Are flat organisational structures driving employees away?

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Employers have to reassess the way they structure their workforce and approach career development or see staff turnover and low productivity at management level turn into a chronic malaise.

Lack of future career opportunity and a lack of recognition have emerged the top two reasons British workers leave their jobs, according to new research by best practice insight and technology company CEB.

Lack of career opportunity was cited by over half of UK respondents (50.2 percent) as a key reason for finding employment elsewhere. Money, which many think is the main driver, only ranked in at fifth (34.8 percent). Lack of future opportunity is a long-term issue for the UK and has consistently topped the list of employee attrition drivers for since the survey started in 2011.

Increasingly flat organisational structures may be at the root of this, according to CEB. Organisations are leaner than ever in the wake of the financial crisis and many have cut middle management layers in a bid to save costs. There are fewer positions for people to be promoted into and experienced, highly qualified staff remain on same level as colleagues with significantly less experience for longer.

With upper management positions cut and no signs of returning, there are fewer roles that enable employees to familiarise themselves with management responsibilities gradually. When someone is eventually promoted, the lack of step-by-step preparation and training leaves them ill-equipped to perform in a more senior role. This only exacerbates the UK productivity crisis as CEB research shows that half of all promotions today result in underperformance or failure for the first few months. Tellingly, 65 percent of people regret accepting management positions.

Employers have to reassess the way they structure their workforce and approach career development or see staff turnover and low productivity at management level turn into a chronic malaise.

Commenting on the findings, Brian Kropp, HR practice leader at CEB, said:

“The tools in the modern manager’s armoury are increasingly limited. The fact is that apart from money, there are few motivators to offer employees within a flat hierarchy.

“A flat corporate structure comes with many advantages but it also makes it that much harder for people to see a clear path for their progress up the corporate ladder. In days gone by, a regular employee could hope to become a supervisor, then assistant manager and manager but now such interim roles simply do not exist in many companies.

“In a bid to take the next step up, people feel compelled to look beyond their current employer. As a result, frustrations over recognition and career progression are now the key cause of workforce turnover.

“UK employers need to learn the lesson and reconsider the way they approach workforce structuring and career progression.”

The statistics are based on recent research by member-based advisory company CEB, highlighting the trends from the firm’s most recent Global Labour Market Survey of approximately 18,000 employees.

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  1. Some organisations might be flatter, but managerial positions have been increasing not falling. Between 2001 and 2010 the number of employees classified as managers, directors or senior officials increased by 20 per cent. There is an inconvenient break in the statistical series because of a definitional change in 2011. The trend since 2011 has been erratic, but by April-June 2015 the total number employed was 6 per cent higher than in April-June 2011. I suspect however that what has happened has been the replacement of the general middle manager with more specialist managerial posts in areas such as IT, HR, design and marketing, and finance as both businesses and the global environment they operate within become more complex.

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