policy Institute.

As companies eliminate layers of management, there are fewer opportunities for promotion, and it takes longer to move up the ladder, he says. That means more middle managers in an organization are competing for fewer jobs.

"The reality for most people is that the way to get ahead is to get promoted, and the chances of doing it in your own firm aren't so great," says Foulkes. That would explain, he says, why the survey found that 26 percent of middle managers are looking for new jobs, up from 21 percent in 2004.

Although Foulkes agreed with Accenture's overall findings, he questioned the methodology of the survey, in which 200 middle managers in the United States were interviewed online in September. "People who are disgruntled have time to do these surveys," he said, and added, "200 is a small sample." A total of more than 1,400 middle managers were surveyed in nine countries for the study.

Both Foulkes and Newman say the role of middle managers has been changing.

"I don't think the middle management of eight to 10 years ago exists anymore," says Newman. Because of restructuring and budget cuts, "the middle manager is now the worker bee."

Middle managers probably didn't voice as much dissatisfaction in 2004 because at the time, "they were just glad they had jobs," said Newman. "Now that we've had a couple of years of growth, people are thinking, maybe the grass is greener ... . "

And their discontent is bubbling to the surface.

Newman points to the 29 percent of middle managers who told Accenture that they felt they were doing all the work, but were not getting credit for it. "Traditionally," he says, "the workers would be complaining that the middle managers took all the credit."

The middle mangers surveyed gave high marks to their companies for working conditions and benefits -- 55 percent said their organizations handled both of those issues well. But 41 percent said their greatest frustration was in trying to balance work and personal time.

Newman believes this is a problem that will only worsen. "The baby-boomer mentality is, 'I'm going to work 'til I drop,' " he says. "But to the generation coming up, striking a work/life balance is more important to them."

Eileen Finn, whose New York-based executive-search firm, Eileen Finn and Associates, places human resource professionals, says that as companies cut back, "they're left with better employees who want to be rewarded, validated and acknowledged."

Although many organizations are trying to retain good managers, some sabotage their own efforts by outsourcing specialty functions, she says. This saves money but diminishes the roles of those who remain, creating further discontent.

Organizations must work harder to keep middle managers happy, the experts say. If there are few opportunities for promotion, middle managers should be encouraged to make lateral moves so they can grow and develop. They should be put on task forces to give them new challenges. And organizations need a system of recognition and rewards.

Those initiatives may be straight out of Management 101, but many companies don't know how to make them happen, says Finn. "It's very difficult to change the way people operate."

Greg Gostanian, managing partner of ClearRock, an executive coaching and career transition firm in Boston, notes that in the 1970s and 1980s, many companies did emphasize employee development. But those programs were "decimated" during the recession that followed. As a result, he says, many current top executives don't have that background, and so don't have the experience or expertise to make employee development a key element in their companies.

The experts say that as baby boomers retire in the coming years, the problem of middle-manager talent drain will become increasingly critical.

For Samuel Bacharach, a professor and director of the Institute for Workplace Studies at Cornell University in Ithaca, N.Y., the issue is whether companies are truly serious about retaining good employees, or whether they're simply willing to treat their workers -- including middle managers -- as commodities.

"There's a hidden message of the commitment of the organization," he says.

The latest Accenture survey also looked at middle managers in Australia and seven countries in Europe and Asia, and found that the unhappiness is worse overseas. In the United Kingdom, for example, only 27 percent of respondents were extremely or very satisfied with their organizations, compared with 52 percent in the United States. In France, the figure was 25 percent.

That means, says Accenture's Jensen, that multinational corporations need to address the manager discontent everywhere, not just in the United States.

Regardless of location, says Jensen, the risk of losing the most talented middle managers has far-reaching implications. "It's the future of senior leadership that's in middle management."



January 19, 2007

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