The IT sector has the leanest management structures in the UK, according to new research from specialist recruiter Randstad Technologies.

A survey of 2,000 UK staff revealed that the average IT firm contains just 3.5 layers of management, compared to an average of 4.4 across UK companies.

As a result, Randstad Technologies says IT workers are being forced to switch companies to climb the career ladder, as the number of internal incremental promotion opportunities is small compared to the wider UK average.

Mike Beresford, MD of Randstad Technologies, said: “Tech employers have been streamlining their business models since the recession, and one of the key ways of doing this has been to reduce layers of management and increase the spans of control of each strata. But creating leaner workforces has had a knock-on effect on internal promotion opportunities. As the tiers of middle management are slowly squeezed, the opportunities to climb the career ladder within an organisation are contracting. Employees are being forced to move out of their company to progress their career, or face professional stagnation. At the same time, employers face losing ambitious high-flyers to their competition – and could find them hard to replace as the universal skills shortage continues to bite.”

Fewer opportunities for progression in IT & Telecoms

The research analysed a diverse range of sectors – from accountancy, social work, and IT to engineering, nursing and property – to find out the average number of layers of management in each of the main UK industries.

It found that the leanest management structures were in the IT & Telecoms (3.5), Education (3.5), and Nursing (3.5) sectors – each having significantly fewer layers than the UK average (4.4).

Layers of Management – Industry Breakdown
Education 3.5
IT & Telecoms 3.5
Nursing 3.5
UK Average 4.4
Accountancy 4.7
Investment Banking 4.7
Property/Construction 5.0
Retail 5.0
Engineering 5.0
Social Work 5.7

Nine out of ten IT roles filled with external talent

The IT sector has some of the lowest rates of filling vacancies from within. The research found that 85% of IT roles were filled with external talent, compared to an average of just 42% across all UK industries.

Mike Beresford said: “Skilled tech workers are a highly sought after breed, but most new roles are filled with talent poached from other companies. To climb the career chain and capitalise on demand, it therefore makes most sense for tech workers to look to move outside their company. Cyber security specialists and project managers are particularly in demand at the moment.”

Layers of management falling

A quarter of companies reduced their layers of management in the post-recession years, according to Randstad Technologies.

The survey revealed that one quarter (24%) of employees say that there are fewer layers of management at their company than five years ago – whilst just 1 in 6 (17%) say that more layers of management have been added.

As a result, Randstad Technologies says UK workers are being forced to switch companies to climb the career ladder, as the number of internal incremental promotion opportunities is shrinking.

Mike Beresford said: “The trend for condensing companies is catching on across Tech companies. Squeezing layers of staff together creates a more productive, well-oiled company, able to implement improvements at a faster pace – but there is less room for progression between positions. There are fewer cogs in the machine, but each cog is locked more firmly into place.”

In 2005, the Boston Consulting Group coined the phrase ‘delayering’ to describe the flattening of organisations’ management structures. But removing tiers of management has been a key tactic for management consultancy firms including the likes of Booz Allen Hamilton and McKinsey since the eighties.

The logic is that compressing and amalgamating layers together allows decisions made at the top of the career chain to filter through to the workers at the bottom much more quickly, helping companies to be more efficient and save money. Increasing the span of control of managers also encourages leadership through example, allowing workers to operate autonomously and discouraging the temptation to micro-manage.